Good morning, and happy new week, everyone.
I did not expect much market activity over the weekend. Sellers tried to push price below the 6/09 high for three consecutive days, but buyers continued to defend the level.
Yesterday, the market’s low formed exactly at the 6/09 high. Buyers then stepped in and drove price higher, but they left no excess at the low, making the buying response weak. Price moved upward and closed near the value area high.
Overall confidence in the previous day’s profile was high. However, the POC did not migrate with price as the market moved lower, indicating that the POC area still needs to be revisited.
Today’s Profile
The market opened near the previous day’s value area high and one timeframed higher during the first few sessions, taking out the 18/10 and 16/10 poor highs.
This move appears to be a continuation of the previous night’s late short covering. It could become a trap unless new money buying enters the market.
Profile Structure
The developing profile is structurally weak:
The high is one tick above the 25/09 low, creating a weak high.
The low is a poor low.
The POC is prominent and remains an important reference.
Price has already traded back to the opening balance, suggesting that the early upward move may have been a trap.
Value is currently building above the previous day’s value-area high.
Market Generated Information
18/10 wide POC area: Needs to be revisited.
18/10 weak low: Needs to be repaired.
19/10 developing weak high: Remains unfinished.
19/10 poor low: Remains unfinished.
Key Levels
25/09 low.
18/10 wide POC area.
18/10 value area low.
18/10 weak low.
Previous day’s value area high.
Today’s developing weak high.
Possible Scenarios
If the market gains acceptance inside the previous day’s value area and repairs the wide POC, a short toward the previous day’s weak low could become valid.
If the market fails to gain acceptance inside the previous day’s value area, I would expect a shortterm upward move as buyers attempt to maintain value above the prior range.
Overall Expectation
Overall, I expect a wide rotational day. The key question is whether value can remain above the previous day’s value area high or whether the market will rotate back into the prior value area and repair the unfinished business below.