Balance Vision

Nasdaq futures are up a bit as we approach cash trade in the US.  Each session this week, whichever party appears to have controlled the overnight session has been unable to sustain their edge throughout the session.  Thus this gap higher is suspect to a fade lower and perhaps even a down close.  However, just as soon as we suspect we find a pattern it often diminishes.

The economic calendar is quiet during today’s session.  We had Building Permits, Housing Starts, and Continuing and Initial Jobless claims at 8:30am which on the net did little to affect prices.  Traders are likely to pay attention both the BABA IPO and the Scottish independence vote taking place today.

Below you can observe the intermediate term balance.  These conditions are frustrating to many day traders who are having trouble with chop and indecision.  However, swing traders can revel in this environment for as long as it remains in place, up here near the high of the year.  I have highlighted the key levels inside this zone, including the MCVPOC at 4066.  If around 3,500 more contracts trade at this price, then we will see a major VPOC shift on the net composite profile.  The current composite VPOC is down at 3889.25 (not pictured).  If this occurs we need to be keen on who it entices into the marketplace.  Price and value will always converge.  It is our job to discern who it motivates to act.

09182014_intterm_NQ

I have highlighted the short term levels I will be observing on the following market profile chart.  Note also that I split yesterday’s profile at the TPO where The Fed response began:

09182014_marketprofile_NQ

Wake Me Up

The Fed and Yellen press conference that followed were enough to jar the financial complex where the dollar went on a rally and equities printed some big neutral sessions.  Under the surface some momentum stocks are running, others are not.

The key is staying focused on price action, the auction, and using the information as best you can to predict future market movement.  Anything ‘bigger’ than this, like extrapolating fundamentals onto a 4 day trade is sheer lunacy.  Focus on price action, volume, and leave the rest for the pundits.

We are back in the middle of balance, the dip was bought, and there is still Scottish independence to price into the market.

QE infinity

Before You Go

The action leading into the fed was close to lockstep with the primary hypothesis.  Once the information hits the wires conditions are likely to change.  This might sound a bit loopy but, I am looking for the third reaction to provide some direction.  That is, the reaction to the reaction’s reaction.

Try to keep up.

Talking book, I bought some more time in GOGO because that daily chart is just how I like it, and I joined the NMBL trade.

No one knows quite how much noise The Fed wants to make today, so keep an eye on your risk.

Godspeed mates!

Quiet Fed Morning

The overnight session was quiet as we head into a busy end-of-week.  The NASDAQ printed a below normal 9 point range ahead of CPI, which served to expand the range a bit after a lower than expected increase in CPI was released.  Overall, the range is still tight as we approach cash trade.

On these Wednesdays where we have FOMC announcements in the afternoon, we tend to see one or two actionable moves very early in the session and then a pause as the markets waits for the new information to release.  Anything can happen, of course, but having a hypothesis or expectation for the early trade means if something else happens we are seeing unique behavior which warrants our attention.

I opened the topic of intermediate term balance to the open forum Sunday afternoon because its starting point was a bit grey at the time.  Consensus was 08/25 seemed a proper start date and with that information the downside imbalance became abundantly clear.  The fast move lower and subsequent retracement higher yesterday settled the imbalance, but they also stretched out intermediate term balance.  Now I have pulled in data going back to 08/18 which gives the lower half of balance a bit more information.  Yesterday confirmed our hypothesis that intermediate term we remain in balance when we revised back to the mean at 4066.  I have noted the key intermediate term levels below:

09172014_intterm_NQ

I have noted the key price levels I will be observing on the following market profile chart:

09172014_marketprofile_NQ

[Select] Yesterday, Edit->Undo

When you have a key piece of market profile context, a model if you will, and you use it as part of a forecast, this is a process.  There are many other processes and plans, but market profile is mine.  Without me it is useless, but together we are effective and helpful for navigating the markets.

There is a big element of luck in trading.  Professionals might claim otherwise, but for as much skill as the activity requires, it also benefits from the hand you are dealt.  I have always found the harder I work, the luckier I am.  Staying humble and accepting that you can only focus on the process and be happy no matter the outcome is the core mindset needed for trading.  Today China juiced the markets, tomorrow the Fed might yank more juice than we expect, this is the flop, if you will.

If you do your job well and lose money, you can still be happy with yourself.  Periodically, check the numbers, and make changes to your methodology.  This should always be done outside of market hours otherwise you are likely to be swayed by emotions and pulled many different directions.

When the markets become fast traders have a tendency to break rules.  When they break rules they lose money, when the lose more money than they intended they either are knocked out of the game or put on tilt.  You need to work on yourself more than you need to work on understanding the latest indicator or macro correlation.  Take trades, keep good stats and recording, learn, adjust, and keep taking action.

All of that said, here we are.  We knew intermediate term balance had not been breached, and why should it BEFORE all the major news comes out?  Then we had this beautiful long liquidation profile yesterday, a temporary phenomenon of order flow, temporary.  These words are chosen very carefully when communicating with you, finest people of the interwebs.   Patrons of iBankCoin, I humbly submit my actions to you today: nothing, a nap.

It took every bone in my body to restrain from buying this morning, just as it took many of those same bones to grin and bear yesterday’s furnace of losses.  I can look at my performance over these last two days with a big ear-to-ear, wondering if in fact R.Kelly will make a proper appearance before Friday.

That is all.

Godspeed and kisses,

Raul

Contextual Roundup Ahead of A Busy Week

Nasdaq futures are down a bit overnight, currently trading near the lows of yesterday’s range.  The economic calendar was quiet mostly during the globex session, with the main release being UK CPI stats.  However, the real news over the pond comes Thursday when Scotland is set to vote on whether to continue as part of the United Kingdom.  The outcome of this election could send waves through the macro world as the Pound reacts.  Also on Thursday we have the BABA IPO.  But before all of that excitement we will hear from the Fed tomorrow afternoon who will be setting their QE pace followed by a Janet Yellen press conference.  Thus the market will have much new information to price in later this week.

Taking a quick look at the long term timeframe, we can see the trend on the Nasdaq composite is still up.  We can also see the fast behavior occurring in this gap zone from 14-years ago.  We are having a proper auction of these prices, both ways, to determine which side of the gap we belong on.  See below:

09162014_longterm_NQ

 

Determining what data to pull into your intermediate term composite is a matter of knowing what you want to see as far as detail.  Premarket yesterday we switched the start date to 08/25 which revealed the imbalance present in our upper balance.  Now I have pulled more data into the intermediate term composite to give the tail end a bit more detail for reference.  By doing so, we have some clear levels of interest to keep in mind as the day progresses.  Note also the lack of structure just below.  If we are not done finding buyers today, then there is scant volume structure to slow prices down until about 3980.  See below:

09162014_intterm_NQ

I have noted the short term levels I will be keying from today on the following market profile chart:

09162014_marketprofile_NQ

Bear Witness To The Long Liquidation

What we just observed today was the rarely discussed counterparty to the short squeeze.  My friends, this is what a long liquidation looks like:

09152014_marketprofile_NQ-bSHAPE-Ah

This is a temporary market phenomenon where an aggressive other timeframe enters the market early causing an elongated profile.  However, instead of continuing to trend for the rest of the session, the market instead comes into balance.  When this day type occurs in the context of a downtrend, there is not much you can take away from it—you just know longs were liquidated which is part and parcel to a downtrend.  However, inside the context of an uptrend, this day type often serves as a pressure release valve which blows off some steam (tosses a few pikers into the furnace) before continuing higher.  Today’s also featured a responsive buying tail, thus the bulls have a few contextual pieces to hang their hat upon.

The extension lower traveled a bit further than I expected, which elevated my concern a bit.  I might have missed an opportunity to buy some cheap charts, but part of me wanted to wait and see tomorrow before taking any action.  The kicker is Wednesday.  There is literally USA QE pace on the agenda for mid-Wednesday trade.  You would be a damn fool to not expect price movement on the news.  No matter the nature of the news, because I am not one of those analysts, there will be a reaction, and then a reaction to the reaction, and then we likely will have a pretty clear picture of how the next few days of trade will play out.  This is big league price action going into the end of Q3.  The price action this week is way above my pay grade.  I will wait for these big waves to woosh through the market place, apply auction logic to the footprints, make an educated guess about the next 2-3 days, position accordingly, and manage risk to make the money.

In summary, today we printed a b-shape profile.  These are temporary phenomena, especially during an uptrend.  We have been in intermediate term balance for 16-sessions, why break it before the BIGGEST ASSED piece of information is introduced Wednesday afternoon?  And I may not be aggressive enough, opting to not add risk today.

However, I have enough risk to tide me over, so don’t worry about your old pal Raul.  I was down about 6% today.

SOLD

The market opened today and was an institutional sale.  We had a directional drive lower off the open and it carried a bit of follow through as early knife catchers were liquidated.  With the move went many of the momentum stocks, possibly due to the Nasdaq and Russell leading the way lower.

Since my daily analysis is a point of pride, using the wrong start date for several analysis to describe intermediate term balance sucks.  Once that small change was made, the downside imbalance became abundantly clear.  Last week we were on watch for shenanigans, it appears said shenanigans were held off until today.  Old school iBankCoin bad boy Scott Bleier had a name for this—day of terror, we see about two per month in the QE environment.

Moving on, I booked my GPRO investment just shy of $70 after we nearly touched my $72 price target this morning.  Many of you thought I was a bit batty, buying this IPO and calling for $72, when in reality I was dead on.  The truth is, no one thought I was batty, instead the call was mostly overlooked.  It shall go down as my best investment call ever, to date.

I stopped out YELP early, LOCO is on the fritz, and PBPB is dead money but has me craving peanut butter.  There is still a bid in the slower names, V does not look horrible nor do my October calls.  I tried grabbing the GOOGL knife this morning, expecting some dastard reversal to print some epic hammer.  All I have is a flesh wound to show for it.

Finally, everyone has their own style of trading.  Just look at the numbers and make sure you maintain a positive expectancy.  I scale, and scaling allowed me to milk a big profit out of WB.  I still have a small piece, which is down a stupid amount of money, but the emotional toll is practically nonexistent.  As I continue to develop, this consistent victories keep me focused and sharp.

Embrace the day of terror, do not let the initial blow of its impression knock you off your feet.

Out of Balance

Yesterday I reached out to some of my fellow traders for their thoughts on a somewhat grey area of interpretation on the intermediate term timeframe—where did it begin?  By vote, it was determined the start date of our current intermediate term balance was 08/25, the Monday after a glitch at the CME resulted in a delayed start to trade Sunday evening.  Changing the volume profile to start at this session makes a significant change to the picture we see of market behavior.

If we opt to use 08/22 instead, the current volume profile is in near-perfect balance, and quiet environment where one could aggressively pursue breakouts in individual stocks.  But instead using 08/25, the downside imbalance becomes evident and suggests a bit more patience is likely to yield better entry points at the least.  I have noted the intermediate term imbalance below:

09152014_intterm_NQ

The only other way for the above profile to redevelop balance would be to blunt out on the topside via a multiday grind above the mid.

All of this analysis of past market behavior might be long history come Wednesday when we are set to hear lots of information about The Fed and their QE pace.  These types of news events as close as you will see to a guaranteed market move.  It makes sense to keep this context in mind this week, especially if the market starts grinding sideways, then we are definitely pausing until more information is made available.  This week is also option expiration for the front month index future contract as well as many other contracts.  We might see an early move because of this.  Just before the bell today at 9:15 we have some industrial production numbers which might start the futures moving ahead of the bell.

The overnight session got off to a bumpy start last night.  When trade opened in globex a wave of selling ripped through.  The volume on the move was very low and the price action erratic as if a few algos were playing ping pong.  The net result is a fairly normal 30.75 point range on volume which is slightly above normal.

I have highlighted the key levels I will be observing on the following market profile chart:

09152014_marketprofile_NQ

Describing Change

Something to keep in mind whenever using a tool or indicator or data set to observe market behavior is the risk of confirmation bias. As objective as numbers and graphical representations of numbers are at first impression, as we shape them and select pieces from them we form our own data.  The key is perception and whether it is guided by the logical mind or the more instinctive, yet emotional mind.

One of the essential tasks for any trader is knowing when conditions have changed as early as possible.  Some strategies fare better in certain conditions, like balance.  Other strategies would be better suited for the price discovery phase.  If these concepts are a bit over your head, then I suggest taking a few hours to bring yourself up to speed with market profile. This however is not mandatory to interact with today’s post.

Below I present the same chart in every way except one—the first chart shows our developing balance as I have presented it for the last several sessions, with 08/22 being the point of change where our current balance initiated.  The second chart instead uses 08/25, the following session.  What I need your help with, traders, is determining when the CHANGE event occurred.

The implications are important for a few reasons.  I will discuss these in detail if I have at least five votes.  Observe the two charts below and simply leave a comment whether your think chart 1 (08/22) or chart 2 (08/25) marks the moment when a change occurred which led us into our current balance.  If you feel like it, add a few notes about why you answered the way you did.  See below:

09142014_0822start

09142014_0825start

Balance Vision

Nasdaq futures are up a bit as we approach cash trade in the US.  Each session this week, whichever party appears to have controlled the overnight session has been unable to sustain their edge throughout the session.  Thus this gap higher is suspect to a fade lower and perhaps even a down close.  However, just as soon as we suspect we find a pattern it often diminishes.

The economic calendar is quiet during today’s session.  We had Building Permits, Housing Starts, and Continuing and Initial Jobless claims at 8:30am which on the net did little to affect prices.  Traders are likely to pay attention both the BABA IPO and the Scottish independence vote taking place today.

Below you can observe the intermediate term balance.  These conditions are frustrating to many day traders who are having trouble with chop and indecision.  However, swing traders can revel in this environment for as long as it remains in place, up here near the high of the year.  I have highlighted the key levels inside this zone, including the MCVPOC at 4066.  If around 3,500 more contracts trade at this price, then we will see a major VPOC shift on the net composite profile.  The current composite VPOC is down at 3889.25 (not pictured).  If this occurs we need to be keen on who it entices into the marketplace.  Price and value will always converge.  It is our job to discern who it motivates to act.

09182014_intterm_NQ

I have highlighted the short term levels I will be observing on the following market profile chart.  Note also that I split yesterday’s profile at the TPO where The Fed response began:

09182014_marketprofile_NQ

Wake Me Up

The Fed and Yellen press conference that followed were enough to jar the financial complex where the dollar went on a rally and equities printed some big neutral sessions.  Under the surface some momentum stocks are running, others are not.

The key is staying focused on price action, the auction, and using the information as best you can to predict future market movement.  Anything ‘bigger’ than this, like extrapolating fundamentals onto a 4 day trade is sheer lunacy.  Focus on price action, volume, and leave the rest for the pundits.

We are back in the middle of balance, the dip was bought, and there is still Scottish independence to price into the market.

QE infinity

Before You Go

The action leading into the fed was close to lockstep with the primary hypothesis.  Once the information hits the wires conditions are likely to change.  This might sound a bit loopy but, I am looking for the third reaction to provide some direction.  That is, the reaction to the reaction’s reaction.

Try to keep up.

Talking book, I bought some more time in GOGO because that daily chart is just how I like it, and I joined the NMBL trade.

No one knows quite how much noise The Fed wants to make today, so keep an eye on your risk.

Godspeed mates!

Quiet Fed Morning

The overnight session was quiet as we head into a busy end-of-week.  The NASDAQ printed a below normal 9 point range ahead of CPI, which served to expand the range a bit after a lower than expected increase in CPI was released.  Overall, the range is still tight as we approach cash trade.

On these Wednesdays where we have FOMC announcements in the afternoon, we tend to see one or two actionable moves very early in the session and then a pause as the markets waits for the new information to release.  Anything can happen, of course, but having a hypothesis or expectation for the early trade means if something else happens we are seeing unique behavior which warrants our attention.

I opened the topic of intermediate term balance to the open forum Sunday afternoon because its starting point was a bit grey at the time.  Consensus was 08/25 seemed a proper start date and with that information the downside imbalance became abundantly clear.  The fast move lower and subsequent retracement higher yesterday settled the imbalance, but they also stretched out intermediate term balance.  Now I have pulled in data going back to 08/18 which gives the lower half of balance a bit more information.  Yesterday confirmed our hypothesis that intermediate term we remain in balance when we revised back to the mean at 4066.  I have noted the key intermediate term levels below:

09172014_intterm_NQ

I have noted the key price levels I will be observing on the following market profile chart:

09172014_marketprofile_NQ

[Select] Yesterday, Edit->Undo

When you have a key piece of market profile context, a model if you will, and you use it as part of a forecast, this is a process.  There are many other processes and plans, but market profile is mine.  Without me it is useless, but together we are effective and helpful for navigating the markets.

There is a big element of luck in trading.  Professionals might claim otherwise, but for as much skill as the activity requires, it also benefits from the hand you are dealt.  I have always found the harder I work, the luckier I am.  Staying humble and accepting that you can only focus on the process and be happy no matter the outcome is the core mindset needed for trading.  Today China juiced the markets, tomorrow the Fed might yank more juice than we expect, this is the flop, if you will.

If you do your job well and lose money, you can still be happy with yourself.  Periodically, check the numbers, and make changes to your methodology.  This should always be done outside of market hours otherwise you are likely to be swayed by emotions and pulled many different directions.

When the markets become fast traders have a tendency to break rules.  When they break rules they lose money, when the lose more money than they intended they either are knocked out of the game or put on tilt.  You need to work on yourself more than you need to work on understanding the latest indicator or macro correlation.  Take trades, keep good stats and recording, learn, adjust, and keep taking action.

All of that said, here we are.  We knew intermediate term balance had not been breached, and why should it BEFORE all the major news comes out?  Then we had this beautiful long liquidation profile yesterday, a temporary phenomenon of order flow, temporary.  These words are chosen very carefully when communicating with you, finest people of the interwebs.   Patrons of iBankCoin, I humbly submit my actions to you today: nothing, a nap.

It took every bone in my body to restrain from buying this morning, just as it took many of those same bones to grin and bear yesterday’s furnace of losses.  I can look at my performance over these last two days with a big ear-to-ear, wondering if in fact R.Kelly will make a proper appearance before Friday.

That is all.

Godspeed and kisses,

Raul

Contextual Roundup Ahead of A Busy Week

Nasdaq futures are down a bit overnight, currently trading near the lows of yesterday’s range.  The economic calendar was quiet mostly during the globex session, with the main release being UK CPI stats.  However, the real news over the pond comes Thursday when Scotland is set to vote on whether to continue as part of the United Kingdom.  The outcome of this election could send waves through the macro world as the Pound reacts.  Also on Thursday we have the BABA IPO.  But before all of that excitement we will hear from the Fed tomorrow afternoon who will be setting their QE pace followed by a Janet Yellen press conference.  Thus the market will have much new information to price in later this week.

Taking a quick look at the long term timeframe, we can see the trend on the Nasdaq composite is still up.  We can also see the fast behavior occurring in this gap zone from 14-years ago.  We are having a proper auction of these prices, both ways, to determine which side of the gap we belong on.  See below:

09162014_longterm_NQ

 

Determining what data to pull into your intermediate term composite is a matter of knowing what you want to see as far as detail.  Premarket yesterday we switched the start date to 08/25 which revealed the imbalance present in our upper balance.  Now I have pulled more data into the intermediate term composite to give the tail end a bit more detail for reference.  By doing so, we have some clear levels of interest to keep in mind as the day progresses.  Note also the lack of structure just below.  If we are not done finding buyers today, then there is scant volume structure to slow prices down until about 3980.  See below:

09162014_intterm_NQ

I have noted the short term levels I will be keying from today on the following market profile chart:

09162014_marketprofile_NQ

Bear Witness To The Long Liquidation

What we just observed today was the rarely discussed counterparty to the short squeeze.  My friends, this is what a long liquidation looks like:

09152014_marketprofile_NQ-bSHAPE-Ah

This is a temporary market phenomenon where an aggressive other timeframe enters the market early causing an elongated profile.  However, instead of continuing to trend for the rest of the session, the market instead comes into balance.  When this day type occurs in the context of a downtrend, there is not much you can take away from it—you just know longs were liquidated which is part and parcel to a downtrend.  However, inside the context of an uptrend, this day type often serves as a pressure release valve which blows off some steam (tosses a few pikers into the furnace) before continuing higher.  Today’s also featured a responsive buying tail, thus the bulls have a few contextual pieces to hang their hat upon.

The extension lower traveled a bit further than I expected, which elevated my concern a bit.  I might have missed an opportunity to buy some cheap charts, but part of me wanted to wait and see tomorrow before taking any action.  The kicker is Wednesday.  There is literally USA QE pace on the agenda for mid-Wednesday trade.  You would be a damn fool to not expect price movement on the news.  No matter the nature of the news, because I am not one of those analysts, there will be a reaction, and then a reaction to the reaction, and then we likely will have a pretty clear picture of how the next few days of trade will play out.  This is big league price action going into the end of Q3.  The price action this week is way above my pay grade.  I will wait for these big waves to woosh through the market place, apply auction logic to the footprints, make an educated guess about the next 2-3 days, position accordingly, and manage risk to make the money.

In summary, today we printed a b-shape profile.  These are temporary phenomena, especially during an uptrend.  We have been in intermediate term balance for 16-sessions, why break it before the BIGGEST ASSED piece of information is introduced Wednesday afternoon?  And I may not be aggressive enough, opting to not add risk today.

However, I have enough risk to tide me over, so don’t worry about your old pal Raul.  I was down about 6% today.

SOLD

The market opened today and was an institutional sale.  We had a directional drive lower off the open and it carried a bit of follow through as early knife catchers were liquidated.  With the move went many of the momentum stocks, possibly due to the Nasdaq and Russell leading the way lower.

Since my daily analysis is a point of pride, using the wrong start date for several analysis to describe intermediate term balance sucks.  Once that small change was made, the downside imbalance became abundantly clear.  Last week we were on watch for shenanigans, it appears said shenanigans were held off until today.  Old school iBankCoin bad boy Scott Bleier had a name for this—day of terror, we see about two per month in the QE environment.

Moving on, I booked my GPRO investment just shy of $70 after we nearly touched my $72 price target this morning.  Many of you thought I was a bit batty, buying this IPO and calling for $72, when in reality I was dead on.  The truth is, no one thought I was batty, instead the call was mostly overlooked.  It shall go down as my best investment call ever, to date.

I stopped out YELP early, LOCO is on the fritz, and PBPB is dead money but has me craving peanut butter.  There is still a bid in the slower names, V does not look horrible nor do my October calls.  I tried grabbing the GOOGL knife this morning, expecting some dastard reversal to print some epic hammer.  All I have is a flesh wound to show for it.

Finally, everyone has their own style of trading.  Just look at the numbers and make sure you maintain a positive expectancy.  I scale, and scaling allowed me to milk a big profit out of WB.  I still have a small piece, which is down a stupid amount of money, but the emotional toll is practically nonexistent.  As I continue to develop, this consistent victories keep me focused and sharp.

Embrace the day of terror, do not let the initial blow of its impression knock you off your feet.

Out of Balance

Yesterday I reached out to some of my fellow traders for their thoughts on a somewhat grey area of interpretation on the intermediate term timeframe—where did it begin?  By vote, it was determined the start date of our current intermediate term balance was 08/25, the Monday after a glitch at the CME resulted in a delayed start to trade Sunday evening.  Changing the volume profile to start at this session makes a significant change to the picture we see of market behavior.

If we opt to use 08/22 instead, the current volume profile is in near-perfect balance, and quiet environment where one could aggressively pursue breakouts in individual stocks.  But instead using 08/25, the downside imbalance becomes evident and suggests a bit more patience is likely to yield better entry points at the least.  I have noted the intermediate term imbalance below:

09152014_intterm_NQ

The only other way for the above profile to redevelop balance would be to blunt out on the topside via a multiday grind above the mid.

All of this analysis of past market behavior might be long history come Wednesday when we are set to hear lots of information about The Fed and their QE pace.  These types of news events as close as you will see to a guaranteed market move.  It makes sense to keep this context in mind this week, especially if the market starts grinding sideways, then we are definitely pausing until more information is made available.  This week is also option expiration for the front month index future contract as well as many other contracts.  We might see an early move because of this.  Just before the bell today at 9:15 we have some industrial production numbers which might start the futures moving ahead of the bell.

The overnight session got off to a bumpy start last night.  When trade opened in globex a wave of selling ripped through.  The volume on the move was very low and the price action erratic as if a few algos were playing ping pong.  The net result is a fairly normal 30.75 point range on volume which is slightly above normal.

I have highlighted the key levels I will be observing on the following market profile chart:

09152014_marketprofile_NQ

Describing Change

Something to keep in mind whenever using a tool or indicator or data set to observe market behavior is the risk of confirmation bias. As objective as numbers and graphical representations of numbers are at first impression, as we shape them and select pieces from them we form our own data.  The key is perception and whether it is guided by the logical mind or the more instinctive, yet emotional mind.

One of the essential tasks for any trader is knowing when conditions have changed as early as possible.  Some strategies fare better in certain conditions, like balance.  Other strategies would be better suited for the price discovery phase.  If these concepts are a bit over your head, then I suggest taking a few hours to bring yourself up to speed with market profile. This however is not mandatory to interact with today’s post.

Below I present the same chart in every way except one—the first chart shows our developing balance as I have presented it for the last several sessions, with 08/22 being the point of change where our current balance initiated.  The second chart instead uses 08/25, the following session.  What I need your help with, traders, is determining when the CHANGE event occurred.

The implications are important for a few reasons.  I will discuss these in detail if I have at least five votes.  Observe the two charts below and simply leave a comment whether your think chart 1 (08/22) or chart 2 (08/25) marks the moment when a change occurred which led us into our current balance.  If you feel like it, add a few notes about why you answered the way you did.  See below:

09142014_0822start

09142014_0825start