Buyers could not hold on to their afternoon progress overnight when sell flow came in and effectively erased the gains. The market began to stabilize early this morning but looks vulnerable to another rotation lower.
We are in the process of establishing value on the indices as we work though earnings season and this week’s Twitter IPO. They busy calendar has done little to the prices on the Nasdaq and S&P index thus far, but that is likely to change as the week presses on.
With that in mind, I like to define the edges of the field or price levels which would tell me we are transitioning out of value and into vertical discovery. I have highlighted these levels below on the following S&P RTH Market Profile Chart. I used the Nasdaq 24-hour chart to envision a few scenarios on the day because the S&P 24-hour chart is very fragmented:
