I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,121 Blog Posts

Sellers Better Bring The Speed

The market has been kind enough to reward even the most simple of short trades, like shorting Twitter into lockup expiration.  With this in mind, we should respect the head-and-shoulders pattern forming on the NASDAQ composite over the duration of 2014.  First thing first, sellers need to gain control of the intermediate term.  Right now we are in balance.  See below:


Here is the same volume profile (15 sessions) without bars overlaid.  I have highlighted the key price levels inside our current balance:


The short term auction is seller controlled.  We can see value migrate down after 4-6 days of overlapping.  The sellers struck first.  Yesterday however suggests the action may have been temporary.  Early in the day the profile resembled a lowercase letter-b.  This is long liquidation.  However, the sellers did not demonstrate their usual follow through.  Instead responsive buyers came in and auctioned price up for the rest of the day.

Key today is whether buyers continue responding to these lower prices, or whether sellers begin initiating more selling into the weakness.  I have highlighted these observations, a few scenarios, and important levels on the following market profile charts:





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One comment

  1. Raul3

    scenario 1 in play, tested lower, found buyers in that LVN zone, price stopped at overnight low to the tick

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