Restoring Balance

The markets constantly shift from a state of balance to imbalance and back into balance.  This behavior is a result of the open marketplace and how buyers and sellers come to an agreement on where the value of a security is.  The key is knowing which timeframes are in balance, which are not, and who is likely to be participating in the marketplace given the conditions.

With the Nasdaq trading near annual highs it is reasonable to expect most participants are active in the market to some degree.  Right now the intermediate term is out of balance.  Even though price re-trended higher yesterday, we never saw value shift higher.  In fact, our VPOC stayed pinned back where the prior consolidation was.  The price action was impressive from the bulls but they are now tasked with proving their grit by sustaining this move and pressing value higher.  I have highlighted some of the interesting intermediate term levels below, including the “crime scene” where the rally-breakdown-rally seems to gather steam:

Short term we are out of balance on the RTH profiles.  It takes some chopping to see the auction properly but value is indeed moving higher.  Overnight we printed a very balanced session, see below:

US personal spending came in below expectations and consumption expenditures were in line during the 8:30am announcement.  We have Fed’s Bullard speaking in New York at 1:05 PM and some afternoon treasury auctions.  There is also a natural gas report at 10:30am.