The globex markets are the setting for bullish progress this week and early this morning we saw another wave of buying roll through the market. As we enter the thick of earnings for major tech companies, the index teeters at annual highs.
The intermediate term is showing signs of coming out of balance. Below yesterday we have a volume pocket separating us from the balance formation. However, we could still explore a bit higher to settle out the imbalance existing from bottom tail-to-mid verses top tail-to mid. I have highlighted this level as well as the pocket and key LVNs below:
Yesterday we printed a very clean “normal” day. This type of day is characterized as having no range extension from initial balance and suggests an aggressive early entry by the buyers was following by balanced, two-way trade. The placement at new swing highs suggests acceptance of these higher prices. The late-afternoon selling was widely expected to continue but instead the dip was bought. The one unique quirk that had so many day traders expecting a new LOD yesterday was the triple-bottom at initial balance low paired with the big gap. These traders were stopped out but will be hunting a break of 3942.25 on any weakness. I have highlighted this level and a few other observations on the following market profile chart
Hypo 1 – responsive selling early on to test yest VAH 3957.25, rotate higher but stall before overnight high 3968.25 and choppy trade down through 3957.25 to fill overnight gap to 3950.75
Hypo 2 – open rejection reversal lower, cut through yesterday’s value area, down through 3950 and target a test of the poor low at 3942.25. A break of this level opens up the intermediate term pocket from 3942.25 – 3941
Hypo 3 – drive higher on open, hold 3964 early, take out overnight high 3968.25 and buy flow comes in and presses higher to 3974.25 imbalance level.