What first catches my eye when viewing yesterday’s profile is its shape. It nearly resembles a lowercase letter b. The shape of the profile indicates sellers overwhelming the tape early in the session only to find interested buyers down below. It’s often referred to as long liquidation which is the opposite of a short squeeze. Once the temporary excess of supply from top tickers and chasers ends the market stabilizes. Often times the occurrence of a long liquidation can mark the low of a trough. However, I’ve noted a bias line where I want to see trade sustained above to be constructive on long positions. The level also acted as resistance during the overnight session on three occurrences also before we blasted through it around 7am. Watch trade in and around 1415:
