The overnight session has seen the S&P index as much as seven handles higher from yesterday’s close, putting in two rather methodic rotations higher. The resulting volume profile is wide however, which paints a more neutral picture of the session. We may need to see more profile development before we’re able to build any context from it.
The key feature of yesterday’s profile is when price “fell out of bed”. A liquidation took place at 2pm and price tumbled 9 handles lower before recovering off the lows by about 33 percent. The resulting action left behind an excess low at 1647.50. Someone, aka they, found the price such a bargain, they snatched them up with aggressive reactive action. Should we trade back down to this level and the market doesn’t receive the same aggressive reaction from the buyers, we can take it as a sign that something has changed, and position for lower trade.
I’ve highlighted this excess low and other key levels in the volume profile look, enjoy:
