Late yesterday morning we saw longs liquidated on the break of 1674.50 which happens to coincide with the value area low of our uppermost distribution. The long liquidation that followed built the familiar b-shaped profile although the meat of the ‘b’ is a bit wider than in ideal pictures. Nevertheless, it’s a general concept not a concrete rule. It suggests the downward development failed to attract new initiating sellers into the market and a buying force greater than the sell flow stopped the downward action.
We have a few key upside levels today, the aforementioned 1674.50, the lower low on yesterday’s session which thus far held overnight at 1672.50, and the high VPOC at 1677.50.
Below we have a still incomplete profile, and trade down to 1664 should come as little surprise. Bulls however want to see 1662.50 hold as support should we trade down to those prices.
I’ve highlighted these levels and more in the following profile chart:
