In market profile theory, one of your goals is to detect trend days as early as possible and get on board the move. One of the catalysts for a trend day is an opening drive. The opening drive features one maybe two ticks in one direction, then a strong drive in the opposite with hardly any overlap in the TPOs (or 30 minute bars).
Yesterday we had a slightly different open, the open-rejection-reversal, but it indeed sparked a trend day. It could be seen a few other ways, too. The volume profile print showed no definitive value area all session. Instead volume-at-price would form a modest node and then press lower again. We ended the day with value hear the low as can been seen on the following volume profile chart:
The market profile theory says any entry in the direction of the trend day offers a low risk entry into the next session. Thus, any short taken yesterday could be held overnight with anticipation of being able to buy the position back at lower prices. With this idea in mind, I have highlighted a few scenarios and also the relevant price levels for today’s trade on the following composite chart:
from a long perspective, comparing the current chart to the sentiment chart is not good. Suggests we’re going to either leg down to complete panic, or leg down to discouragement. Either way, there’s another leg down.
This day doesn’t look like any of my scenarios. Perhaps the market will defy all logic and ripeth the tits.