The start of a new month tends to carry volume with it and yesterday was no exception. Prices traded lower fast to start the cash session in the Nasdaq after opening right at Friday’s low. The initial drive down behaved much like news had caused a swift other timeframe entry, however it was largely due to a sharp sell in shares of Apple, the largest company in the world.
The market spent the rest of the session confined within the 61.5 point range developed during the first hour of trade and overall led to a weak climate for individual stocks. The heavy churn managed to shift the VPOC of the current micro composite up from 4242 which was a subtle contextual development. Whenever I see a VPOC shift it tells me two things—value has migrated and it’s time to closely observe who it motivates to act most aggressively on the market (buyers or sellers).
The Nasdaq is still trading above an air pocket which separates us from the mutli-day balance formed from 11/13-11/20 unlike the S&P which is already down in its pocket. Buyers need to sustain prices above 4268 to hold off the process of exploring and negotiating the pocket open just below current prices on the Nasadq.
The overnight action was up and contained within the balance formed yesterday. Buyers were most active thus my expectation is for the open to feature a push lower to test the overnight inventory. Sellers will look to target the MCVPOC at 4290. If buyers are not found in this region then I expect us to continue lower to test the overnight low 4283.50 then Monday’s low 4273.50.
Swing traders will be eager to see if the speed in the marketplace continues which may lead them to raise cash of even seek out short positions.
I have highlighted the important levels I will be trading from on the following volume profile chart:
Bought me some generators this am, too much of a short float not to take a shot..looking for 45, extra colt
I like it, still with it