If you watch the overnight or Globex session, you would have noticed that buyers filled in the selling excess represented by the gap left on February 21, 2013. Price opened beneath the gap fill and buying after the open could not fill the gap. In fact, sellers stayed in control throughout the day, expanding the range to 2 times the initial balance by day’s end. Some solid trades short were had near the value area high which was nicely positioned just above a low volume node (typically an area to watch for rejection not acceptance).
Where are we headed from a Market Profile perspective? As we speak selling is still in control. We are heading down into an area of balance from December 26 – 29 of 2012. That area’s composite volume profile is in magenta in the chart below. The area from 58 to 73 would be a nice area for support and is also highlighted on the 4 hour time frame chart. Once that is reached, we watch for a rotation up. It is also possible that current value at 93.20 (as noted on the profile above) will move down to price and if the market accepts that new value (a balance area is formed) we could have a continuation down. Exciting stuff! Let’s wait and see what tomorrow brings.