Oct. 11, 2006 YM Analysis

[Soultrader 12]

Whats interesting about yesterdays action is that we had almost and identical value area placement. The value high is lower by 2 points while the value low is at the same exact price level from Oct.9.

 

We now have a value pivot cluster zone and these two pivots will act as key resistance/support. If we take a look at a market profile chart (see attachment) notice the 4 days of overlapping value. We are currently stuck in a range between 11941 - 11863. The 11900 is also a key level to watch as we have POC placements in this area.

 

On a daily chart (see attachment), the markets are pulling back to the May high breakout point. The 11860 - 11863 level will be a key support level to watch. Any break below it and we will most likely go and test the trendline. Any break below the trendline and watch out!

 

Premarket Thoughts: Overnight session bounced off support at the 10/09 lows at 11880. This will be a key level to watch for the morning session. We are now trading below the previous days value and range. This could lead to a rapid decline to the downside. After 4 days of consolidation, we may see a trend.

 

What's interesting is the market action as the closing hour yesterday. Price looked as if it wanted to close at the value high pivot but then declined rapidly for 40+ points to finish weak below value. This indicates selling pressure and weakness. If price can not lift into value today, I will focus more on the short side.