Market Trading in Value, premarket August 7th, 2006

[Soultrader 12]

Wanted to post a chart picture of a market trading inside of value. What does this mean?

 

There is market acceptance of price perceived by the sellers and buyers. Market value has not shifted from Fridays action. One thing to note.... the value area was created mainly from Fridays afternoon session. If prices do break above value, we will see significant resistance at Fridays high which is a cluster with S1.

 

If the markets break below value, this is also a break away from Fridays low range. This will indicate price rejection and will likely send prices lower to S2 or even S3.

 

Some trading strategies based on this pre-market information: Look to fade the value high with confirmation of tape. Both the value high and low can act as a bracket for todays trading session. However, the value low will probably hold stronger than the high because it is in line with Fridays low. Any break from value and look to use the the VAH as support and VAL as resistance.

 

I will post another chart after the market closes.

 

 

[Soultrader 12]

Chart post of the opening 30min action. Notice how buyers and sellers share similar opinion on where value should be. The market is in balance at this point. Both the value low and high can act as key pivots to fade.

 

 

 

 

[Soultrader 12]

Notice how the value low held as key support. Unless prices break out of value the markets are in balance.

 

 

The two dotted red lines represent the value high and value low.

[Soultrader 12]

Notice how prices retraced to the midpoint indicated by the dotted green line between the VAH and VAL. The TICK also made a new high indicating a shift in market sentiment. The value high pivot is also in line with the gap fill and daily pivot. Although the markets are still in balance at this point, we could see a possible lift to the upside.

 

[Soultrader 12]

Chart picture of the market at close. Prices remained in balance throughout the entire trading session. Hence, the importance of understanding market concept with market profile. On a bracket day like today, you have to understand to take profits quickly instead of holding on hoping for a trend to develop.

 

Also notice the unfilled gap in line with the value high at 11288. This will be a key level I will be looking at tomorrow.