After a look above and fail of the extended trading range on Tuesday, price broke out to the downside on Thursday, trading through the excess lows of the range to take out two more prior weekly lows, before finally closing 23.5 points below Wednesday’s low.
With overnight inventory 100% short heading into the Thursday’s regular trading session, price opened at the lower end of Wednesday’s range, well below the very wide POC. Price failed to trade back above the prior week’s low at 2463.50 (the weekly onetimeframing higher ended the prior day).
Thursday’s emotionally driven selloff, following more severe Trump/Korea rhetoric, left multiple anomalies in the stretched out profile. Other notable market profile references on the chart are the K (11th) period rally high at 2453.50, and the late day spike base at 2442.75.
Failure to find price acceptance above 2442.75 on Friday could keep the current downtrend in tact, as nothing would have changed relating to Thursday’s downward trend.
Acceptance back above the base of the spike on Friday could see price attempt to repair at least some of the anomalies from Thursday’s profile, with potential resistance at the 9 TPO wide POC at 2449.50, and the rally high at 2453.50, below the 2457.00 prior trading range low.
If price opens within Thursday spike, below 2442.75, it would imply that price did not go low enough on Thursday to cut off the selling, and could have good odds of testing Thursday’s low. Acceptance below 2435.75 could bring in more liquidation, first targeting the top of the unfilled gap from July 11/12 at 2434.75, then potentially the gap fill at 2427.25.
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