Inside Day Following Outside Day

Short covering early following price opening at the previous two day balance low.

inside day following outside day - market profile chart
Inside day following the prior outside day

Traditional market profile references are not as reliable in instances of short covering. Wednesday’s late spike base was of little significance as price one timeframed higher to begin the trading session. The one timeframing higher stopped in H period, and price reversed and continued to one timeframe lower for the remainder of the day trading session.

Thursday’s profile left multiple anomalies. Often at least some anomalies in a multi-anomaly profile structure are revisited the day after, or soon thereafter, they are created. The low from Wednesday remains questionable, being exactly at the half back level from the 9/18 profile.

Inside day following outside day to the downside
Anomalies in profile from 9/27, inside day
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Liquidation Break, Outside Day Following FOMC

Liquidation break following FOMC release. The base of the late spike at 2920.25 could be an important early market profile trading reference, depending on where price opens. Value for the day remained overlapping to higher.

late downward spike on market profile chart
Late downward spike on market profile chart accelerates price through the low of the prior two day trading range

Opening below the spike base and within the spike shows price acceptance and could keep the late break intact. It signifies the market had found a level where two sided trade could take place.

Opening below the spike is negative, price has not yet found a level where two sided trade can take place.

Opening above the spike can be positive, since the late spike was rejected, leaving a buying tail.

The low at 2907.50 exactly matched the half-back price reference from 9/18, a very visual short term trader’s reference.

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