Tag Archives: short covering

Short Covering

Short covering leaving anomalies in the profile chart.

Apparent short covering leaving multiple anatomies on the market profile chart. Anomalies are often at least partially repaired the next trading day or soon after. Odds could favor a balancing trading day.

Short covering can weaken a market. The daily chart has been one timeframing lower for six consecutive regular trading sessions. Price would have to trade above Thursday’s high to stop the one timeframing lower on the daily chart.

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Short Covering, Double Distribution

Short Covering, Double Distribution
Short Covering, Double Distribution

The market profile chart formed a second, higher distribution above the earlier 5th (E) period high, after an upward spike in J period, rallying to just two ticks shy of the upper distribution low from Wednesday’s profile.

Focus for Friday could be on acceptance or rejection of the upper distribution from Thursday. Price acceptance back into the lower distribution could target the session low at 2693.50, which was also very mechanical at just a single tick above the overnight low.

If price opens within the upper distribution, potential balance scenarios could include:

– Look above the upper distribution high at 2726.25 and find acceptance back into the upper distribution from Wednesday, potentially targeting the excess single prints or the opposite end of that balance. The unfilled gap remains at 2755.25 from June 22nd.

– Probe above the upper distribution high and fail, returning back into the balance with the potential to trade lower to the opposite side and test Wednesday’s lower distribution.

– Look below the upper distribution low at 2715.75, testing the single print at 2714.00, and find acceptance back into Thursday’s lower distribution with good odds of targeting the point of control, and potentially the weak low.

– Look below the upper distribution low and fail to find acceptance back below 2714.00, returning back into the upper balance and potentially targeting Thursday’s high, and the upper distribution from Wednesday.

– Remain in balance.

Whenever price re-enters a previous balance the same rules could apply – look either above or below the balance and accelerate or fail, or remain in balance. So the same trading scenarios exist if price opens within the lower distribution after the overnight trading session.

The overnight high and low are always valid trading references.



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