Monday, February 22, 2010

Monday February 22nd Review

A rather uneventful Monday today, we had a typical rotational day building value higher and higher up the ladder. The advance-decline line was virtually flat the entire session. I haven't seen that in awhile, regardless there were trading opportunities outlined in the charts above still on a day like today.

After a small gap up into resistance during the globex session, we sold off and opened the day session at the value area high, we proceeded to close the gap in the first 30 minutes of trading.

There was the gap fill and the value area low (VAL) as confluence, that held all throughout the Initial Balance which offered a great low risk entry for a long. Once we bounced, we ran right into the Point of control, which we ran into more selling which knocked the market back near day session lows.

We then go on to make a flag formation, as buyers and sellers both compete for positions in a flat market. On the break to the upside, target should be now Value Area High (VAH) which again was met with sellers, right back into the VAL once again.

Even with the uneventful day, we still had opportunites to play ping pong with the value areas and make money, it is no coincidence that the market stopped exactly where it did. There is structure in Market Profile, these value areas are like magnets for price. They can be both targets and entries.

In a flat market like today, fading moves outside value areas are acceptable. When the internals are heavily favored in one direction, as in a trend day. Then it is ok to follow the trend by buying pullback to a value area.

Market is on its way to 1230's.