Sunday, February 20, 2011

2-18-2011, Neutral Extreme Day, bulls win again!

Going into Options Expiration Friday I was anticipating slow choppy price action. We opened inside Thursday's trading range above the Volume point of Control and open gap. Sellers came in quick off the open but not very strong, as the market moved down to fill its gap, return auctioned back above the opening price signalling caution for the shorts.

An Initial Balance was formed that was 2.75pts in length confirming the OTF was inactive, also confirming that IB low and high was in jeopardy. As we continued with our vertical price discovery to new yearly highs taking out the IB high, return auctioned back below the IB low no doubt taking out bull stops in the process.

We then have a confirmed Neutral Day Type as both IB high and low were taken out, question was where would it close, inside the IB or in either one of the extremes.

Well we got our answer during the last 1hr of trading as the OTF either by short covering or establishing new long positions were strong into the close. Thus making this a Neutral Extreme day type.

We have a long weekend this week and have to see where price opens on Tuesday, but as of now this sets up for more bullish activity in the overnight session but the two way buy/sell activity coupled with the divergence in the NASDAQ points to some potential weakness.

We have heavy price acceptance in the 1339 area which is key level to pay attention too on Tuesday. Also 1333 on the downside as well.