Monday being Columbus day - delivered a low volume neutral day. I view Thursday, Friday's lower distribution and Monday as a 3-day balance. Monday's POC is very prominent - any open away from the POC has high odds of returning to it. Notice that Wed's POC at 1443.25 to 1444.50 is also a prior balance area low and may act as support. The top of the 3-day balance at 1357 is resistance and stopped the move up in the Sunday overnight session. The trading question for Tuesday is do we open in or out of balance relative to the 3-day balance and Monday's very prominent POC.
Hi
ReplyDeleteCan you explain what are Anomalies? Specially in the above chart.
Thanks
Manoj Gattani
Hi Manoj - great question and something that I struggled with a lot initially .....here is what they mean...
DeleteAn anomaly is a single price or price levels that lack symmetry, an unusual structural arrangement in the Market Profile®; they represent structural weakness.
Anomalies are often the result of forcing action such as short covering and long liquidation-market action that doesn’t always allow for rotational, investigative auctions. They produce high odds of being revisited, however, very often, Anomalies are not corrected or repaired on the following day.
With respect to Anomalies, observe the following - is the market advancing or declining smoothly; for example, if the market was advancing, anomalies lower the odds of upside continuation.