Once again, the market worked out in our favor as we have laid out for two weeks now regarding the critical importance of the 6968 Value Area High (VAH). We established a clear framework: what to do when price is above 6968 and what to do when it is below. Shortly after the opening bell, we saw a swift move below this level. While our primary downside target was 6889, the market instead sold down into the 6932 Point of Control (POC).
I posted several notes on X today regarding the significance of this 6932 POC. When you use Volume Profile correctly, you see very distinct levels acting as a roadmap for price. Because the POC holds the most volume in any given value area, it naturally acts as a magnet. The market failed to budge any lower than this level, leading to a late-day rally back up to the 6968 VAH. We saw a brief 18-handle sell-off from the VAH before a strong rebound brought the closing price exactly to 6968. This precision demonstrates the power of our methodology in mapping out value.
Because the market saw a strong rejection twice off the 6968 VAH, there is currently little to no volume built above this level. We will continue to use this VAH in coming sessions until we see volume start to build within the 6970 Low Volume Node (LVN). Since the market closed right back at the VAH, we head into tomorrow with the same thesis: expect a sell below 6968 or a bid above 6978. There was no new structural information gained today, so we are releasing this post for free as we "rinse and repeat" the existing plan.
I am adding four new tickers to the watchlist today: SLB, PCAR, PYPL, and TRMD. The full analysis for these will be posted in today's updated watchlist. These additions join a portfolio that is currently seeing cumulative gains of 321%, consisting of AAPL, CBLL, ASX, LBRT, ZGN, EDU, IBP, BLD, IMNM, SHEL, and TSLA. All of these positions are working in our favor, with over half currently up double digits (%).
Tomorrow’s Game Plan (Paid)
Primary Levels: As seen on the chart, our focus remains on the two major levels noted at the beginning of the week: 6968 VAH and 6978. Until we see more volume built through the highs, I will not focus on creating a new value area.
6978 (The Volume Shelf): This is where volume begins to drop off. Buyers must hold this level to maintain upward momentum.
6970 (Low Volume Node): Because this area is thin, we see clear direction once price breaks through it in either direction.
A break back above the LVN should put buyers back in control above 6978 for another attempt at the 7020 highs. For downside targets, we remain focused on the 6932 POC and the 6889 High Volume Node (HVN). For upside targets, we are sticking to major round numbers: 7025, 7050, 7075, and 7100.
Scenario A: If price continues to hold above 6978, we can expect a potential breakout into the 7050s. While a conservative target remains 7020 (the recent double-top), the fact that the market may fail to break lower on unchanged inflation data suggests the underlying bid is strong enough to reach 7050.
Scenario B: Volatility remains high following the inflation release. If price breaks back below the 6968 Value Area High, I expect a swift sell-down toward 6889 before we see any significant relief or support.
We are in a “rinse and repeat” environment. The structure hasn’t changed, which means our plan hasn’t changed. Success in this market comes from waiting for these specific levels to trigger rather than over-trading the middle of the range. Make sure to stay tuned for the full watchlist update being released shortly.
Have a great night everyone.
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