Today’s session was a tug-of-war between momentum and gravity. We started strong, rallying above our key levels and breaking the previous session high. However, the move fizzled out after just 40 handles of upside, resulting in a sell-off that dragged price back below the 6966 VAH.
While the overall trend remains up, this “look above and fail” is not a great look for the bulls in the immediate term. We also saw Services PMI come in stronger than expected at 54.4 (consensus was 52.3), showing that the economy still has some heat. But as we know, the market’s eyes are fixed on the heavy hitters: Unemployment and CPI. For tomorrows session, the mission is simple: price needs to reclaim and hold the 6966 VAH to keep the 7000-breakout thesis alive.
The Post-Mortem
The 40-handle rally early in the session provided a solid rally for those following Scenario A, but the failure to hold the high suggests that sellers are still defending the psychological 7000 level with conviction. This reversal has placed us right back into the “thick” of the volume profile.
Despite the index’s hesitation, our core belief in the structure remains. We are now entering a phase where the market is likely to seek balance within the upper Value Area. Gravity is pulling price back toward the high-activity zones, and how we interact with the VAH on Thursday’s open will dictate the next 50–100 handles.
Volume Profile Notes
There is very little complexity here: majority volume sits just below our current price. When we are trading below the VAH (6966), the “magnet” of the POC becomes significantly stronger. We are currently sitting in a pocket where the bull and bear cases are nearly balanced, making the opening print vital for direction.
