- After the rally from earlier in the session, the day has developed a double distribution and as a result, there is a low volume pocket.
- Price eventually fell back towards VWAP in the second half, a strategy that I will start looking at in more detail in my trading journal entries going forward.
- We were trading way above the deviation high and saw a double top, before retracing back towards VWAP
- Is that an expanding triangle that failed after the 5th point?
- High volume node to draw price back to?
The price has come down towards the black dashed line, but I think we have seen the move today. Tomorrow will likely be low volume, especially in the afternoon. So I will watch the opening range for a reaction to today’s volume profile. The balance point levels are still valid as well. Especially if we break higher.
The target 12487 mentioned in the daily article level did not quite get there on the futures, but a lot of retail brokers showed the levels we wanted. The balance point analysis (speculation) seemed to work out well and I heard from a few traders who took some trades and were pleased with the levels. The moved seemed to be ignited from a break above the value area high from Friday.
I am watching the black dashed line as a possible retracement, possibly even a short-term (scalp) from the 12,488 level towards that dashed line. Not quite getting the Reward:Risk required.
Earlier in the day
Does the gap open this morning suggest a potential balance point? I do not want to chase the idea for too long, but if it is, then I am watching a move to 12487 and it could work out to be a nice trade. I just need to plan the entry to get a decent reward to risk ratio. In fact there are a few nice areas to mark out on the charts with these balance areas. Here
Here are a couple on this chart:
I have also been playing this idea for a longer target:
It’s based around the idea that the gap this morning is a balance point. It’s not always a given, but if it does play it, it can open up an idea.