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In today’s session I wanted for us to talk a little be about what people will refer to , CHOP, SLOPPY, UNDEFINED and maybe a slew of other words that cannot be written. Over the last week and even in the last few days the market has been in what we call a stage 3. It is part of the structure building process of building value in a new area on the chart. The market will run back and forth from unfair highs to lows and back again. Creating what may look like noise or crazy market movements.

When you look at the chart below you will notice the blue hologram showing the volume profile that is beginning to build at these new levels. You will also see that the last three days how the market has gone back and forth between 1626 and 1646. NOTE the hole in the chart at 1633 area. This is an area that the market is trying to fill in. Originally there was not a lot of business transacted at this location but as we go back and forth through this area volume begins to fill in. Think of it just as a pot hole in the road, sooner or later someone will come along and fill it in so no longer will travelers need to be concerned about it.

Market structure is a very important piece to understanding the bigger picture of what the market is speaking to us. In the case of our current profile it’s creating a very defined edge for us to trade from.  The profile is starting to resemble a bell curve which we know in the statistics world that is where 70% of the data points fell into. Just like in anything that you may be measuring a frequency of, the market profile graph gives a look inside to the overall health of the market.

Keep your eyes on this structure over the next few weeks as it will create great opportunities to trade from and also give us signs into if this market can really sustain these new highs. This friday  is  Unemployment report day. Last month was the start of this new vertical move. Now with us just days away from it again it will be interesting to see if we can stay within this new valuation or if we get knocked out of it.

Happy Profiling