Interesting to see patterns repeat

This is a repeat;; both in the early days of the week.The last one is higher than the previous one that should be intresting to note.These patterns are caused by commercial activity in the market. It suggests to me that the big investors are buying, however we are still within the trading bracket.
The way the market is left today with this thin profile is a waiting game for me , I'll give it a session or tow to see how it develops. The space is filling nicely which means we are drawing closer to a value effeciency .And there we should move on to discover different price ranges.

WEEKEND 18/7/2010

The profile chart below describes how I read the martet data, it's the Australian share price index futures contract; but it could be a currency ,intrest rate product or and individual stock like say BHP.The output reads the same way.Each profile shows the area of value for that time the shaded area defines where 70% of trading took place, the center line shows the point of control or the value price at the widest part of the profile , the price that had the most hits.
1. profile one shows the market still in the vertical phase.

2. In the second profile we begin to see more horozontal development , a sign that the vertical phase is comming to an end. This is where the first sellers arive.
the bottom of this profile is very close to the value price of the first profile. the bulk of the volume is below the control price suggesting buyers still see value and are prepered to re initate longs.

3. Profile 3, we see the sellers back again and this time more dominate , it's fair to say here that the initial up move is being shut down.They move price back to the bottom of value in profile 2 (A)where the buyers return in profile 4.

5. BALANCE !!! buyers and sellers at evens here .

6. A probe higher is rejected and the first signal that we could have a top in place ....here we see the sellers begin to take control.

7. the sellers have the upper hand . while the value price of profile 3 provides support (B) which breaks.
Reading the market this way dosen't exactly provide me with entry and exit but it does tell me the condition of the market , and which is the best aproach to take when making trading desisions.

In the bar chart it becomes obvious that the market is following it natural process of distrubition and is attempting to fill the space, where the minus development exists , and in so doing completing the curve.I'm not trying to predict anything, just go with the flow or as they used to say GET WITH THE STRENGHT AND BANK COMMON WEALTH !

weekend 11/7

The previous weeks end headline was:

WORST QUARTER SINCE 2008

The end of this weeks headline was :

Stocky rally in the best performance since 2009.

Crikey !!! it was almost like someone in a rage jumping behind the wheel and flooring it.
Well one thing I like about markets is nobody forces anyone to do anything , if the driver dosen't wear there seatbelt bad luck ! Thats the fair an open kinda world I like.
Higher ???? possibly, I'm watching treasuries .
The Share price index : last weeks madnessss will resolve itself in a couple days , and we will get a clearer indication of future direction then.






Boy a few wild swings last week.

en.

Wednesday 7/7

Well not only did the mrket reject prices in the lower part of the previous trading bracket it went straight into re-trace mode, attempting to fill the space above.
Fund managers all excited about the prospects of the new financial year,with there money bags burtsing with cash freashly garnished out of other peoples salaries ready to have a lash at it. You could almost feel the excitment from there little work pods all over the city.A brief pause at the point of control, before the RBA's desision and yippy io
up we went with good volume.Well so far it's failed.... where trading back inside the bracket.This is normally a very bearish signal , however lets no put to much of a damper on youthfull enthuasium we should at least let them have a go at a double top, fill the space and complete the curve.
Looking at the leader the S&P 500 you will see that the bearish failure is indeed in place in fact it did'nt even make it out of the trading bracket. Not to say it can't make another attempt, but for now caution is a good word from my perspective.Support for the S&P500 is around 1018.If they manage to get our market higher today watch for a sell off into the close.

Weekend chart comparison 3/7/10

Compare the 2 charts below one includes space for time defalt( bar chart) and the other dose not(profile chart).
The profile chart compresses time to show both volume and value.

There are 100 : 30 minute bars contained in this trading bracket 40% of those time slots have traded at the control price of 4219. Above this level prices have been deamed to expensive and below too cheep.From fundamental knowlege we know that to profit we need to buy below value and to sell above it, the market smiply facilitates this process.
Minus development is a force in the market, it is defined by where the market will not trade. The more time the market spends filling horozontal time slots the more likely it is that the minus development will be tested.However current price action suggests that the minus development above the market is still valid.A mav cross followed by a failed auction late in the session suggests the support at 4205 will soon be tested.
Accepting prices below this support level adds a further bearish tone to price action, and a break away from background volume could see the market resume a vertical faze to the downside.On the other side if support holds then it becomes more likely that the horozontal nature of price action will prevail and we could see an attempt to re-trace and fill the space above.It is also important to note that the current structure(a selling struture ) is within the value area of the background structure , telling us that for now the background is still in control and capturing price.When trading we should all be alert to the fact that we have the opportunity to make greater returns when the market is in a vertical faze(non-random) as apposed to the horozontal(random).85% of the time the market is horozontal,leaving us with just 15% of time to reap the best rewards.






Compare the two charts the levels are the same .
A reference to my blog can be found on the ASX website charting libary.
Topic: Market Profile

Effeciency before non farm 2/7

Friday 2/7/10

Spi range below is 4185 to 4280 ..the point of control ( value price ) is 4219 unside mav cross is un convincing with the macd histo heading lower.