Tuesday, March 26, 2013

Sunday Forecast of Sell-off Comes to Fruition

Seeing this chart was not necessary, and I did not have the benefit of having it in front of me Sunday night, when I forecasted a nasty sell-off Monday if Futures opened during NY Market Hours at the levels they traded up to during the premarket. We were so overextended at those levels, and it was totally apparent simply by looking at the Market Profile. Seven of the prior ten days Value Area had closed under 1550, and each time it went over that level brought with it strong initiated selling. There is no doubt distribution has been taking place for almost two weeks now (take a look at Chaikin Money Flow on 34 and 89 periods).