Thursday, April 25, 2013

dWbShadowTrader Quad

Yesterday's Value Area was prominent again today. Off of the open, price came in to retest VAH. This took bounce took prices up out of consolidation to new highs. The move up occurred simultaneously as A/D Breadth and Up/Down Volume found support from their respective MA's. I noted this in the screencast of the opening range, as it has been a similar pattern during the week--once breadth and volume found support from their MA's prices had continued to new intraday highs. Once the Up/Down Volume lost moving average support, price immediately began to cascade lower. There was an earlier signal on the A/D Breadth prior to the highs, as it temporarily lost MA support. At that point though, breadth was 'walking the plank', as I say, and a sell-off was looming. The lowest $Tick reading of the day corresponded with the lows of the decline. From there price bounced up, sold off again, but to a FNL, and then traded sideways above the 5 day Value Area High into the close. The volume profile is not what you wanted to see as a bull here. The market is extremely overbought, and it hinted at this on the quick decline from the HOD. Tomorrow look for price to retrace above the 38.2% level where it is pinned now, before ultimately forming a topping pattern (head & shoulders, or diamond top) and moving lower the remainder of the day. The Highs tomorrow may be at the opening bell.