Here is an update to the composite profile charts posted on Friday
Through the month we have observed the dividing line at 5380 as some kind of a SAR for longs and shorts. It holds the composite POC and the vwap of the big seller from 5674 NF is also there at 5405 (current value)
In the chart below I have added another vwap for the seller from 5542 last Wednesday.
The yellow rectangle shows the range of the new seller from 5442 NF.
That vwap band is currently extended at 2 standard deviations off mean which give a 5 % probability to a new move below current lows.So a small pull back may be due here.
Ideally any touch of 5342 above or 5386 even higher should invite new sellers.
Both 5342 and 5386 are the High volume nodes ( HVN) of the composite. Today's lows at 5357 was another high volume print , marked in green on the chart.
In the trading room we were prepared for it
[12:28] Shai C: 5243 is RE tgt, but 5260 is a HVN and should give a pause
I received a mail from a reader on why I do not track moving averages on charts. The truth is that if there is a MA associated with any price which does not have volumes showing up, the market would not pay any attention to it, or to put it in another way, the market has not paid any attention to it. The inference being that only volumes can confirm the importance of price, nothing else. So it's easier to track volume at price rather than a dozen MA's and their variants from SMA's to EMA's.. Volumes are the only difference between the trades placed by us and the institutional investors and in a market place where " might is right" it pays handsomely to keep a track of where the big money is entering and exiting. Volumes are the only way we can track these footprints.It's also the reason why we track at Vtrender the FNO data sheet, which is another form of volume at price.The FNO data sheet is updated every evening at this link here.
VWAP is an MA we track simply because it is volume weighted. Infact even the VIX is a weighted average of OTM options
The short point is that if you are not using volume in your analysis , you are actually trading the market with one eye!
I leave you with today's OrderFlow chart.. IT shows a seller in control below VWAP and DPOC.
