In this day we find the the Initial balance is slightly smaller than a Normal day or a Normal Variation day. Price makes a move away from this initial balance early in the session but is not successful in creating a good range extension. It then comes back in the IB and travels through the IB and makes an attempt at a range extension on the other side of the IB.
Accordingly based on the second attempt of the range extension we have 2 types of Neutral Days
a) Neutral Center : In this type of day the second attempt of the range extension is also not successful like the first one and the market comes back into the IB and closes near the day center or midpoint or even Vwap or Dpoc. On such days we consider both the buyers and sellers as equal in strength and the close in the middle as a fair close.
b) Neutral Extreme : In this type of day the second attempt of the range extension is successful and the market finishes the day at one extreme which is often the day’s highs or lows as the case may be . In this day type either the buyer or the seller is considered more stronger than the other and gives us a very good context to watch for continuation.