We had a neutral extreme day on Friday and the point of interest was if the market would go below the spike lows of 5331 established on Friday or if they would auction above the 5340 zone which was the POC of the composite profile below 5380.
The opening swing took the market upto 5859 but that was it for the longs today, as the seller came back in and drove the market lower a 100 points from the top.
Generally when we get spikes like the one we had on Friday, spike rules apply
From a profile perspective the move below the spike low was true and a further range extension below IB low was an invitation to build shorts.
We do have a dominant seller with the neutral extreme close and today's selling tail at the open showing as strong signals. However as pointed out this evening in the blog post, a reversal to the mean trade cannot be ruled out here.
Also a POC very close to the VAL is always a sign that structure was not a balanced distribution and changes are lurking.
The BN chart is also showing long liquidation at the very top.Two prominent POC's are right below and will be watched closely for supports in tomorrow's session.