Target done. Now what?
At the time of this post the NF is still in the Initial Balance or the first 60 minutes of the day’s action.
We have a gap at the open which is not yet covered.
The NF maintains itself in the smaller 4904- 5060 bracket within the larger 4725- 5233 bracket.
There is a gap below the smaller 4904- 5060 bracket and a gap above it also .
Using reaction theory we can easily measure who has greater control within this smaller bracket.
Reaction theory of Market profile is nothing but the amount of market movement created by buyers or sellers.
Within this smaller bracket we had a reaction measuring 35 points yesterday in the afternoon which took the market from 4974 to 4940 which was the day vwap and from where the dominant party took control again.
We also measure that level as the pull back low, as shown in the chart.
The other slightly bigger reaction was from 4937 to 4773 on Friday which took the market down 64 points.
So a reaction of 35 points from the day high will put the market at or near 5020 in the futures.
Anything beyond this, will in all probability put the market near 4990 which is near the target end for a normal variation day with a 2IB target.