Here's a quick example on how the orderflow can be visualized as the market develops.
These charts are now gibing us an X-Ray into the health of the market.
Here are today's charts :
The NF chart above did not show us a lot of green delta as the market made new highs on the news flow.
Whenever the market is at the top of a recent trading range or even the bottom of one, we need to check if there are buyers wanting to come as the market tries a breakout. In the example above even though NF moved above the recent high of 6109, the buyers did not come.
Point 1 and 2 in the chart show that there were only sellers using the high prices to sell.
Point 3 is the place where the result came for these sellers from higher.
But also notice that as the market moved to the lows, these sellers from up above did not add new short positions. Infact the shorts were covering at lower levels.
This makes us believe that the open tomorrow will not see the kind of selling witnessed in the closing hour.
We will see how that pans out tomorrow.
Another chart of the bankNifty :
I must admit that there was a slight problem with this chart in the room earlier today just around the news announcement.
But all of us in the room did witness the lows prior to 11.00 am RBI, being bought on green delta.
The move upto 11.00 am was on good delta . However post news even though the market went up there was no substantial increase in the delta .
Finally as the market came to test vwap the last of the buyers gave way and some new shorts were added which held until the close.
The difference between this chart and the NF one was that the new sellers from vwap held on to their shorts.
I was in the trading room yesterday during MCX hours and saw some similar example for silver, copper and crude.
I will post those charts separately.
I encourage all to study a bit more on market profile concepts like value areas, vwap, IB etc and use the delta pane to confirm the signals.