medium · Volume Profile Analysis auction-market-theory

In a Trending market, price forms a Poor High at the extreme of the Initial Balance.

If the subsequent rotation fails to reach the Value Area Low (VAL) and holds at the session VWAP, what does this suggest about participant positioning?

  1. The VWAP is acting as a Rejection zone for institutional sellers.
  2. The auction is unfinished, and a breakout above the Poor High is likely to find further Initiative buying.
  3. Retail participants are successfully fading the Initial Balance extremes.
  4. Aggressive buyers are trapped below a resistance level and must eventually liquidate.

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