hard · Volume Profile Analysis
In a trending market, price retraces to a prior session's Point of Control (POC) and immediately prints a long lower wick on high volume.
How does Auction Market Theory classify this behavior?
- Initiative buying at a prior value area, indicating that the trend is entering a parabolic phase.
- A failed auction at the POC that suggests the market will eventually break lower to find more buyers.
- Responsive buying at a prior fair-value level, reinforcing the trend's structural integrity.
- Rejection of the trend as participants are now trapped at the POC and will liquidate on the next rally.
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