hard · Volume Profile Analysis trading-strategies

ES futures close a session with a prior-day profile: VAH 5,640, POC 5,610, VAL 5,580. The next day opens at 5,598, inside the prior-day value area but below the prior-day POC. The developing session profile begins to show heavier volume at 5,600–5,605 rather than at the prior-day POC of 5,610. As the session progresses, the session POC stabilizes at 5,602.

What does the relationship between the session POC (5,602) and the prior-day POC (5,610) indicate for mean-reversion participants?

  1. The session POC forming below the prior-day POC indicates short-term accepted value is below yesterday's fair price; a responsive long from below the session POC now targets the session POC at 5,602 rather than the prior-day POC at 5,610, and reaching 5,610 requires the session POC to migrate higher first
  2. The session POC forming below the prior-day POC is unambiguously bullish for participants, because it clearly shows buyers are actively supporting prices beneath the prior-day POC, a configuration that effectively guarantees a continued rally up to the prior-day VAH at 5,640 today
  3. The eight-point difference between the developing session POC at 5,602 and the prior-day POC at 5,610 is far too small to carry any real meaning for an auction this size, so a mean-reversion trader should simply treat the two of them as one single identical level for trades
  4. The prior-day POC at 5,610 automatically overrides today's developing session POC in every single case here; the session POC printing at 5,602 carries no real significance whatsoever for mean-reversion participants whenever an already-established prior-day POC happens to sit nearby just above it on the profile

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