[Soultrader]

Nikkei took another beating today with clear range extension towards the close and into the evening session trading hours. Late afternoon range extension has forced price to leave the previus 3 day balance area to the downside. We now seee that 1/18 rally was just a short covering. ("P" profile on January 18, 2008)



Below shows the 1/18 profile which resembles that of short covering. This is because the previous bracket area was higher. A succession of lower brackets or value placement followed by a "P" profile and then further decline is short covering. We can only tell once the profile of the following day is complete.



Will be interesting to see this effect transfer to the US market. Once my US market datafeed is fixed, I will post relevant charts on YM or ES analysis.