Learn the terms, and the chart starts talking.

TPO

The letters running up and down the vertical axis of the profile. Each 30-minute period of the session gets its own letter, and every price that period touches prints that letter once. Stack them and the day builds a shape. Full walkthrough: how to read a TPO chart.

Point of Control

We consider this the fairest price to do business. There are two versions. The time POC is the level where the market spent the most time, closest to the center of the range; intraday it is the target the market tends to return to, especially during rotation. The volume POC is the level where the most volume traded; after the close, it becomes the target if price re-enters that day’s range on a later day. A POC price never returns to is a naked POC.

Volume Profile

The intraday volume profile shows how much volume traded at each level through the session; we use it as intraday support and resistance and as areas to look for new business. The cumulative volume profile combines those profiles over a set range. For day trading, a few months of range is usually enough to see where the levels that brought in the most volume live. How the two profiles compare: volume profile vs market profile.

Value Area

The first standard deviation of a completed session, roughly 68 percent of the trading activity, developing out from the point of control. Value builds through the day as each half-hour period prints. Day to day, value relationships are described as higher, lower, overlapping, overlapping higher or lower, and inside. Full guide, including the 80% rule: value area explained.

Poor High / Poor Low

A poor high is a session high that lacks excess. On the ES it shows as less than two letters of excess at the top of the range, which implies the auction up there is incomplete and raises the odds the level gets crossed later. Price often pushes away from a poor high first, then comes back to cross through and repair it. A poor low is the same at the bottom. More: poor highs, weak highs, and single prints.

Every market has its own rhythms, so each trader has to learn what counts as good excess in their market.

Weak High / Weak Low

Similar to a poor high, but formed when the market makes a high within one letter of an existing reference: a previous 30-minute period’s extreme, the prior day’s high or low, the prior settlement, or the session’s open. Weak highs act as magnets for price. One does not mean much, but the more weak references sit above price, the higher the odds at least the first gets repaired. They are repaired when price pushes through and prints at least two letters of excess above them. A weak low is the same at the bottom.

Single Prints

Any level inside the range with only one TPO. Singles are a form of weakness and raise the odds of backfilling, though the base of the singles often then acts as support or resistance. If singles remain an hour after they are created, it signals the momentum will continue intraday. If they remain at the 4pm ET close, they signal the move will continue the next day; if it does not, they become a target for the market to return to.

Buying Tail / Selling Tail

A buying tail is excess at the bottom of a range, defined as at least two TPOs on the ES. A selling tail is the same at the top. Tails are the auction rejecting a price fast: the sign of a finished extreme.

Spike

Single prints at the high or low of the day’s range formed in the last hour, 3 to 4pm ET. Price must close inside the spike; otherwise it is a liquidation break or a short-covering rally rather than a spike.

Initial Balance

The range the market trades in during the first hour of the session, 9:30 to 10:30 ET. It is the opening bracket the rest of the day either respects or breaks, and its width is one of the strongest early tells. Full guide: initial balance, the first hour’s map.

Halfback

Fifty percent of the day’s range. This midway point often acts as support or resistance, and is especially useful when the market is chopping around inside the previous day’s range during the initial balance.

Balance Rules

A market is in balance when it consolidates in a range, over minutes or over months. The tighter the range and the longer the market holds it, the more potent the balance rules become; two or more days is very potent. These are a framework of the most probable scenarios, not certainties, and the market can always do something else. The five ways a balance resolves:

1. Look above and go: price moves above the high, finds acceptance, and continues. Target is double the balance area.
2. Look above and fail: price moves above the high but fails to find support and reverses back in. A short, stop above the new high, target the opposite end of balance.
3. Look below and go: price moves below the low, finds resistance, and continues lower. Target is double the balance area.
4. Look below and fail: price moves below the low but finds support and pushes back in. A long, stop below the new low, target the balance high.
5. Remain in balance: price stays inside. Trade it as rotation, fading the extremes and profile references.

The full framework, with how to tell a real break from a failure: balance rules, the five ways a market leaves a range.

Liquidation Break

Happens when the market gets overly long, the late buyers run out, and as price pulls back they panic-sell, causing an abrupt drop. Recognizing one lets you avoid the panic. The tells: it starts suddenly with no obvious reason, it is not news driven, and it retraces 100 percent, usually quickly, sometimes by the next day. As Jim Dalton would say, sometimes a market has to break before it can rally: the liquidation shakes out weak-handed longs and brings in strong-handed buyers who see the discount. Occasionally it brings in new-money sellers, which ends the break and starts a new auction to the downside.