This short-term chart still shows a few days action. I have market with arrows and ellipses the areas to pay attention to. The first one on the day before Feb 1st large gap open. Not just a gap open, but also note that the price closed way above the marked .
Sure enough, within several hours after the high open on Feb 1st, the market traded down to that closing level, which was then tested another couple of times before the next up move.
End of Feb 1st: closing price way above the price close. Sure enough, price came back up to it and a day later that was the market corrected back down to.
End of 2nd: on 3rd, large gap open and market continued up all day and closed well above it's closing price (upper arrow). Expect the market to correct down at least to that upper closing , but more likely the previous one around the 135 level. Note also the colour of the cloud is , though for next day/week it turns to . Still, that is a bit of a magnet or drag on the current action. Often (not always of course) market will come back to the cloud if it is either above a cloud or below a one.
Now: if it doesn't come down, it means the sideways action is over and we will be zooming up to new highs. But after that is all over, it is STILL likely that whenever it has a more longer term correction, that it will come down to this 135 level. Check 30 min and if things change significantly early next week.
Fwliw, given the fights with Trump and the Courts, I suspect the markets will hesitate a little until all this is sorted out. There are also rumours of a huge pedophile ring bust to be publicly announced once Sessions is sworn in. If that happens, this is going to be a BOMBSHELL, provoking either a major rally or sell-off.
We'll soon see.
PS If you scroll back in the chart you can see a gap on the 17th (market down) was filled on 25th finally. Now this is in generally sideways action. If a market is strongly trending, it will go to new highs or lows and not retrace all these gaps (though often they will try and/or they will get filled a few weeks later in longer-timeframe corrections).
Then rallied to fill gap between open and previous close.
Now has gone back down to test day low which thus far is holding (11.38 EST), but now in bearish configuration viz 3 minute (my usual daytrading one in trading view since no tick charts) which has a bearish Band signal kicked in and also underneath thin clouds. On the 15 minute published here, it is firmly in band support - has not penetrated on downside - and above nice, plump bullish cloud, so there is plenty of upside potential here now that the last vwap gap has been filled at the open.
If the market cannot rally to make new highs on this run, then the next level down is the much lower vwap gap market with purple arrow around 135, although around 135.50 there is an intermediate S/R level (marked by another arrow which was not projected out to the right but there is a low there right above the gap (which I would expect be filled if/when the market sells back down there.
So: either new highs fairly soon, or market will fail new highs and then probe lower to the vwap levels identified.
That's the theory anyway. Of course nothing written here is a recommendation per se, merely a way of looking at things using the vwap. How to configure trading signals from it along with proper money management (the most important factor) is not being dealt with.
In any case, this morning's initial action demonstrates very well the value/importance of keeping track of the vwap levels. If I had only one indicator, that would be it.
Today the market reversed the bar immediately after it went up to fill the gap from yesterday (Friday) close, and made no attempt at all to probe the previous day high not much above it. This is a bearish sign usually. If the current lows are broken, expect a decent move down to next support level.
And again, that level provided support.
Case closed. I drew the two levels before market open on 6th. In each case they were hit within very narrow margin and provided support.