Morning Color

October 22, 2025

Good Wednesday morning,

When we are in an environment where the market only goes one direction, up, it is challenging to determine when a potential pullback might actually occur that lasts for more than 10 minutes. The father of Market Profile Theory, James Dalton, always says: "You need to figure out what game they're playing", meaning the big institutional players that actually run and dominate the market, and right now the machines are continually turned on to the buy side. That's it right now!

Every pullback is continually bought, and there doesn't seem to be a care in the world about putting money to work at ever higher prices. Will there ever be a pullback that lasts for more than 10 minutes? Will traders and investors finally sell and take chips off the table? The answer, of course, is yes, but the difficulty is figuring out when! Could it be today? Tomorrow? Next week. We are not sure, but we will look for the clear signs of strong liquidation. The game plan laid out each day will at least give us the important prices to look for, so buckle up!

📊 In the profile pic and key levels, futures are basically flat to mixed, so it is anybody's guess what today might bring. Hence the roll of the dice above! I feel the market is getting tired up here and will be looking for lower, but unless certain levels are taken out, then I can't get aggressive. People right now are not only hitting the bong, but drinking the bong water too. Not a good recipe for clear thinking and common sense! This market, as mentioned, is nothing but up, up, up, but once the music stops, there are people who are going to get crushed once we have strong selling. Why? Because their trade location will be very bad for long positions.

All that being said, futures are above the first key level which is half-back at 6,774.50. The next key level is the POC at 6,780. As long as the price stays above one or both of these levels, then the bulls remain in control. It's just that simple. I call this the beach ball market. What happens when you push a beach ball under the water?, Of course it pops right back up. That's the current market we are in.

Now, let's pretend, or imagine, that the market actually does trade in two directions, and goes down?!?! (WOW what a crazy thought!) Well then, we would need to see 6,774.50 get taken out, then look for VAL at 6,771.50, then the overnight low at 6,764. Then, you could actually look for lower targets. I know. Quite a fantasy.

Futures are currently trading at 6,778 at the time of this writing.

🧭 VPOC Update: No new VPOC's were added or taken out yesterday, so we still have 8 below with none above!

Current VPOCs: