Four Steps of Market Activity (Developing VA or DVA)
STEP 1 Strong Vertical movement of price.It will generally takes place during the Initial Balance/IB period of the day.Market is in Imbalance.
STEP 2 Capping/Ending of step 1.It often occurs during the IB period as well.End of vertical movement and market starts to retrace and search for balance.
STEP 3 Movement is more in a horizontal direction than vertical direction and the bell curve/'D' shape begins to take shape as the market begins to ‘develop’.
STEP 4 When the bell curve is becoming fully developed and its VA/POC tries to drift towards the center of the IB, if it is not already in the center.Market tries to become balanced/efficient by filling the range created by step1.(occasionally steps 3 or 4 do not fully develop into 'D' profile and the market enters step 1 again, this is known as minus development).Minus development is very helpful in showing the direction of the market.
source : Capital Flows.pdf