Thursday, September 15, 2016

20160915 - Thursday Post Day Review

MENTAL STATE: I woke up waaaay too early this morning and got busy making chart fixes based on ideas from Charlie Lewis’s Currency class.   Was not in the right frame of mind this morning and did not become grounded until later in the day.   Nonetheless, I got lots of useful work done.

MONTHLY: Despite this present pullback we are in, the monthly trend long is intact..  Note how the NQ was late joining this recent rally (poor FANG news this recent spring) and now seems to be catching up.

WEEKLY: Close examination shows despite pullback, only the ES rotated short.  ES and YM appearing to bounce off SMA 20 (orange) and NQ bounces midair.  
DAILY - Pullback run is intact for ES and YM.  NQ has triggered a daily rotation long  This phase shift will create some interesting trading in the weeks ahead as the ES & NQ will be negotiating different MP formations with different S/R levels.

MP View - I am starting to use the 5 day MP along with the longer term MP….. The 270 day look back MP shows that the ES and NQ are structurally in two different locations.   This will make confluence a bit more challenging and will have to rely more on trading what’s in front of the individual chart.

The 5 day MP is a recent thing I’ve come up with on the Thinkorswim platform for tactical use.   Within a single day, the profile can be affected considerably so it will be important to draw these before the session starts.   I selected 5 days on the notion that Long Term Money campaigns will require more than a day to complete.  I may reserve the right later to use 10 day or 20 day MP composites (1, 2 or three weeks) depending on how the auction/price action appears to be shaping up and will annotate the differing time frames in the discussions.  

What I like is how much quicker I can come up with these MP perspectives depending on the need through the course of the trading session to better spot targets & confluence of support & resistance.

Also, you can see where I’ve added vertical time lines specifying key events throughout the day.  This was a charting idea that came from Charlie Lewis and while it may added some pre session work updating these key time events, I like the idea of having everything in front of me.

On the above chart for the ES, the MP is admittedly blurred ast price filled in between the two HVAs.   This single chart down shot me that price rallied today and settled on a POC from three nights ago confirming that this rollover Zig/Zag is a large scale and well thought out event.   Inspection shows considerable volume file is needed between today’s settle and the gap fill from last Friday.

In the above chart for the NQ, we can see how the NQ has jumped the gap from last Friday which is nice but has leve a ditch of low volume between 4760 and 4790 - Which to me is an area where the NQ might loiter tomorrow while waiting for the ES to catch up?

YESTERDAY'S Price Action:  The prior two charts may become my charts for reviewing price action in the future.   They address the following topics and require less amplifications.

  • VOLUME - NQ & ES Volume was steady at 135 - 140% of average  BUT lower than yesterday

  • POSITION/STRUCTURE - One thing to add was that the distributions today were long and spindly, a sign of short term money fixing prior anomalies left behind.

  • Runaway / Excess / Spikes - Will we liquidate one more time to rescue the prior globex low prices?   That remains a question for the days/weeks ahead/

  • Key levels reached - As mentioned, the NQ has closed it’s Friday gap and within striking range at it’s all time high.  I do not believe (despite recent success of AAPL) that we’re ready to accept prices up this high as we’ve still some LVAs needing to be filled with cement.    My hunch for the ES is that the range from 2137 to 2156 will need some filling also.

  • Pivots / Charlie’s Charts - Coming Together
  • WHERE IS THE COMPOSITE POC? - Above and below us
  • MP POC/VA/LOD/LOD Feature relationships (higher, lower?) - All around us….

  • TEMPO - A stop killer, short in the hole squeeze  kind of grind all day.

  • Has one time framing failed?  Not sure how to declare this.

  • Rotation / One day reversal / Key reversal Day - Target destination at other end of range - Both ES and NQ appear to have reached the opposite ends so I believe this valied.

  • End-of-day trend (last hour) tends to continue into the first 10 minutes of the next trading day (?). - I’m still not sure if I believe this.  Today, we rallied all day.   That would mean tomorrow, we see a brief  rally out of the gate.   To be determined….

  • Directional Preference - Higher values on less volume => Uncleaar


Trade review - In days before when volume was light, the SMA bounces would agree which I would use as a qualifier.   Inspection finds that with high volume (approximate 146%, the SMA bounces are a bit different.   I need to get comfortable with this.

In the afternoon, we had some continuing range extension so I got in with a slo mo.
Also see the missed SMA bounce in the ES


The strong volume at the opening bell went to simply fill the sink hole of low volume which I believe was by design.   The initial balance move was not recognized when it happened as the higher volume caused a non confluence of SMAs entry qualifiers.

By definition, we have an uncertain market biding time filling up the LVA.   

In the mean time, I’ve spent effort to further simplify and reduce confusion.   We will see what the overnight brings…..