Sunday, October 2, 2016

Wrapping up September and Looking Into October

The ES appears clearly above the base camp from last year and filling in th LVA between the basecamp and the barnacle island.  Observe the long term negative slope of the On Balance Volume - This is telling us long term (?) money is leaving the market, selling to retail buyers near the highs (see other institutional volume filters)   


There are four green trade zones:
2165-2180 - The top green zone is the Barnacle island.  
2145-2160 - The center (is an intermediate LVA below the barnacle island.
2120-2140 - The green zone below is the 30 day HVA.   
2100-2120 - This green zone gets is back to the contract low
Further levels lower exist from the prior contract.


2165 has demonstrated to be strong resistance and an accumulation level
2140 has demonstrated to have strong support and an accumulation level


The NQ is building support above it’s basecamp. On weak volume, achieves all time highs. Observe how the NQ On Balance Volume is climbing positive indicating net long positions.   This is opposite of what’s happening in the and making signals based on confluence “goofy”


The four current trading zones for the NQ are:
4900-4975: While space where I am anticipating low volume cautiously probing  higher
4850-4900: The 10 day HVA directly above the barnacle island
4750-4830: The barnacle island (price appears to visit this area regularly to be sure it’s still there)
4615-4747: This area covers us to the contract low.   If we fall into here, it’ll probably be due to bad news


Strong support appears at 4800



The Market Profile view shows the NQ and ES being slightly out of phase (NQ above it's barnacle island while the ES is entering it's barnacle island from below.    The pace at which the market is climbing higher is definitely much slower than when we had QE pushing things along.   Trade this region carefully.





Commitment of Traders - We have the ES and NQ going in different directions, perhaps due to some sector rotations.   Keep this in mind if you're seeking confluence between the two markets for signal entries.   (charts from http://www.barchart.com/)


ES
Buying:  Asset Managers, Small Traders, Commercial Speculators and Dealers Intermediaries (short term money)
Selling: Large Speculators, Leveraged Funds
Takeaway, The index has mostly followed Large Speculators and Leveraged Funds,






NQ
Opposite of the ES!!!
Long: Large Speculators, Leverage Funds & Asset Managers
Short: Commercial Speculators & Intermediary Dealers
Takeaway, Long Term money was going long.







Well, we are doing much better than a year ago.