Wednesday, November 2, 2016

Fill in the Swamp or When the Levee Breaks...


“I might have.  In any case we're close to a reversal or a plunge.....lol.  have a great evening.”  J.B.

- AT&T is being sued by the DOJ
- USX bombs it
- Oil retreats to POC on excess inventory report
- Clinton/Trump race tightening
- Markets had priced in Clinton, reported 15% drop should Trump win
- FOMC does nothing



MP ACTION
  • Recall last Friday was FBI Friday and price action did a Zig/Zag (sign that camp is breaking)
  • Recall Monday was dull, an ideal meeting Monday
  • Both ES and NQ have been on a major migration on Tuesday and Wednesday (today)

  • Destination?
  • -- The ES 1 year composite POC held for LOD (trouble if breached) - “The Levee”
  • -- NQ reached composite HVA for LOD, not as well define (Stronger HVP below at 4700)

  • In two days, ES and NQ have spanned across an ideal Low Volume Areas “The Swamp”
  • -- Normally, I would expect price to reverse and trade in this LVA

  • Warnings of Breaching the Levee
  • -- Both ES and NQ POCs were lower today
  • -- Strong large lot selling throughout the day with little counter buying
  • -- Floor trader support levels became demonstrated resistance
  • -- Next lower NQ HVP at 4700
  • -- Other(Oil fell (surplus inventories)

The NQ has moved to span the Low Volume Area aka "The Swamp"
The ES moves to the 1 Year Point of Control


Should the Levee Break, a higher view from the helicopter is prudent
The ES View from higher above....

NQ view from higher above

ONE LAST THING TO CONSIDER
THE NQ HAS NOT TESTED THE CONTRACT LOW AS HAS THE ES, POSSIBLE DOWNSIDE REMAINS



Takeaway
  • While the trend is short
  • Looking for reversals long to fill in LVA
  • Else if the Levee Breaks…..