Thursday, November 3, 2016

When the Levee Breaks, Part II


"Not a single pop up...." R.P.



Summary

The NQ breeched into the series of Levee's seeping lower while the ES suggested it may have found a Step 2



MP Action

NQ contract low is 1-3 days away at the present pace, in time to be reached by the election
Look for continued large lot liquidation, sell in the morning, close out at end of session



That the ES, already below contract low, held at the globex low possibly means we may have reached the Step 2 perhaps.





Price & Volume Action

Price Action with OBV Indicator showing morning accumulation, then afternoon liquidation.

Volume Action, NQ
  • Large Lot seller held price steady as small lot buyers took OBV to 12,000
  • 1130 when the SMA 200 caught up, Large lot sellers took market to S2 with pauses along the way
  • (note the different Pivot levels between ToS & TA, that TA price stops on HVA edge)
Large Lot Accumulation (short) in the morning, then mark down in the afternoon


Volume Action - ES
  • The OBV shows an accumulation of long volume beginning at the session Open
  • During this accumulation long, large lot selling is observed with the volume filter
  • 1130 liquidation commences by large lot sellers moving price to S1/Globex Low
Large Lot Accumulation (short) in the morning, then mark down in the afternoon


Summary
  • This was an interesting campaign by dealers to move the market low and make money doing so
  • During the overnight session, price was lifted from Wednesday’s LOD back to settle
  • The dealers accumulated shorts as the small lot buyers bought in the morning
  • The dealers drove price lower
  • A lot of buying power was removed from the markets with this migration lower
  • Watch for this accumulation/markdown pattern to continue until a long term Step 2 is realized.

Ruling Reasons

  • We are trending lower
  • NQ contract low is still 1-3 days away (in time for election)
  • ES appears it may have found it’s step 2
  • Short term chart levels have proven to be strong resistance attempting to go long
  • Floor trade support demonstrates that it becomes strong resistance
  • The path of least resistance is short
  • Tempo of the market suggests selling a single contract in the morning and letting it sink all day