20160928 Review

Summary

Oil has rotated long based on the Parabolic SAR, still well within its 20 year POC area.   The news was that the oil reserved diminished by 1.18MBBL and that Libya and all of OPEC is ready for some kind of agreement.   

Also, the Senate over rode the 9/11 Victims Lawsuit law 97-1 which might start making for emotional reactions in oil....

YESTERDAY'S Price Action:

Overnight volume was within very well defined visual levels.  

Also today, Yellen got grilled pretty hard in from of Congress

Key Levels Reached:

The markets traded in popularly traded territory with many visual indicators to choose from.   Of note:

ES globex closed a lingering gap mentioned yesterday leaving no remaining gaps.

ES LOD matched the Globex POC and the top of the 30 Day HVA edge

NQ LOD matched globex levels of the past two overnight sessions

The ES HOD matched the POC from -3 days

The ES HOD settled in between 2 of the 3 HVP in the ES Barnacle island

The NQ HOD matched the globex high, allowing the ES to catch up on position.

Volume:   Mixed

NQ having 1% less daily volume than yesterday

ES had 15% more volume than yesterday

Most of which was traded beginning at 14:00 after all the other markets closed.  

On balance Volume:  Odd

NQ settled the day on net negative volume (makes sense as today and yesterday’s settle are adjacent)

ES settled the day at net even volume (very odd as today’s settle is ~7 pts above yesterday’s settle!!!!!)

End of Day Settle Volume - Appears to me that lots retail traders holding longs and liquidating cash close

ES Heavy Selling

NQ Heavy Selling

End of Day Trend:  Began at 14:00 and went long

NQ rallied to globex high

ES LEAPFROGGED over morning session floor trader resistance and into the barnacle island (slick)

Today’s view:

shows stagnant opening.

Heavy liquidation began at 1000 Germany close which coincided with ES globex HOD/POC

Heavy liquidation began at 1000 when Yellen started getting grilled

A double bottom was put in at 1130 commencing the rotation from short to long

The NQ LOD coincided with globex low

The ES LOD coincided with 30 day HVA edge

5 day view is needed to show how prices levels matched came from several days back!

• Understand that the OBV indicator is now zeroed at five days back.

I’m showing this plot below because I’d like a better Institutional volume filter.    

1400 - Large Elephants vaulted price above Floor Trader Resistance and into the Barnacle island

It is a bit hard to see but one in the Barnacle HVP, most of the buying came from retail buyers

• They took the market higher
• They had to liquidate at the cash close
• As they bought, you can barely see the large elephant sellers liquidating their positions to the retail buyers)
• The means to me that it will be soon time to go short as long term money is liquidating to retailers
• Interesting is how during the case close, there is a buying spike and not a selling spike

The NQ view is taken for comparison.   

• At the 1400 point, a heavy buying rally took place
• NQ did not climb above Floor Trader resistance but into Floor Trader Resistance
• The liquidation of orders by large contract size traders is a bit harder to make out.

• TEMPO - The course of action following Yellen did not take place until 14:00, when heavy trading got underway

• MP STRUCTURE - ES has a multi distribution day.  NQ has perhaps two distributions. Overall, we are well with the Barnacle Island Structure....

• One Time Framing - Mixed….   NQ traded within globex while ES framed longer

• End-of-day trend (last hour) tends to continue into the first 10 minutes of the next trading day (?). Use 5 minute view - By inspection, we had a rally meaning residual buy orders tomorrow morning

• Cash Out Direction - TOS shows liquidation at cash close while Bluewater Has buying spikes.

• Directional Preference:  NQ is slowing down/consolidating   ES is a mixed bag of strengthening buying based on even volume, a Moderately strong Day

PRIOR DAY TRADE REVIEW:

• Working on photos & Did not trade

END OF DAY CARRYOVER SUMMARY:   

Despite the funny volume games, a trend is a trend until broken… Tomorrow, I’m expecting ES to reach the top of its Barnacle Island at 2185 and resynch with NQ.

If price files to advance higher, we could be putting in a complex top which would be unlikely with the easy money from the Feds.

Commodities

Over lunch, I checked out a sampling of commodities to get an idea of the action.

It appears falling commodity prices have halted with new points of control developing suggesting the higher prices of yesteryear were perhaps too high to begin with?

It also looks like we missed a good buying signal for Silver earlier this year.

I'll be back from time to time to update this section some more...

Gold - GC


Over the twenty year long haul, it doesn't appear that gold may be moving much in recent history. Since so many nations are tied to gold, it would make sense that calm gold prices means a happy world of nations regardless if the nations are really happy or not...

However, since it's so crazy valuable, any tiny move it makes is for big coin making closer look interesting...

Interesting is that gold is at it's 20 year point of Control and within its #1 main high volume area - In this generation, gold appears to be at it's fair price.

Zooming in for a closer look on the 3 year window, gold is near the high of it's High Volume Area meaning a liquidation back to the mean would be natural.

I guess that means too that anything driving price outside of this fair value would not be natural?

Finally, zoom in on the 1 year view shows that gold is actually creeping higher recently, finding support below and constrained at the top supporting the conspiracy theory that something big will have to break gold out it's current price zone




What to do? For a long term investment, I'm not looking too much into gold. Intraday trading of gold is till viable.

Natural Gas - NG

Many companies producing and transporting Natural Gas got hit hard during the recent fall in oil & gas. I can see if natural gas were to regain acceptance in the upper distribution, companies on the brink may be able to find new life and might be obtained at a discount. Otherwise, if natural gas stays down in this lower distribution, a few more bankruptcies of natural gas producers may be in store.

Here is a 1 year view - We are at the 1 year high for NG. Either it'll stay in bounds or rally to the next block of fair value higher (as seen in the 3 year view)

A three year view of NG, that we are at the three year POC and at the edge of value, either we stay here or bounce to $4 from 2.89 (essentially double) as we are at the 1 year high...

Oil - CL

Many companies producing oil & gas got clobbered in 2016. An examination seemed appropriate.

Oil has created a new 20 year POC and we are at it now

Zooming in a bit - 1 Year Oil with  30 day MPs - We are definitely centering around what appears to be the accepted value. At this price, it may be possible to perform examination of companies to see if they can operate at this price level.

30 day Oil MP - While the average price of oil appears to be settling, there are still opportunities for intra day trading.

Palladium - PA

Steady at it new value area from the past 5 years

High Grade Copper -  HG

Copper is used everywhere. It's also appearing to have been quite volatile in price. Over the past five years, its volume has been increasing steadily.

Also, price settling around a new Point of Control

Silver si

Rats.... Missed the bounce at the beginning of the year…

Live Cattle - LE

Declining since 2014 - Should be a great time to stock up on steaks?

ZW Wheat - ZW

Falling since 2013

Corn KC

Steady for last two years. I'm reckoning that it's price might have went crazy with the ethanol frenzy but that's simply a guess. Will follow up...