Post Andrew Smith Dinner

A quiet week - The summer heat waves have finally subsided and thank goodness for the Andrew Smith dinner last night...

This is the 30th blog I've posted - Thanks for letting me do this as it has helped me tremendously bring order into the deluge of information I've taken in over the past year, where it became apparent that a QE bolstered market was a thing of the past and a better understanding was needed.

First, the usual run down, a trade review, and then some loose thoughts...

Big Picture - No Change.  The three equities are filling in marked areas and proceeding with intraday in-balance trading rules. For the while, even oil appears to be settling. As I've become more efficient in the daily routine, I will start rotating in different charts of interest.

VOLUME ACTION

• Large lot buyers appeared today, unable to bring the round bottom up above horizontal support
• With all the large lot selling at the lows of the past two weeks, I’m again surprised price did not collapse, meaning to me a skilled operator is driving the bus.
• In the spirit of “no change” I would think whoever is buying all this inventory will be needing to mark up price soon
• I'm thinking for better legibility, discarding the ADX and MACD panels on this view.

STRUCTURAL ACTION

- Throughout the day, multiday lookback MP features played a part during today's live action. Seeing this play out over a period of hours helps make the day make sense

- Today’s ES pit was very responsive to the globex action (this is a recent change). This evidence supports the need to pay attention to the global playing field

- The NQ continued to fill in the identified LVA (as called)

- The ES continued to fill in the identified HVA (as called)

- This continues to be a sign of Short Term Money in charge of the market.

- What it will take to break out of this area, I’m suspecting it’ll have to be big news or the elections. (although I do have a theory in my mind that with all of the algos trading upon observable reference points, we may be having a dynamic damping of what used to be human driven action)

YESTERDAY'S Price Action:

Interesting - LOTS of visual levels near today’s settle.  

After the morning test low, a single linear climb was observed all day

On Balance Volume indicates buying (for a change)

Afternoon Trend - Long, yet unable to gain high acceptance (for now)

Cash out:  Mixed….  ES Short Cover, NQ Liquidation

PRIOR DAY TRADE REVIEW:

0841 Premarket Position - Volume Wave Trigger.

0900 Premarket Position - Volume Wave Trigger

At first glance, both of the above entries would've required a bot to detect.

1027 RTM(20) - Somewhat risky as this was heading back into the open yet demonstrated a normal day distribution taking place over the entire day (and not just during the initial balance period)

1340 Retest and GapFill (flinched on a couple false entries wiped out morning profits)  Observe how price didn’t cleanly bounce off SMA 200, rather, the prior day POC. I would call this a blown play that scored anyway.

Price action Trade Review.   At the end of the day, several were able to trade off the HVA edge.

False entries during the mid day rally - Sloppy alignments and trying to go long on the after lunch breakout wiped out morning profits, yet netted positive for the day.

END OF DAY CARRYOVER SUMMARY:   

• Afternoon trend was long suggesting long carry over
• If I were big money, next Monday, I'd have to decide if Im going to the level above or stay in the present level
• If I were the big money that bought all the large lot sales over the past two weeks, I am getting in need of marking price up for a profitable distribution.
• If I am big money that's been selling at these levels, I would not wish for price to go lower in order to sell at the best price I can.
• By Next Tuesday, a review of progress on the entire contract to see if a revisit lower is necessary
• If I am big money, I'm likely rotating my portfolio based on earnings reports as options expire today in a manner were even if the composite average does not move, my holdings will reflect earnings news and the upcoming elections.

Perhaps another week of musical chairs?

A New Tempo to Reckon?

Summary

Some interesting movements today.

On the big picture, today's story remained the same with NQ filling in the LVA and ES filling in  it’s HVA

Daily Chart showing NQ continuing to consolidate and the ES in a weak position below its SMA200.

Big Picture Action

MP View confirms...

MP Action - NQ filling in LVA

MP Action - ES filling in LVA

The NQ and ES are showing some range bounding - keep in mind for possible reversals or breakouts tomorrow...

MP Structure respecting visual references.   Watch for reversals and breakouts.

Volume Action.   

The Round Bottom did not materialize today, in fact, large lot sellers were continued liquidating today.   Price action made very little attempt to break above horizontal resistance.

Volume was higher than in prior days. If large lot interests are selling, who in the world keeps buying? Or as Casio would say, "this pig is floating...."

Two Weeks of 30-Minute Data

PRIOR DAY TRADE REVIEW:

I stayed up late the night before drinking scotch and watching the debates.   Did not see it this morning…

I don't typically do what-if trade reviews but in light of the seeming stagnate action, it seems appropriate for me to see if I'm missing something - Perhaps I am?

Post Day - Possible Entry Review.

Close to identical Trades between the two markets:

Time

08:06 Premarket Positioning (No visual trigger but possibly a great robot entry)

10:26 H&S Top

10:49 FT Resistance - Short / or POC reversal short

11:58 SMA All Aboard Cross Long

12:45 POC Reversal

13:56 FT Support Long

Summary: Despite the seemingly inactive day, there were textbook signals present.  This was encouraging.  I suspect with the large institutions that have recently reported higher trading profit with fewer traders and with price essentially going nowhere, the “tempo” of the market has to have changed.  

I have noticed that moves no long coincide with certain TPOs as they have in the past (i.e. the 1030 ProFunds Guggenheim return to open comes to mind as does the German and London Open).   Perhaps this is temporary since I’ve begun collecting notes.    

I’m also now suspecting the use of the On Balance Volume Indicator with these HFT’s that can repeatedly “sell (accumulate)”, mark up with little volume expended, and resell.  An interesting article in Bloomberg on broken indicators  (http://www.bloomberg.com/news/articles/2016-10-19/wall-street-sees-graveyard-of-broken-indicators-in-reform-s-wake)   brings this thought to mind.

END OF DAY CARRYOVER SUMMARY:   

Quit staying up late drinking scotch and watching presidential debates - With the possibilities of an evolving market shaping up, it’s time to pay close attention...

Thought 1 - Volume filtering is showing large lot selling, yet prices remain higher.   If I were big money, I wouldn't want prices to drop if I had to liquidate lots of inventory.   

Thought 2 - If I were big money getting stuck buying all this selling that somebody is cramming down our throats, I would like to mark up price so I can unload with a gain.

Thought 3 - We are in a purgatory where volume is simply being shuffled in a loop creating trading profits while the market goes nowhere.    

To Be Continued...

Final Presidential Debates Tonight - And Today, Nothing Happehend....

I called it - NQ today set about filling in LVA and ES fortifying the HVP south of the Composite POC. Inside todays actions, there were few trades...

This week were reports on how the financials are reporting higher trade profit with fewer workers, I believe the tempo of the market has changed...

MP Action - These next two charts show little other than slowing price action on lower volume with a possibility to continue filling in the LVA tomorrow.

ES filling in LVA

NQ Filling in LVA

MP Action respected visual MP artifacts supporting the claim that short term operators were in control today.

MP Action, NQ

MP Action ES

On the second consecutive day of even lower volume, price action adhered very well to recent visual indicators - Again, a sign of  short timeframe traders.   

Prices responding to visual chart levels - A sign of short term operators...

Volume Action - Volume was around half of daily average.  By all intents, supply has dried up at this range?

The large lot filters show two different stories, selling in the NQ and buying in the ES while the retail traders in both took price higher. A two week round bottom is taking shape suggesting a climb higher perhaps.

IF NQ breaks 4850, then 4850-4900

IF NQ rejects 4860, then 4775-4850

IF ES breaks 2145, then 2140-2170

IF ES rejects 2145, then 2100-2145

Unless something "drastic" happens….

Reason to stay here.  If I were Big NQ Money, I would stay the course filling in where I am at structurally filling in the LVA and the same if I were Big ES money. However, with volume so low, this to means activity here has dried up and a move is in order.

Reason to go long.  Zooming out to the 12 day view, there is slight evidence of a slow bottom being put in.   The ES large lot traders were buying today.  The NQ large lot buyers were not present today but price climbed due to the small lot traders.

If I were buying all of last weeks inventory in the NQ, I would want the price to go higher before liquidating.

Likewise in the ES that has endured lots of selling the past two weeks.   If I were buying all of the inventory, I too would want price to go higher so I could liquidate.

Reasons to go short:  The OBV continues to show liquidation.  Perhaps this is an indicator that is broken?  If continued selling remains the norm, a liquidation would have to be the result - a fundamental correction.

To be continued...

During This Week's Monday Meeting....

Monday’s Action:

See prior analyses  - I called it…..

NQ in Balance

After last weeks effort to converge, today, we sat there in balance with volume between 17-20% below average and less than Friday’s volume - We were in balance.   

ES in Balance

Today is Monday and Big Money was in meetings wondering what to do next while price filled in MP anomalies from two days back (Thursday) leaving a relatively clean day today - Time to move on from here?

Price Action

Price action continues to follow OBV lower.   However, the ES is finding support off off a major trend line.   Observe the numerous settlement prices within close vicinity

For both the ES & the NQ, the trend toward the end of the day was a pathetic long - Suggesting going long at the opening.

NQ Price Action in Balance

ES Price Action In Balance

VOLUME ACTION

Examining the 30 minute charts with the large lot volume filtering:

The NQ had heavy large lot selling (yellow) in the morning and afternoon with a brief large lot buying TPO at 11:30 and beginning at 14:00

If I were large NQ money buying the morning, I would have taken the 11:30 opportunity as a markup to liquidate in the afternoon.   Heck, I might have even been the person selling in the morning.   The marking up beginning at 14:00 might be in preparation for another liquidation in this area soon?   The net difference in the NQ between buyers and sellers (72941 vs 73320) is barely 400 contracts (0.5%) - A balanced day

If I were large ES money buying in the morning, and unable to lift price above the SMA 200 (yellow snake), I would’ve decided going long was not an option and sold out during the afternoon.   This would agree with the notion (see below) that the likely path of least resistance may be going short. The net difference in the ES between buyers and sellers (517068 vs. 522059) is barely 1%. - A balanced day.

For both the ES & the NQ, the trend toward the end of the day was long - Suggesting going long at the opening.

NQ & ES Volume Action

END OF DAY CARRYOVER SUMMARY:   

If I were big ES Money:

1) I’d like to stay where I’m at building support in the 2115-2135 Basecamp

2) I may have to pack up and move high a) because I’m finding major trendline support and b), I’m far from SMA 200

3) I may have to had lower because a) the path of least resistance is lower & b) the OBV is telling me to sell.  If price crashes (unlikely with the fed control) I’ve marked entry points where slow-mo entries are likely.

Regardless, I have a feel for the terrain.

If I were big NQ Money:

I like it where I’m at…

If anything, I may visit the MP and fill in adjacent low areas above and below.   Also, I can’t keep ignoring the OBV selloff forever.  Tis earnings season…   We’ll see...