Friday, November 4, 2016

Get Set....

Friday, the ES daily touched SMA 200 and NQ daily touched SMA 100.   This last occurred during Brexit and afterwards… Perhaps this was the script CINC gave to Yellen to give to the big money people...
ES reaches SMA 200 and NQ reaches SMA 100

Also, as discussed yesterday,the NQ was 1-3 days from testing it’s contract low.   Today, the NQ was was able to test the pit session contract lows and requires another 30 points to test the contract low with globex.

Because that was a globex event (Brexit), I don’t know if we will reach that level or not.   Nonetheless, it’s about a day away.
NQ Pit session matches Pit Session Contract Low
The Globex session contract low is another 30 points lower...

MP Action
  • ES appears to have put in a double bottom after 8 days of decline
  • NQ appears to have put in a sloppy double bottom also

Price Action
  • ES HOD was a simple test of yesterday’s POC & Pivot
  • ES LOD matched yesterday’s LOD and near Globex Low
  • ES LOD was at the SMA 200 on the daily

  • NQ HOD was at daily Pivot & HVA Edge & Yesterday’s VA
  • NQ LOD was at S1 (TA)
  • NQ LOD was at the SMA 100 on the daily

Takeaway, just in time for an election day rally???

Volume action
  • Inspecting the OBV finds accumulation during the 1st half of the day,
  • Markup beginning around 1000
  • Liquidation takes place after energies closes
  • Large Lot Trading reflect the above price action
  • This appears to be a very clever move put into today's script, transacting high than average volume and essentially moving little...

Summary - I believe we are in position for the elections.   Where do we go from here, who knows....

Thursday, November 3, 2016

When the Levee Breaks, Part II

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


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

  • 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

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  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

  • 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


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

Great News for Beef Lovers!!!

HE - Cattle

I don't trade cattle but I am an avid consumer of beef - This review is purely a curious look...

20 Y weekly
- Recently, cattle prices has just made a 20 year low!
- Prices are around 30% of the all time highs!
- Prices have broken below the 20 year composite fair trading range

1 Year Daily
- Cattle have been on a steady decline since the peak of summer
- Not sure with the data I have, if the supply simply exceeds demand or
- Perhaps with following fuel prices, the cost of raising cattle and feed has diminished
- Regardless, this trend is good news for beef lovers

90 Day 4 hour
- Notice the recent gap down during contract roll over and downward plunge
- Observe customers buying cattle at 20 year low prices....
- Stock up your freezer!

Gold - November 2016

GC 20 year weekly
- Gold is trading within its 20 year fair value range

GC 1 Year Daily
- Looking closer over he past year three defined distributions formed, all within the 20 year range
- In recent months, gold broke out from the higher to middle distribution

GC 90 Day 4 hour
- With the elections ahead, gold safe haven is being sought
- The question is will gold be reaccepted at summer highs or....
- Will gold prices fill in the Low Volume Range
- Possible swing trading opportunities
- Possible long term safe haven possibilities (but near the high of 20 year range)
- Continued Intraday trading opportunities

Natural Gas - November 2016

NG 20 year weekly
- Natural gas prices are at previous century levels
- Perhaps investments to historical highs may be high & dry?!?

NG 1 year daily
- Showing a seasonal increase for the winter months but...

NG 90 Day 4 hour
- So far with a mild autumn, heating demand is lower
- Caution with longer term trading
- Proceed with intraday trading entries

Oil - November 2016

Oil 20 year weekly
- Price is centering around the 20 year Point of Control
- We must conclude that oil is at it's far price
- That price is between the price band where US producers can find profitability
-- Unless producers can get their production costs lower, reentering oil production is risky

Oil 1 year daily
- A sharpened view of how oil is trading in fair price territory
- Price is above SMA 200 but rotating lower off its distribution edge towards the Point of Control

Oil 90 D 4hours
- Price appears to completely ignore SMA 200 and heading to the 90 day Point of Control
- This would support the notion that oil is not trending, merely auctioning in fair value
- Observe classical swing/intraday trading entries.

Tuesday, November 1, 2016

Plan B...

Pundits write how equity valuations are overpriced, how the market has priced in a Clinton victory, and not in position for a Trump victory. On Friday, the FBI announces reopening the case against Clinton and the market flushed. Yesterday,volume was light and the range narrow while I'm assuming Big Money held meetings on what to do next.

Today, with the FOMC meeting underway, Big Money made what i believe, was a coordinated retreat.

Tuesday's Price Action:
  • Because of the depth of liquidation, looking back 1 year for market memory
  • Following the Friday’s FBI announcement, My opinion is big money had a meeting Monday
  • The past 90 days, the NQ and ES built barnacle island structures pursuing All Time High
  • Low volume participation at ATH and fundamental over valuations observed at ATH
  • Prior to the creation of the barnacle islands was a one year history of sideways trading
  • In my opinion, big money deliberately moves to bridge the 1 year HVA and barnacle island
  • Price liquidates to defined HVA features drawn days prior
  • Strong Buying Tails put in on both ES and NQ
  • IMO, this is a contract test
  • This would be consistent with the market pricing in Clinton and not Trump
  • My targets are now in the LVA following normal tradeable price action.


  • 4 distinct distributions

Price Actions
  • Key price level tested:  ES High Brexit level
  • Daily Range 240% average

  • Both at 150% of average
  • NQ Volumes started the day with light large lot distribution picking up steam around 1200
  • Heavy NQ large lot liquidation until 1515
  • Lots of stops had to have been taken out
  • Lots of buying power has to have been taken off the table

SUMMARY - In my opinion, price executed a planned retreat, perhaps likely to fill in a low volume area... This should present nominal intraday trading opportunities.