Trader Lounge South

Thursday, November 17, 2016

Approaching Thin Air

SUMMARY

- Price is grinding higher and entering "thin air" altitudes, where price action has historically slowed down

MP ACTION - ES

ES PRICE ON THE NORTH SIDE OF POC 34 (THIN AIR REGION)

Price action slowing approaching ATH

Price matched recent globex (-2) high
Three consecutive trending days

MP ACTION - NQ

NQ PRICE ON THE NORTH SIDE OF THE BARNACLE ISLAND POC

PRICE APPROACHING THIN AIR TERRITORY

PRICE APPROACHING ELECTION NIGHT HIGHS

VOLUME ACTION

EOD VOLUME DROPPING TO PRE-ELECTION LEVELS

NOT SEEING AN ATTACK ON ATH WITH INCREASING EOD VOLUME

VOLUME/PRICE ACTION - 1 DAY VIEW

WHAT WOULD’VE BEEN A GOOD OBV DAY ENDED WEIRD ON THE ES

EOD SELLOFF IN ES BROUGHT PRICE OBV TO ALMOST NET ZERO
HOW DID PRICE NOT DROP?
WATCH FOR ES PRICE TO COLLAPSE IN THIS THIN AIR REGION?

VOLUME/PRICE ACTION - 90 DAY VIEW

UPTURN AFTER THE ELECTION OF OBV READING
ES OBV STILL NEGATIVE AS PRICE HEADS INTO THIN AIR TERRITORY (HEDGES)
NQ OBV NEAR NEUTRAL HEADING INTO THIN AIR TERRITORY

RULING REASONS

- The EOD selloff in the ES is curious - Will these high's hold?

- Price action is slowing down as the ES approaches all time highs with trading volume declining to pre election levels.

- The NQ appears to be happy filling in support inside of low volume areas

- Great swing trading behavior

- 3 days into trend (watch for trend to continue and Step 2/3/4 action

Hunkering in...

Today, I took the day off to tend to some family matters. The following is a post day review of some of what went down.

On the big picture front, Trump is continuing to pick out his cabinet and pundits are making forecasts....

MP ACTION

NQ IS DEMONSTRATING A RELUCTANCE TO REMAIN IN THE SWAMP
YET NQ IS DEMONSTRATING THE BARNACLE ISLAND AS HEAVY RESISTANCE
ES IS APPEARING TO FILL IN THE LVA BETWEEN POC #3 & #4

ES SPENT THE DAY FILLING IN THE NARROW LVA BETWEEN POC #3 & POC #4

NQ SPENT THE ENTIRE DAY FILLING IN THE LVA BENEATH THE BARNACLE ISLAND POC

VOLUME ACTION

EOD VOLUME AT PRE ELECTION LEVELS

VOLUME ACTION - 10 DAY OBV SHOWS INCREASING LONG POSITIONS

PRICE ACTION

(BREAKOUT ALERT) ES INSIDE ACTION
(BREAKOUT ALERT) NQ STAIRSTEPS ONE LEVEL HIGH

I believe we are in a hunkering in period

Commitment of Traders

Fascinating…. Entering into the elections, practically everybody was flat
Immediately after the elections, Asset Managers Bought and the Dealers unloaded

Large speculators continuing to go long
Dealers continually selling (towards the top)

Friday, November 11, 2016

A few days ago, I commented on likely spots on where price would hunker in. The elections came this past week . The Big Money operators were able to move to markets some incredible distance, yet wind up essentially where it started...

By making observations on price action, we are becoming better at identifying price targets.

Friday's MP Action

NQ dutifully set about filling in the LVA swamp today…

ES set about hovering at POC #3

MP Action for both: Inside days… (Research three point triangle breakout)

Friday Price Action

Inside days for ES & NQ
NQ settle 4742, POC, globex POC very close to and prior day POC & settle
ES traded around Settle (-2 days) and at the 1 year POC #3
ALSO SEE
-- MINIMAL NQ OBV IMPROVEMENT
-- NET ZERO ES OBV MOVEMENT

ES HAS PUT IN A TWO DAY DOUBLE BOTTOM WITH A DESCENDING UPPER TREND LINE
WATCH FOR BREAK OUT SHORT

Volume Action

EOD volume lower than Day -1 & Day -2
Yet very good volume to wrap up the week
It'll be interesting to see next Tuesday's COT report.

SECTOR ACTION

XLF XLI & XLY LEAD THE DAY
XLP, XLV & XLK LAGGED THE DAY

PRIOR DAY TRADE REVIEW:

-I left the Bot running in SIM Mode

-Moves appears fairly honest

-Congested FT floor/ceiling trading possible with help from robot

Summary: By moving during the overnight, Big Money traders were able to move the market considerably during the Election. Yet price essentially went nowhere - Perhaps not good for long term investors but yet presented intraday traders several good opportunities.

To be continued...

Tuesday, November 8, 2016

Election Night 2016

I was in Jury Duty Today, the day after election night;

Here is some of what went down Election Night and The Day After -Summary:

The methodical liquidation Tuesday night jived with Trump winning the central US
Despite the tremendous flush and missing the SMA 200, price returned into the trend today
The overall volume change during the Tuesday Zig/Zag was close to net Zero
Overall buyers joined the fun today with price essentially moving nowhere

Daily View

The ES is showing confused consolidation
Technically, the NQ looks like it should bounce long
The limit lock down kicked in on the NQ short of price reaching it’s daily SMA 200
I believe the SMA 200 or the limit was the lower price target in the mind of big money

MP Action ES

Election night Globex not shown for clarity
After FBI had cleared the Weiner e-mails last week, ES rallied to the defined HVP

The three day trend has been long, however this price might be an ideal hold location

MP Action

ES price has returned into a trading range last visited 21 days ago

MP Action NQ

Globex not shown for clarity

NQ has returned to the north side of the Barnacle Island Point of Control
The three day trend is long, however, this would be a possible hold point.

Volume

Today’s overall volume was 200% of daily average (!!!)

VOLUME Action

The election night zig/zag was accomplished with essentially net zero volume difference
The election night globex session had roughly the same participation as a daily session. With fewer present to protest, price was able to move quite freely
Whoever was the operator behind the election night zig/zag made lots of money
Today, the OBV buying increase (outsiders joining in) - Yet with little price lift
Trend is intermediate term low-high

Tuesday DAY'S Price Action

Price clearly rallied out of the swamp into popular price range
It's my opinion that this is the "home base" from which price will either fall or rally