6-30-10: Wednesday -- Fresh Lows

It's never easy to still be awake when a almost full day of balancing action breaks out in a flurry.

However, there are a couple of tendencies that many times are present before the afternoon liquidating break -- possibly alearting the astute trader to keep his eyes open!

1) The day is unable to trade at or above the overnight highs. (And the overnight highs are below yesterday's range highs.)

2) A series of lower highs print below the HOD.

3) A base on or just below the VWAP before the final breakdown.

Today's low volume probe above the A period highs, fell short of the overnight highs by 3 ticks. Then lower highs ensued, followed by a multi-hour base that oscillated around the VWAP.

6-29-10: Tuesday -- VWAP Reversals Trades of the Day.

Today's huge 16 point gap probably put a little bit of a damper on the downward volitlity today, although the market was re-priced effectivly during the session.

6-25-10: Friday -- Mixed Snapper Action

Once the market broke out above the VWAP on TICK breakout highs, it was off to the races as some shorts covered. But, the mixed nature of many stocks in the basket were a big clue that not all was well and some afternoon selling brought the ES back to the VWAP. The bulls can hang onto the fact that the VWAP held and the bears can point to that today's rally didn't even come close to testing yesterday's range highs.

6-24-10: Thursday -- Downtrend Continues: On Snapper Watch.

Today was a excellent trading day should the astute trader identifiy early going that reference areas of both TIME and PRICE were in play.

Most notiably today I've highlighted that classic reversal times and S2 were in play.

Despite the downtrend, today like yesterday, felt a bit tired on the downside. Dull downside action is always suspect.

6-23-10: Snoozer Fed Day

So much hype about Fed days and now they are snoozer-events! Not great news for the arms dealers, such has Rob Hanna, selling $35 dollar guides to Fed day books. http://quantifiableedges.com/fedguide

I'm sure that it's a great book but count me out for now.

Afternoon Liquidation From Balance: The Metrics

Linda Raschke always says to play for reversal trades in the morning and to watch out for trend moves in the afternoon.

Boy, there are so many instances lately where she's sure been dead-on with this rule-of-thumb!

IF the market was going to liquidate down in the afternoon out of balance, today's structure sure printed some clues:

1) Morning range highs print below overnight range highs.
2) 1st major impluse up towards range highs, with strong TICK, falls short and prints a lower high.
3) Price breaks through VWAP to the downside and prints a double top pattern at VWAP.
4) From there the 11:00 (PT) sell programs kick in and the breakout from balance in confirmed with breakout in momentum (new low TICK and delta readings) along with above 45 day average volume.

Price Structure Ruled Today

It's really hard to fathom a trend day down off of a +15 point gap up, but at least the day structure did not discount the possiblity of such an event.

Trade of the Day!

Sometimes they just don't get any better. TICK, structure and time of day all come together in a harmoney of knowing.

Where was the Volume Today?

I didn't hear anyone else mention this, but today's up move came on signficantly low volume.

So low, in fact, that not one of the 30 minitue periods printed anything close to thier 45 day average volume figures.

Yesterday, the afternoon selloff, printed the last 5 periods above the 45 day average.

Just a metric to ponder as the markets rally.

Broken Uptrend Leads to Afternoon Liquidation

This is a textbook example of what happens when what should happen does not!

Trade of the Day: Reversal at Morning Range Lows

Significant rotations are highly likely most days within the first hour and a half of trade, it always pays to be on watch for them.

Also, not noted in the annotated chart, is that the morning session highs printed exactly at 9:00 pacific. "Nooner" programs as they are dubbed make this time one of the most likely reversal points during the trading day. And it happened once again today!

Lower Momentum Break of Yesterday's Lows: A rebound Tomorrow?

Fade the UP/Down Volume Internal and Get the Horns!

As the indexes swooned on Friday, here is a chart of the UP/Down volume that I find a strong "tell" in support of the 8 EMA grind lower.

Great Example of a Tricky Trading Day

So what makes a day "tricky"? Not that each day is a smooth boat ride down the river but today's action was a day where you got hosed if you were not careful.

1) Gap fill long reversal trade in morning worked perfectly with taking profits at VWAP. Here is where, it probably would be best to take your money and run.

2) Descending triangle below the VWAP, broke news lows in a rather decent range expansion move to the downside. Given that internals were totally neutral to positive, this is a trade that does not work all that often.

3) Buy response from lows kept grinding upwards for the remainder of the session.

The improbable range break down morphs into counter-trend grind up of eternity. This can get tricky for the mind indeed.

Not great trading structure but it's nice that my level of experience kept me out of harms way.

Anatomy of a Successful VWAP Pullback.

Today printed a great example of a buy able pullback to the VWAP within the context of an uptrend.

Let's try to identify the metrics:

Morning Trend Up:
1) Early session value establishes itself above the VWAP.
2) 1st test of VWAP after establishment of value above prints a rejection tail with just a tick or two of rinse.
3) Morning trend is slow and consistent to the upside. VB delta prints mostly green and cumulative delta, Up volume, A/D readings are all in up trends. TICK is in high-momentum mode and printing lots of 800 and 1000 readings.
4) The TICK moving average stays above zero and the cumulative TICK indicator is green and increasing.

Pullback from Range Highs:
1) Weak volume on pullback from range highs. VB deltas don't support increasing selling with no readings printing beyond -6000
2) TICK extremes down fail to print -800 and stay within -600 threshold.
3) The TICK extreme outlier to the downside, tagging -800+, is right at/or near major reference VWAP reversal point.
4) The reversal follow through to the upside is supported with increased volume and VB deltas.