Narrative, Visualization Exercise and After-Hours Report:

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NYSE Volume: 3,264,556,000
Globex Session Visualization Guess: 1st of the month come Monday. With the market in balance, I think that a gap up is the high odds bet come Monday.
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7:30-- Welcome to Friday! Moderate gap up of about six points and an open drive, choppy drive lower. Today's value is slightly above the midpoint of the last 10 days range. The initial balance low is 1 tick shy of filling the opening gap. The NASDAQ and the Russell are both to diverged lower, having fill their gaps and then some.

Probably what is paramount to understand now that the market is in a 10 day range. Looking at the the daily chart of the candlesticks really doesn't help the eye catch that the market is now firmly in a range.

The obvious trade idea right now is to buy the gap fill at 1398. But as I type this report just after the initial balance, a flurry of sell orders are breaching the gap level. The weakness of the other indexes, and the A period downward excess was a tell that this might occur.

If price continues to explore downward, the obvious reference would be yesterday's value area high at 1393, and halfway back zone. Then the prior day POC at 1389 and then the prior day range lows at 1386.

Intermarket teams are rather neutral with no significant trends or spikes.
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Grade C: I wish that you had framed your analysis in terms of SOME tactical strategies. When you were writing about the gap being filled, and then the stops run, it would have been nice for you to acknowledge this as a significant reference area and evaluate if it would be a high odds long trade or not.
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7:44 -- Small buy response at ES daily pivot/and peak below overnight lows. This could be the destination. Low of day so far is 1395.75. 2 points below gap fill reference and just a peak below overnight session lows. This has "stop gun" written all over it. So we monitor this reversal as a potential low of the day move. This is a "no change" zone, meaning that a move to this area is high odds to be just an inventory re-balance. All of the other indexes are above the prior day lows as well.

If the excess lows of the day here hold, I visualize a balance day and a possible upside trend. Lows of the day, this time of day in a no change zone, can be very positive for upside movement. If the current lows don't hold, and a significant additional move down occurs, then we re-evaluate. But thus far I'm not seeing any indication, other than the significantly negative money flows, that this morning move down was anything other than a rebalancing of the long overnight inventory.

Range/ATR 5min:7 points / 2.14
NYSE Vol:708k
Sediment A/D&Up/Down Vol:+280 / +7k -- Neutral extreme
Sector Skew:98up / 74 down
Most Up/Down Sectors: tobbaco +1.5%, Healthcare Providers +1.18%, Reits +1.06%
tires -2.46%, Coal +2.41%, Airlines -2.33%
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Grade:B -- One of the downsides of spending so much cognitive effort putting together a journal is that you can miss trades as a result. Today, I missed pulling the trigger at the overnight lows. Just too caught up in my analysis. And not BELIEVING my analysis, and REALIZING that the lows were a great, low odds long side trade, with 3 different references to support it in a "no change zone". Analysis paralysis as they say. But still I was able to internalize movement and structure as the lows of the day were put in. When multiple reference points lineup together reversals can be powerful. I was a great experience to be fully focused and engaged as the reversal hit.

Weird how the mind is so blinded by confirmation bias. Being the innovator at a excess low is not easy! Even in a trend up daily.
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9:00-- From the lows it was a straight shot bounce up to value area high. Approximately a 1/2 hour long base here at the value area highs. NASDAQ and Russell still diverged to the downside. Intermarket market teams still extremely neutral. It is Friday. I visualize two high odds scenarios. Either this market prints a low volatility check mark grinder higher, with limited upside. Or its chips chops around lower within the value area for the rest of the day as volume tapers off.

Tactical: Straight shot move from the lows and there are two options from here on out. Having missed buying the C period lows, I can buy the consolidation here at value area high in anticipation of continued range extension above range highs and a check mark grinder higher. The upside to this trade is that there are pretty good odds that at least a look above the initial balance highs will occur. The downside is that it is a Friday and volume will continue to decrease along with volatility. Further negatives are that the NASDAQ and Russell are still diverged and far from their highs. Other negatives are that sentiment is neutral extreme and money flows are negative. So although it may continue to go up, I'd say that the upside is probably very limited. And this market could easily probe down to the lows of the value area. I think that the risk to reward sucks.

Alternatively, I could sell this consolidation area at value area high but at the very most I see the risk to reward at 1:1. The upside of selling here is that the tick moving average is moving down dramatically. But I'm just not excited about a counter trend short after such a strong move off the C period lows with excess. I think that any move down from highs here will quickly run into the point of control, halfway back, or value area low, and bounce. Excess longs have already been re-balanced.

My strategy will be to wait and see if there is a probe of the value area low or range lows, and at that time consider a long trade. I'd do not wish to take any continuation trades today. Just a reversal at or near range lows.

The bottom line is that I see little risk to reward for any trades from here on out. If for some reason volume and does not continue to decline and or a significant pullback to value area low or even range lows or occur, then maybe a trade will present itself.

Range/ATR 5min:10 points / 1.23
NYSE Vol:1,435,000
Sediment A/D&Up/Down Vol: +942 / +340k
Sector Skew:135 up / 39 down
Most Up/Down Sectors:
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Grade:A I liked your analysis. You thought through the scenarios, and you visualized the rest of the day well.
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10:00 -- BIG spike down in bonds. BIG spike up in AUD. Indexes pushing higher but not yet above range. I'm surprised at this as would normally be considering a long trade here. Well, it's Friday, a great day for dislocations to flourish and for a market to stay dead.

10:20 -- Fresh spikes in bonds and AUD. Indexes finally starting to respond a little. USD not moving.

10:30-- Have to leave office for today. Looks like the checkmark is in control unless one of these wacky inter-market theme spikes throws a big hairball into the scenario.

Range/ATR 5min:
NYSE Vol:1,890,000
Sediment A/D&Up/Down Vol: +890 / +427
Sector Skew:
Most Up/Down Sectors:
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Grade:A There really was not much movement. Glad that I left the desk.

Narrative, Visualization Exercise and After-Hours Report:

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Afterhours Report: I added into my post today tactical trade entry analysis. As it turned out, the two trades framed today both worked perfectly. I'm also finding that the increased workload of this journal is not a negative. It increasingly assists my focus and engagement with the market. Someone who has watched the market on an intra-day bases, all day long, will probably have great respect for how hard focus can be to achieve. Especially as an independent trader.

NYSE volume 3,655M
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7:30--The initial balance is closing on its lows. And trying to extend lower. Sectors are extremely skewed with only three positive. But the leading negative sector is only down -2.76%. The move down from the open has been low confidence and choppy. The overnight session closed with a spike down and only closed a few ticks below yesterday's range lows. Emotional short inventory could get caught short easily. Value opened at the lower end of yesterday's value. The market is down now three days in a row. It's not a robust and high confidence down move whatsoever -- for any of the down days. That's fine when the market's going up but it's so suspect as the market is going down, let alone during a confirmed daily super grinder higher.

Range/ATR 5min:6 points/ 2.46
NYSE Vol:765
Sediment A/D&Up/Down Vol: (-1765)/ (326)
Sector Skew: 4 up / 168 down
Most Up/Down Sectors: Healthcare +1.24%, Biotech .24%
Home Construction -2.75%, Insurance Life -2.06%, Hotels -1.95%
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Grade A: You were able objectively process evidence as it unfolded. I liked that you noticed, even with almost all of the sectors being red on the day, the leading loser was only down under 3%. And how the move down from the open was choppy and low confidence. It was also good you noted how the prior down days were choppy and low confidence too. The whole post was relevant and spot on in ferreting out the fact that this market was going to go short in the hole later in the day. You were not finding any structural evidence at all to make a strong case for further downside. You respected the possibility, but were going to let the market prove your upside bias wrong before changing bias.
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7:37 -- Still continuing lower and this market is right on the daily 20 day moving average. Any failure to continue down here will have me on reversal watch. The market has been printing a lot of tick -800s and the sellers are not getting very much for their efforts. My best structural guess is that this market does not trend down today. And given the low confidence lead in to the daily 20 day moving average, I highly suspect a buy response too. Retail and Biotechs are the two sectors that are diverging to the upside. Nasdaq and Russell and the XLF are in sync with ES. Muted inter-market themes with a negative bias.
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Grade A:I liked in this post that you added even more structural evidence that contributed to the upside bias. You were focused enough to look at the daily chart and realize that the 20 day moving average was lurking below.

And important too, you noticed the plethora of negative tick -800 readings that were not able to take the the market down much at all. This structural queue became even more pronounced as the day went on.
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7:45 -- If the buy response does take hold here at 1386.50, and rotate higher, I will probably buy near range highs for a high odds move into the gap fill. Or if the market bounces and makes new minor lows in a transitional structure, that will be an interesting buy point to consider as well. If the 20 day completely fails, then tactically, I'll have to re-adjust my current long bias. No excess tail at lows to note.
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Grade A: This type of post is new to my journal. It specifically addresses framing tactical entry points. Both of the tactical entries formulated today worked perfectly. The transitional low at 9:00 long. And the base at range highs in the afternoon long into gap fill.
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8:15 - Market is at POC and halfway back now. TICK is in strong up trend with no readings above +600. With emotional overnight shorts, however, I think that the low of day is in. If price continues to base above the value area low, then I think odds are good for continued rotation higher. Fly in the ointment is the XLF which is stubbornly refusing to bounce from base at lows. Nasdaq retests lows to the tick and bounces -- so far. The over-arching consideration here, however, is the daily 20 moving average offering support here. Plus with a reversal before 8:00, this always increases the chance of a bullish check mark pattern.

8:30 -- New lows XLF and nazdaq. ES at VAL. Stiff VWAP reversal has market near session lows now. Will be on lookout for transitional lows to buy, if other indexes and XLF can gain some traction. But so far the " flies in the ointment" that I noted were very valid considerations. So now we see if a transitional bottom can take hold here or not.
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Grade A: You were keenly aware that there were some issues with the long side. I like how you noticed that there were still aggressive downside sellers in play. You were not going to just jump in arbitrarily but created a tactical structure upon which you were going to base your trade entry. In this case you were looking for a transitional low. And you're also not just lost in the 5 minute chart looking at price. Your vision was constantly attuned to what was happening on the daily chart.
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9:00-- A new minor low and transitional low is printing right here at 9:00. This is the entry that we were waiting for to the long side. Even though the XLF and NASDAQ are diverged, this is the zone and TIME OF DAY that we want to put on a long side trade. Should the reversal take hold, the first task will be to break above the vwap, then the value area high, and then tackle range highs. This trade is higher risk because of strongly skewed sectors and sediment is a very strong -1800. And the ES is the lone ranger, not printing new significant lows like the other indexes. I like the emotional overnight short inventory too. But this intraday trade is based on the daily chart.

If the trade does stop out, I will not aggressively re-enter. Drip down days are always possible -- and just when everything looks tired and diverged, it moves down another leg. And then the reversal hits the following day!

I Visualize that if the 9:00 lows at 1386.25 hold them there's a good chance that this market closes on its highs. If these 9:00 lows are taken out, by more than a minor new low, than I visualize a slow grinder down day. But with the short overnight inventory and daily support, I think it's higher odds that responsive buyers step in here.

Range/ATR 5min: 8 points /
NYSE Vol:- 1,604
Sediment A/D&Up/Down Vol: -1845 / -664
Sector Skew: 5 up / 167 down
Most Up/Down Sectors: top ten declining sectors down a collective 2.5%. Still nothing really puking.
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Grade A: You called it perfectly. I really liked noting the overnight inventory nuance. Panic spike moves in the overnight are emotional. And emotional, panicky shorts were primed to be squeezed.
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10:30-- After a slight rejection of the value area high, price is basing right at the vwap and the 5 minute chart has a bowl shaped pattern to it. I'm not really into generic technical patterns, but this type of pattern is definitely more bullish than bearish, given the overall context of the day. I'm still visualizing a move higher but the simple fact is, it's taking a little bit too long to materialize and that is making you wonder what's going to happen when the 11:00 programs hit. I think that 11:00 is going to usher in movement up/down that I'm going to respect. I will quickly exit my position if lows are tested with vigor. Inter market themes are neutral mixed. There's not really much left for me to analyze here. We just have to wait and see what the program's want to at 11:00 o'clock.

One thing that I'm sure of is that this market has a total of 14 -800 hits on the tick. And all of the sell programs have not been rewarded for their efforts -- at least not yet.
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Grade A: Noticing the strong tick inefficiencies was key.

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11:00 -- Like clockwork the programs came in and so far they're bullish. We're currently peaking above the value area high with a tick +1000 high of day reading. We now need follow-through on this tick high reading. Or else it could just be another value area high reversal zone. As long as the vwap holds as support, I would strongly expect further short covering, possibly rapid movement up. OK, here comes the move, let's see if we were correct about visualizing a rapid ascent from here. A period highs will be strong resistance.
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Grade A: You were spot on in visualizing rapid movement up, once it got going.
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11:20 -- Here come those A period range highs. Now it's just a question if there are really any significant amount of trapped shorts or if we will hit this level and reverse. TICK bodies are holding well here and increase odds of continuation higher.

Range/ATR 5min:
NYSE Vol: 2,149,000
Sediment A/D&Up/Down Vol:(-1600)uptrending / -858k downtrending
Sector Skew:8 up / 165
Cumulative Delta: +17k
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Grade A: Here is annotated chart, showing the pre-breakout TICK distribution.

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Narrative, Visualization Exercise and After-Hours Report:

7:30 -- The initial balance value is slightly lower than yesterday's value area. And B period closed near lows and just below the overnight session. Sentiment is neutral negative, the dollar is slightly up, and bonds are trending higher after the gap down. The Australian dollar is in a downtrend. Leading gaining sector is the airlines up 3%. In the leading losing sector is coal down 4%, followed by metals at -3%.

7:55 -- The action hit soon after the initial balance closed. C period has been pretty much an open drive move lower to the lows of two days ago at 1400. There is a big gap below 1400 down to approximately 1394. We need to evaluate now if 1400 is the destination, or if the destination is gap fill at 1394. So far this move down for the session has been low confidence and neutral sentiment and a divergence in the bonds. Probably 70% chance that the lows of the day have printed at 1400. And a 30% chance that the gap fill in as the destination.
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Grade D -- You failed to factor the overnight inventory into your analysis like yesterday. Your analysis was mechanical and shallow. Yesterday, the fact that there was an excess look above and fail during the overnight session made you intuit possible downside action. The same pattern printed in last night's overnight session. And today's initial balance didn't even come close to testing overnight highs --- just like yesterday. But today you just overlooked this whole structural component and your analysis was dead wrong.
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Range/ATR 5min:5 points / 2.00
NYSE Vol:885k
Sediment A/D&Up/Down Vol:-900 / -200k
Sector Skew:33 up / 140 down
Most Up/Down Sectors: Airlines +3.39%, HOme construction +1.12%, Marine Trans +.93%
Coal -3.75%, Non Ferrous Metals -3.09%, Platium & Industrial Metals -3.60%

9:00-- It looked like they were not going to pull it off, but selling accelerated within the gap and gap fill printed just before 9:00. Low of the day is 1392.75 and there is now 3 point excess tail just past gap fill zone. Textbook move to liquidity zone, stop run and bounce. The odds are now that the lows of the day are in. If price does continue to grind down, then it could be a trend move for the entire day. The key will be if this excess tail holds are not.

Range/ATR 5min:
NYSE Vol:1,725
Sediment A/D&Up/Down Vol:-1300. -580k
Sector Skew:11 up / 161 down
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Grade B: You correctly saw that the strong visual area acted as support and shifted the odds greatly that the LOD was in.
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10:30-- So far the excess tail has held and the lows of the day are still 1392.75. A base at lows is now a hour and 1/2 old and considered a B formation. Since this base is occurring at such a visual reference, I'm suspect of further downside action, although a fresh break to new lows would not be surprising today as the market is so extended on the daily. There are plenty of potentially trapped longs. Intermarket themes are very neutral with the exception of the VIX which is strongly trending higher today. And that is bearish.

10:37 -- A break to new lows is appearing to be imminent. We need to watch for volume on the break and a failure of the break could lead to short covering back to halfway back. A successful break targets the 1390 area. A failure to look down here at all would probably seal the deal for a B formation structure rest of the day.

My visualization is 70% chance that the lows of the day are in. And 30% chance that the market looks down below the low of the day already in place. If new lows are going to be had the Sellers will probably need to do it by 11:00.
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Grade A: You called it correctly and were focused.
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11:05 -- A sell program just hit, and so far no luck getting price down past lows. TICK moving average has been rising since the momentum low at low of day print and is currently above zero -- never a great sign for continuation down. XlF is diverged and none of the other indexes are printing new lows yet. Here comes another sell program and market is one tick off lows. The dow and the NASDAQ have printed new lows. The XLF is still relatively far from lows. Here comes another attempt. Right at lows now and the stops should at least be taken out. Stops are taken but that's it. Now we monitor for continuation and or rejection. And so far it's just sitting. Bonds spike higher and new ES lows again, yet ONLY 3 TICKS of new lows by the sellers and a true new minor low. Probably that's it to the downside here. Unless a powerhouse sell program comes in. Price could easily squeeze higher now up to 1400. If it keeps grinding lower, then sellers have beaten the odds.


12:45 -- Visualization complete. Here is 1400 and halfway back, just like we predicted. The power of minor lows at visual references. Today was textbook.
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Grade A. Very nice landscape analysis. I especially liked the TICK tell as that moving average was in a strong trend up.
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Range/ATR 5min:16 points / 1.32
NYSE Vol:2,160
Sediment A/D&Up/Down Vol:,-1411 /-908k
Sector Skew:10 up / 162 down

Narrative, Visualization Exercise and After-Hours Report:

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After hours report: My balanced day visualization got crushed as there was a late day liquidation break. But there were a host of indications that shifted the odds to this move printing today. Overall, a PERFECT day for mid-session range extreme entries, and the astute trader didn't mess with last hour range fades.

Trend up in VIX, bonds and trend down in some key financial stocks and energy were big tells. That, and the overnight session look above and fail.

NYSE end of day volume: 3,319,000
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7:30 -- A very tight range initial balance with the exact lows of the day at the base of yesterday's late day spike. Range so far is 3 points. Sentiment neutral extreme. The NASDAQ showing relative performance, and mostly due to apple being up over 1%. Bonds are again trending higher and the S&P 500 sectors are decidedly mixed. Even though the market's not moving, value is being accepted above yesterday's value area. As long as this reference continues to hold, odds are for an upward bias. Although trading today is below the overnight highs, and that could be a factor that could lead to some weakness today.

The bottom line is we wait and see if any directional edge appears.

Range/ATR 5min:3 points / 1.34
NYSE Vol:745k
Sediment A/D&Up/Down Vol: +87 / -68k neutral extreme
Sector Skew: 112 Up / 68 Down
Most Up/Down Sectors: Home Construction +2.9%, Metals +1.43%, Building Material +.98%
Oil equip/services -1.17%, Airlines -96%
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Grade A: I like how I intuited the overnight inventory action as being negative. This was an intuitive feel that haunted me all day long. And it would have been not logical to jump hugely on the downside camp when the prior day spike reference was holding support so well.
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9:00-- The range is now a whopping four points. This feels like a summer Friday instead of a Tuesday. I'm seeing no evidence of selling, as the spike from yesterday's reference continues to offer support. A true hallmark lazy, bull market day today.

Range/ATR 5min:4 points / 1
NYSE Vol:1,398,000
Sediment A/D&Up/Down Vol:-60/ -41k Flat as you can get
Sector Skew:85 up / 87 down -- 50/50 for sure
Most Up/Down Sectors:Home construction +4.73%; Real Estate Developmental 1.11%
Oil Equipment -2%
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Grade A: True ultra-snooze action, indeed.
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10:30-- Nothing has changed since our last entry. The market is basing near lows and there is no volume, no pace -- no nothing.

I visualize a balanced day with 80% probability. And there's a 10% chance either up are down that in the range extends. I may have to give the downside a little bit more bias because we are well below the overnight highs. But in this grinder up market, and the structure of today, this is probably a moot point.

Range/ATR 5min:4 points / .86
NYSE Vol:1.965.000
Sediment A/D&Up/Down Vol:-168/-136k
Sector Skew:79 up / 93 down
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Grade A-: Actually, your take that the market was below the overnight highs was very astute. Even though you didn't handicap the move properly, I like how you intuited danger lurking.
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Narrative, Visualization Exercise and After-Hours Report:

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After-hours report: This was one of those days that looks so easy in hindsight. The midday action tightly oscillating around the vwap in a two point range and putting my mind to sleep. Hard to deal with. And even the afternoon breakout was really slow, lazy volume. But there was one thought that was going through my mind all day long: "if they don't take it down, they're going to take it up". And that's what happened.
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7:30 -- A gap up of about seven points tightly coiled and then broke higher to a HOD print of 1406.75. A slight pullback looks like it is headed for the vwap. Bonds are in a strong trend down and the Australian dollar is in a strong trend up: Positive for the market. Semiconductors are leading the sectors up and the homebuilding stocks are leading down along with regional banks. So again we have a fairly large gap up with little continuation: Mixed for the market. Additionally we are close to resistance on the daily chart of the high and made last week. Last week high of 1408 is probably the destination for today. If price stays above the vwap I visualize a slow grinder up today to the 1408 destination target. If price continues to base on or below the vwap for the next hour or so, without new highs, then I will anticipate a move down into the gap. A rule of thumb for big gaps, is that if they don't continue higher with confidence at the start of the day, the odds quickly shift to some sort of gap fill attempt. And so far we don't have that high confidence initial balance I need to hang my bullish hat on.

Range/ATR 5min:6 points / 1.21 / 7 point gap
NYSE Vol:818k
Sediment A/D&Up/Down Vol:1700 / 370k
Sector Skew:163 up / 9 down
Most Up/Down Sectors: Recreational Product 2.47, Hotel/Lodg Reit 2.10, Mortage Finance 2.05, Heavy Construction 1.89
Home Construction -1.14%, Coal -1.07%, Pipelines -.40%

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Grade B - I cannot give myself in A because I was wrong that the base below that vwap did not in fact did not produce a downside event. Still, all year long, for every big gap up,the base below the vwap produced some sort of movement into the gap. So, I was just really uncomfortable to go long, and I wasn't comfortable going short. It was just an iuncomfortable day and I;m glad that it is over with. But I was right that the destination was above.
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9:00-- A longstanding base here right at the vwap. This pattern has shifted the odds now to a downside test into the gap. One big mitigating factor, however, is the outperformance of the NASDAQ and Russell 2000. However the energy sector, materials, and home builders are aggressively being sold.

After a big gap up. and extended base near lows like today, the odds start to shift to the downside if the market is not unanimously signalling higher. My best guess is 30/60 up versus down from here. I think that it's low odds for it to just flatline from here on out for the rest of the day.

Range/ATR 5min: N/C / .71
NYSE Vol:1,387,000
Sediment A/D&Up/Down Vol:1528/ 628k
Sector Skew:161 up / 9 down
Most Up/Down Sectors:
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Grade B: I was ok with my analysis, but just wrong today. That upside visualization early on about the VERY VISUAL 1408's being tagged was the game play for today.
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10:30-- The market is dead. But it is creeping lower, if three points off the highs can be considered "creeping lower". Bonds have a strong recovery spike, which should be bearish for the market. As I'm writing this just after 10:30, a creep towards the highs is in gear. Odds have shifted now to just a tight balance day.

But with a 2 point range now for over three hours, It's really hard to visualize anything while fast asleep.
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Grade D: I just don't see how odds shifted to a tight balanced day. Especially when in your previous post, you mentioned how low odds it was for today to just flat line rest of day.
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11:15 -- Market is at highs now. So it looks like the 1408s are probably going to be tested. Or will it just a retreat from the highs? So far no volume is coming in of significance. I really hate to enter a trade either way here. Apple has been screaming to new highs so that fact alone really helps the upside. Bonds still climbing.

12:00 -- Stops just got run as price shot right to where the liquidity was -- at our 1408 destination. HOD now 1409 and a slight pullback. Still no major volume. So either that was it, or it just grinds higher last hour. It feels like a higher power wants it higher, though. I will not even entertain the idea of a short. And it's high risk for a down spike too since price is at the visible reference and only be able to minor high thus far. This is just a market that I want no part of.
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Grade A: My visualization that "a higher power wants it higher" was spot on. Late session short covering took out the visual high with force. If felt like short covering to me. So if they take this spike back tomorrow, it could get ugly.
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Range/ATR 5min:
NYSE Vol:1,916,000
Sediment A/D&Up/Down Vol:1400/790k
Sector Skew:no change
Most Up/Down Sectors: no change

Narrative, Visualization Exercise and After-Hours Report:

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After-Hours Report: Nothing to add after-hours. Overall a good analysis of a high odds check-mark pattern unfolding after the stop gun, and excess tail, left at yesterday's range lows.
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7:30 - The initial balance lows probed below yesterday's lows and formed an excess tail. Today's value is just slightly lower than yesterday's value area. The structure so far is pointing towards a typical bull market day in which "in nothing has changed" as a unsuccessful probe lower below the prior day failed with an excess tail. Sediment is neutral extreme and the inner market themes are mixed. I visualize a balanced day with an upside trend. I strongly feel that the A period highs are going to be taken out and then high odds slow grind with an upside bias. A check-mark type of day. It's a little funny that all of yesterday's losing sectors are two days most winning sectors. It is Friday and it's going to be a slow one.

Range/ATR 5min:8.5 points/1.71
NYSE Vol:870k
Sediment A/D&Up/Down Vol:-150/-125k
Sector Skew:61 up / 112 down
Most Up/Down Sectors: Platium +2.69, coal 2.11, gold+2%, mining, oil, steel +1.5%
Footware -3.25, homebuilders -2.28, clothing and accessories -2.13
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Grade B -- Something is still a little off with my analysis. I visualized a balanced day with an upside trend. With an initial balance low that stop gunned the prior day's balanced and left an excess tail? In a daily super-grinder up?

Then the next sentence is "I strongly feel that the A period highs are going to be taken out and then high odds slow grind with an upside bias" You have some conviction here. But didn't you just predict a balance day? A "high odds" grind higher is not a balanced day.

Something is wrong with me here, and I'm struggling how to get my brain working properly. At least you were overall correct with your structural visualization.
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9:00-- Just as we visualized, price has now explored over the initial balance highs. I don't expect it to run away to the upside and I still visualize a slow creeper grinder up. This market has all the earmarks of printing a textbook bull market checkmark pattern. But there is one qualifier, that could throw a monkey wrench into my of visualization. The market is a technically in a little downtrend right now on the daily chart and we're right yesterdays range highs. If we do fail at this level then we'd have to consider the downside move. But I do think that that any downside is low odds at this point.

Range/ATR 5min: 11 points/1.07
NYSE Vol:1,375,000
Sediment A/D&Up/Down Vol: 689/66k
Sector Skew:112 up/58 down
Most Up/Down Sectors: plat precious metals 3.3, gold mining 2.69, mining 2.25, alumium 1.97, coal 1.81
footware - 2.48, clothing -1.47, personal goods, -1%
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Grade A-: Great job predicting the check-mark. Although I'm not really excited about your comment about the market "being in a downtrend". Yeah, It's in a MINOR correction on the daily, and if those days printed some REAL downside juice, then maybe it's wise to be on alert for responsive sellers. If the market had breached a moving average or something on the daily, then maybe. Today was not in that situation.
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10:30--Price is being accepted above the prior day range. So far so good for our checkmark visualization. But it's Friday, so volume will continue to taper off and I expect a limited upside from here. I definitely don't expect a gap fill and probably the high end destination guess is the overnight highs at 1395.25. I visualize that the market closes at or near this current level of 1391 or between up to 1395.

Range/ATR 5min:13 points / .93
NYSE Vol:1,962,434
Sediment A/D&Up/Down Vol: 968/144k
Sector Skew:119 up / 54 down
Most Up/Down Sectors: No change
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Grade A - The close was right at the high end of my prediction. Volume and pace just didn't tell me that the overnight highs would be taken out. And you totally ditched your downside thoughts.
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Narrative, Visualization Exercise and After-Hours Report:

Narrative, Visualization Exercise and After-Hours Report:

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After hours report: It is pretty funny to note my cognitive dissidence this morning while doing my post market grading. It was a tricky market today with a lot of cross currents. I'm still surprised that they were able to push it down to do a retest of the range lows. Although there are two excess tails at the lows now, I'm wondering if this is a change of character for the market and that there might be more downside ahead.
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7:30 -- It's been a long while since we've had an opening "with change". A true gap down of about 10 points and a tight range initial balance.(So, the rally in bonds all day yesterday was saying something it appears?) Some news hit the market last night and about midway through the overnight session, value started to move lower and the session closed on its lows. With shorts 100% short, and a tight initial balance that is not continuing to go down, I am on short in the hole watch. Additionally, there are significant upside index divergences with technology and the NASDAQ. It is hard for me to visualize structure right now as I need more time for things to unfold. I have a downside bias but so far it is not being confirmed. And responsive buyers have been viciously effective for eternity now. But one of these days the responsive buyers are going to fail and multiple time frames are going to liquidate. Will it be today?

Range/ATR 5min: 4 points / 2.48
NYSE Vol:777,991,000
Sediment A/D&Up/Down Vol:-1472/-289k
Sector Skew:12 up / 156 down
Most Up/Down Sectors:
internet serv +.44
platinum , coal, non-ferrous metal, steel, resources -3% -- top 10 losers all metals, oil, resources. The theme is clear.

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Grade D: Cognitive dissonance is such a wonderful thing. I go from being on short in the hole watch (an upside stance due to multiple reasons) to saying that I cannot formulate a visualization now (which I had just done), to stating that I have a downside bias. Then I even point out a couple more points against the downside bias. Geez, what a joke.

I cannot even believe that was me writing that.
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9:00-- The push down out of the initial balance was not confirmed by a few key sectors such as technology. Pace and tempo of the break down were suspect as well. And the market quickly got short in the hole right at 8:00. The reversal off lows so far is back to the point of control and halfway back. It looks like the downside is done. There is no downside continuation pattern to be had with such a strong reversal and an excess tail at lows. I need more information before I can visualize with any real bias. But I'll go ahead and make a guess that this market closes on its highs. The gap above is just a huge magnet and lack of follow-through to the downside, by default, has to have me thinking up.

Range/ATR 5min: 11 points / 3.29
NYSE Vol:1,598,000
Sediment A/D&Up/Down Vol:-1472/-289k
Sector Skew:16 up / 160 down
Most Up/Down Sectors:
internet serv +.44
platinum , coal, non-ferrous metal, steel, resources -3.78% -- top 10 losers all metals, oil, resources. The theme is clear.
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Grade B minus: once again here I am making lots of decent points about structure, and then writing that I don't have enough information to formulate a bias.

I'm pretty sure that today I was just afraid of being wrong. It was our first day of increased volatility and it probably just spooked me a little bit.

You did good to visualize a close at highs. Today's close was close to highs. Isn't it strange that two words spelled the same way can mean different things? No wonder it's hard to learn English : )
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10:30-- No new big developments since the last update. It has been basing at the upper end of the value area. And the case is growing even stronger for an upside attempt into the gap. Minus energy and material related sectors, there are just a lot of green sectors today, and up stocks. At this point I will be very surprised if there is not an upside push. Although sediment is still neutral and not able to spike higher. I visualize a 75% chance for a move up into the gap. If we do move up within the gap, the chances of actually filling the gap are 50%. If this market wants to base for the rest of the day then it can. There's a 35% chance that it can.

Range/ATR 5min: No change
NYSE Vol:2,300,000
Sediment A/D&Up/Down Vol:-1489/-590k
Sector Skew:19up/154 down -- ever so slight improvement
Most Up/Down Sectors:
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Grade B: The fact was that sentiment was stubbornly negative as I noted. And I also noted extreme weakness in the energy and material sectors. The market had a retest of the lows in mind and I'm still a little surprised that they were able to pull it off but there were a few clues ahead of time.
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Visualization Exercise and After-Hours Report:

Blogger hosed my entire day's report. Thanks google! But, there were no major anomalies today. I visualized balance, and that's what we got. Grade A. I noticed that the bonds were trending higher all day today and that was a nice component to increase odds for the late session fade of range highs.

Visualization Exercise and Report

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After-hours Report:
The most important structural queue for today's session was the A period look down and excess tail at a "no change" zone within the context of a daily super-grinder. With the overnight inventory 100% short it became clear early on that there was going to be no downside continuation due to the high odds of short covering. Today was one of the slowest creeper grind up days that I've ever seen.
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7:30 - Gap down of about 8 points. The overnight session was a steady grind down and closed almost on lows. Therefore, overnight inventory is 100% short. In our current super grinder up, any suspicious activity that does not confirm high confidence downside intent after the open, makes playing for further downside extremely dangerous. Especially with short term moving averages lurking as support on the daily.

At the close of initial balance, we have a low confidence balance with small A period excess tail -- a very low confidence structural formation for any sellers to hang their hat on -- probably for the rest of the session. It's not to say that this market can't move significantly down from here but, at this point, a move higher into the gap is the high odds play for now. So are false probes lower that get rejected. Sediment is moderate for such a decent sized gap down.

So, my visualization is for a meaningful gap fill attempt to at least halfway back of the overnight session level which would be just below the 1400 level. I think that the rest of the day structure will set its foundation within the next hour as we evaluate whether or not the gap can fill, and what the response will be at halfway back. If price can't put together a gap fill attempt, and starts to explore lower and base near the A period lows, than MAYBE the sellers have a shot at control today. But it's just not looking good for them at this point.

Range/ATR 5min:6 points/2.89
NYSE Vol: 8228
Sediment A/D&Up/Down Vol:-1500, -285k
Sector Skew: 161 down / 11 up
Most Up/Down Sectors:
Piplines +1.15%, clothing/apparal +.66% (mostly TIF earnings
Coal -3.66%, Steel -2.51%, Consume Elec -2.27%, Commercial Vehicle -2.19%
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Grade B: Overall, I saw structure well today. The only thing that I'd have liked to have fully internalized, and I only glanced over it, was how with 100% short inventory, and any lack of follow through will lead to short covering. I understood what 100% short inventory entails, I just was not explicit about it. And I should have pointed out that the excess tail was a utter and complete death knell to the shorts given the context in which it printed. I should have forgotten about talking about any downside.
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9:00-- Volatility is just dead. This poor market cannot muster anything greater than a 6 point range. The sellers must be happy that the gap could not even fill to halfway back before dying. The buyers must be happy that all the market could do was pullback and then reverse at value area low. As I'm writing this, just after 9:00, here comes another push back up to range highs. I'm going to wait a few more minutes before finishing this post to see if this market actually wants to move here. 9:15: Well, still low volatility and the small cap indexes are severely lagging. I still think there's a good shot that the 1400 level gets hit but as time goes on the odds are shifting for a 11:00 time frame move lower. The responsive buyers are just doing a really crappy job. We will wait through the doldrums and see what 10:30 or 11:00 will bring about. I think there's going to be a move either up or down from this balance zone before the end of the day. I guess, 40% chance up from this balance, 30% down from this balance, and 30% that it just balances. How is that for covering all bases?

Range/ATR 5min:6 points/=1.14
NYSE Vol: 1,360
Sediment A/D&Up/Down Vol:-1445/-471
Sector Skew:152 down 20up
Most Up/Down Sectors:
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Grade B: I think that upside should have been giving higher odds with the excess tail in place. But, yes, it was a weird day with a host of underlying weakness.
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10:30-- As unspectacular as it was up until this point, the highest odds scenario came to pass. A break above and test of 1400. It so interesting that my mind is so filled with clutter, yet I notice a strong tendency for the market to move towards the highest odds scenario that I visualize.

The question is "so now what?" 1400 was initially rejected but not substantially so, at least so far. The point of control is big at 1396, so it's going to take it a lot of volume to move price significantly away from it. And the look above to 1400 simply did not have a lot of volume.

I visualize the highest odds structure (70%) today as balance, to SLIGHT grind higher the rest of the day. I visualize a 10% chance for a significant move above the 1400 zone. And 20% for late day push lower to range lows. I just think there are too many positives to really push this market down. And there are just too many weak stocks and sectors for it meaningfully scream to the upside.

Range/ATR 5min: 8 points/.86
NYSE Vol:2,212
Sediment A/D&Up/Down Vol:-1168/445k
Sector Skew:31up/140 down
Most Up/Down Sectors:
Retail apparal +1.2%, Invest service 1.1%,Airlines 1.08%
Coal -3.87%, Expl&Production -2.51%, Platinum -2.5%, Comm Truck -2.33%
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Grade A: Great job! Even though today went up most all day, it really was a SLIGHT grind higher. The second half of the session smelled more of balance than trend.
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Visualization Exercise and Report

Market Visualization:
7:30 -- Balanced overnight inventory with the high of 1403, just above our 1400 reference level. Overnight then fell and opened near midrange. Initial balance now is within the overnight value area and largely within the prior sessions value area. Although value is unable to move above the 1400 level, it has also not gone down and therefore "nothing has changed". But I do think if we are unable to rally above the A period 1401 highs, and stay there, I visualize possible selling. Apple once again has hit the 600 level and was rejected, therefore, the NASDAQ has relative weakness so far. There are no sectors, either up or down, that are unusual. However four of the S&P sectors have a relative volume above two, which is unusual. And three out of four of them are red on the day. So we sit back and wait to see if this market can kick aside any of the potential downside divergences and grind its way above 1400. My best guess visualization is that the day is a balanced day with a slight upside trend.

ATR/Range:5 points, 1.5 pts. 5min
Sediment: +400/+109 up vol
NYSE Vol: 935 mil
Most Up/Down Sectors: metals +1.7%, Homebuilders -1.2
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Grade C: You did good seeing that there was no change and that the upside had high odds. That's all fine and dandy but this edge is useless when you are biased to the downside. You were clearly biased that 1400 was going to turn this market even though you had no BLATANT evidence to support this bias. You didn't even mention the dollar screaming lower.

You also missed the fact that overnight inventory was slightly short. There were no overnight longs to re-balance. I also remember noticing the divergent financials to the upside, but pointing out that information would have messed with your bias. Wouldn't it?
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9:00-- This journal once again has helped me to realize that it's quite common for high odds scenarios to unfold. In my first post, I spoke about potential selling if the 1400s were not be taken out. But why wouldn't they be taken out? Pretty much all of my analysis found no substantial red flags whatsoever -- and a lot of good reasons for it to go up. Like "no change" for example. I correctly visualized a upside move despite being biased against a successful 1400 breakout for some reason.

With the Euro screaming higher, and the dollar screaming lower. And many financials diverged to the upside, there was a lot of opportunity to be long the indexes before the successful break above 1400. As I write this post, trade is at 1404. With a fresh breakout in play and strong sector participation the double distribution should probably hold and I would expect a grind to balance higher for the rest of the day.

Range/ATR: 8 points/2.1 pts. 5min
Sediment: +1000/+355 up vol
NYSE Vol: 1662 mil
Most Up/Down Sectors:
metals +2.5%,casinos 2.4%,steel 2.3%
Homebuilders -1.2%, Costco -.83%
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Grade A: I'm happy with this assessment. Too bad that you were lost in bias to not take the trade.
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10:30-- Price is now at 1407 with a high of the day of 1408. It is a slow, low volatility, but high confidence grind higher. Double distribution days have low odds of failing so I'm going to stick with my visualization of a slow grind higher to balance from here on out. At some point this trend break out move will most likely go from trend to balance. Inter-market themes have kicked in with strong moves such as bonds with a expansion move down. The Euro is basing at its highs, the dollar is basing at its lows, and the VXX is still screaming lower and down over 6%.

ATR/Range: 12 points/.93
Most Up/Down Sectors:
metals +3.5%,casinos 3.4%,steel 2.7%
wireless communications -.95%, Costco -.50%
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Grade A: This analysis is clearly a result of accumulated knowledge. Double distribution breakouts upwards, in the morning, can trend for a while but usually end in some sort of balance.
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After-hours:
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After-hours Report: Key for today are the dynamics in play prior to the morning double distribution breakout occurring. During the first 2 hours of the session, it was clear that the upside case had a lot of strong information supporting it. And the downside case had a few divergences here and there but nothing to supersede the upside high odds probably in the midst of a super grinder higher.

The big take away for today, and this is not new to my brain, is that IF the super grinder up is going to be jeopardized with a big sell day, there are going to be BLATANT and very obvious structural cues. Which of course there were not any today.

Here are the main themes in play today that I believe were plainly advertising that the upside move was on its way. Most of them I have already noted, but as they say: review, review, review.

1) The initial balance based within the overnight value area, which was unchanged from the prior session's value area. "Nothing has changed" Is something that I've been saying a lot and this is a perfect instance of it being crystal clear. Value was being accepted and there were no indications whatsoever that the downside was at all in play. Therefore, in a super grinder up, default odds are that value is going to probe higher.

2)The XLF and a number of financial stocks were leading the way higher and significantly diverging to the upside vs. the indexes. This fact alone is not enough to ensure an upside breakout, but it's practically a slam dunk fact that the downside has little or no chance.

3) Leading upside sectors were stronger than the leading losing sectors were weak.

4) Inter-market themes: the dollar was plunging and the Euro was searching higher and the bonds were moving down. All while the indexes based near highs.
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Trains Are A Rolling

Spike Accepted...