What I liked about today was that it was a near perfect example of structural concepts acting just as they should. A period elongated excess tail = high-odds move to upside -- especially following an inside range day. TICK distribution was textbook, so was price action, for the trend day. There will be days that go up like this without textbook structure. But it's very low odds that a day will fail with structure that printed today.
NYSE Volume: 3,403 million
Globex Session Visualization Guess: Balanced to slightly down.
*************
7:30--
Structure: Value is slightly higher than yesterday. The initial balance value area low is right at the top of yesterday's value area high. The initial balance highs looked above the overnight inventory highs and closed at the overnight highs (Now that is a wordy mouth full!). A period was an open drive move above the overnight highs. There is an 6 point A period excess tail.
Sediment is neutral and intermarket themes are mixed with the bonds flat and the dollar down.
Visualization & Odds: Today is a high probability candidate to be a typical low volatility bull market grinder up type of day. Yesterday's inside range day adds upside fuel.
There is that big A period excess tail!
Tactics: Look to buy low volume pullbacks or coils near range highs. Forget short trades.
Range/ATR 5min: 9 points
NYSE Vol:1,061,000 at 8:00
Sediment A/D&Up/Down Vol:+1200/+270k
Sector Skew:152/up - 22 down
Most Up/Down Sectors:
coal +4%, industrial metal, 3.58%, steel 3.35%, airlines +3% basic resources 3.12%
industrial supplies -.71%, footwear -.50%, tobacco -.35%
*************
Grade: A -- You called our structure well and your tactics, if implemented well, worked like clockwork as the market had no real pullbacks at all today. One thing that I need to add to tactics are "tick tactics". Today was a day where the tick moving average was CLEARLY above zero. And each minor push to lows was a profitable trade if going long on tick -800 readings.
*************
9:00--
Structure: C period move above overnight highs to 1379. E and F period have just been basing.
An argument could be made that the indexes have by and large topped out today. If for no other reason than the NASDAQ being divergent and weak.
Visualization & Odds: I don't see my visualization changing much for the last report. We can probably just expect a low volatility trend grinder higher. I think the probability for deep pullback is low. But it wouldn't be surprising if that VWAP gets tested.
Of note, the point of control is migrating firmly higher today with price and it is only 1 point from the highs. As long as the XLF stays divergent and strong, it's nothing but a green light higher for the rest of the day. I don't see why a seller would enter for any reason to fight the trend at this point.
Tactics: Sitting on my hands as I missed the trade of the day this morning.
Range/ATR 5min: 15 points
NYSE Vol:1,606
Sediment A/D&Up/Down Vol:
Sector Skew:163 up / 9 down
Most Up/Down Sectors: coal 5%
*************
Grade:B -- I didn't like how you disengaged with the market as the low volatility grind went on for hours. I think next time a day like this prints, you'll be more on top of it. The TICK distribution today was amazingly transparent when combined with price action. Value and POC moving higher all day long.
*************
10:30--
Structure: The day has evolved into a near perfect trend day. Today's high of day is 1383, which is almost exactly the high from four days ago. Above this level there is a gap fill up to 1390. I would not expect a grind to that level but it looks like they want take price into the gap. 1383 would be a convenient visual reversal zone, but so far there is just no sign of any sellers. All of the tick bodies are firmly at or above zero. Sentiment has been in a strong uptrend all day. Bonds have been spiking higher for about the last 15 minutes. That, and a weak Apple Computer, are the ONLY two red flags that I see in this market.
Visualization & Odds: It will become apparent soon, probably by 11:00, if any sellers are going to come into the market. If the 1383s are taken out I think the high of the day will be in the neighborhood of 1386. If the highs of the day happen to be in at 1383, I would still expect to close above at least halfway back.
Either way it is a high odds positive ending to a positive day.
Tactics:
11:00 -- Right on cute at 11:00 a couple of sell programs hit. With visual resistence right here, here is the sellers chance if they are going to take it. Looks like it was just a token push down. Back to the grind up...
Range/ATR 5min:18 points
NYSE Vol:2,079,000
Sediment A/D&Up/Down Vol:+1800, +967k
Sector Skew:166 up / 6 down.
*************
Grade:B -- Well as disengaged as you were, you get the gold star for visualizing the close to the tick. Not bad. Where were the tactics? I know where they were. You were avoiding them -- and the market. Just frame things in terms of odds and it's not so scary.
Seriously, if you followed your own analysis that "if no sellers come in at 11:00 at this visual reference then it's going to 1386", you'd have had a nice trade on your hands.
Remember that.
You had a crappy day yesterday, but most of the time, you call high odds moves with consistency.
*************
No comments:
Post a Comment