After Hours Report:
An interesting day today as yesterday's entire rally got re-balanced. An elongated trend day has not been taken back in one fell-swoop since last December. This probably portends more downside and, at the very least, puts us out of the grinder up mindset.
I will note in the annotated charts that today was also a day where fades of tick extremes were profitable -- and clearly indicated that strong responsive sellers were in control.
Late Friday M period declines are nearly impossible to get, simply because the lead in gets you away from the desk and doing other things -- just because it's so dang slow. But the A period excess, extreme money flow readings, perfect price rejects on tick extremes, and the inability to penetrate value area high, were all clues to what transpired. That juicy visual destination is just too tasty to resist.
NYSE Volume: 3,308 Million
Globex Session Visualization Guess: Down
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7:30--
Structure: Inside range value area. Initial balance closes on it's lows and is still cratering. TICK structure, right from the get go, was signaling impending doom with a firm base below zero. So far not even a reading close to +500. C period lows now well into yesterday's A period excess tail and bouncing at S1. Is that it? We will need to see a tick reading +600/800 if we are even to think of a reversal here. Inter-market themes are aggressively negative with strong trends.
Visualization & Odds: The character of the market has definitively changed now. Today should have been a benign balanced type of day after yesterday's ramp higher.
Anything can happen now that yesterday's rally has been given back with confidence.
Hard to know for sure, but so far I'm leaning towards the fact that things could get really ugly today. A trend day down is not out of the question at all, but 8:00 and 9:00 reversal zones are coming up. 7:48 -- tick is starting to diverge here on a re-test of the lows but with the TICK MA so weak at -500, it might not matter. New lows here with fresh tick lows too. The obvious destination is at least yesterday's A period lows at 1364. For it to come this far and not test yesterday's range lows would be surprising to me.
8:07 -- Well, mercy me, 1368.25 appears to be it as tick has finally printed a +600. A failure to quickly push lower, and test yesterday's range lows, will have me thinking that this market will re-trace to halfway back. But it's going to be another 45 minutes before we can make our call.
Tactics -- Don't rush in. Let this play out.
Range/ATR 5min:
NYSE Vol:960,906k @ 7:45
Sediment A/D&Up/Down Vol:-1722 / -478k
Sector Skew:14 up / 158 down
Most Up/Down Sectors:
Tobacco +.46%, Utilities many variants +.36%
Coal +3% (total u turn here), Banks, oil equipment -2.5%
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Grade: A -- That's exactly what happened -- it retraced to halfway back. And even though it made you wait, yesterday's range lows was the final destination.
Even though I noted the tick divergence at the 8:00 morning lows, I hated to take a long trade there with yesterday's range lows so close. So, even though I missed the reversal, I'm ok with it as 8 out of 10 times, I'll get stopped out buying just above a visual reference.
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9:00--
Structure: 8:00 reversal did take price back to halfway back and vwap before a clean reversal. With the A period excess tail above, there is a chance that the lows are not in yet, however, I think it's high odds that they are. Especially because yesterday's lows were not able to be tested.
Visualization & Odds: High odds that lows of the day are in. And that it's balanced chop in the lower part of the profile from here on out. I don't think that the highs will be tested.
Tactics: With Friday volume tapering off quick, I'll consider buying range lows. But other than that, buying in the middle of this B formation is not enticing at all.
Range/ATR 5min:12 points
NYSE Vol:1, 694 9:30
Sediment A/D&Up/Down Vol: -1448/ -729
Sector Skew:35 up / 137 down
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Grade: A. You get an A even though the lows were taken out end of day. It would have been nice to have noted the negative cumulative delta build. And the tick reversals from the extreme readings.
And had divined a late session breakout to the destination.
But at least you realized to just stand aside and not get chopped up. And you correctly saw the upside as futile. And this shows how well you are intuiting structure, even before it unfolds.
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10:15 --
Structure: Interesting juncture here at vwap base. This is a potentially bullish pattern and we might get a push higher -- although probably not much. Tick moving average now above zero and tick is in solid uptrend. Any up move is going to have a hard time with value area high.
Still mostly think that this is a solid B formation type of day.
Visualization & Odds: Ultra-high odds I think of a B formation day. If there is to be any possible range extension, it will be lower probably.
Tactics: Nothing to do at mid-range here.
11:00 -- Sure enough, a cute look above vwap to value area high and reversal right at the programmed 11:00.
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Grade: A. A look above vwap to value area high and reversal. You called it exactly right, and I wish that I'd have taken that short in hindsight, given the tick structure. I was very outspoken about lower -- not higher. You were certain that if any range extension, it would be lower. Lots of downside odds. Remember the A period excess? The inability to get above VAH?
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