Nice Two-Way Action

The two-way auction process was an action again today with an elevator ride up in an elevator ride down, then an elevator ride back up.

The sellers beat down the morning buying quite substantially but then all they could do was short cover back to VWAP.

But the small caps are still weak. The TF never did bounce with the ES and closed near lows and down over 1%. The daily chart is a critical juncture as well.

This action feels distributive with volume way up today. 

The trade of the day was the 11 o'clock minor low of the morning session, and then the subsequent double bottom. That was simply a spectacular reversal trade from balanced structure with volatility up.

The 8:30 reversal at highs is an honorable mention, with tick blatantly diverging hard, and the morning push-up was simply too steep.

Washing -- The Art and science of the Two Way Auction Process!

Fairly decent washer machine overnight session down but when the regular session opened price was in a minor low zone of the daily range lows. And this triggered a nifty by response higher as the two-way auction process is really showed its hand.

No superduper trades of the day to feature today. Although there is a pretty nifty VWAP reversal but you had to take quick points on it.

It is obvious that a daily minor low is bullish. But I'm not going to jump on the buyers bandwagon and make a call for a high odds reversal higher tomorrow. It is the expected response for sure. But the session felt like short covering today, and I suspect that there is also a high chance of responsive washing machine move back lower.

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Washing Machine: Again

You just have to love bi-polar markets as they mess with everyone : )

I have no clue what comes Monday.

Highest odds, I guess, is washing machine red bar lower : )

Trade of the day was the 11:00 B/O, but the hardest part of it was being at the desk on a Friday!

Washing Machine!

Hello washing machine!

I'll let the slides to the talking tonight.

No edge into predicting tomorrow's session.  Balance, move lower, or washing machine action higher!

Will start off looking at some other asset classes monthly charts.

Hello Reversal

Today was a near perfect trading day.

With the backdrop of our analysis of the last 2 days, calling out highly suspect selling action -- and that a buy response was in the cards.

And when the 1st hour looked down and printed a minor low of yesterday's session, that was the high odds trade of the day to go long. PERFECT!

And ride that baby for some points as the shorts were squeezed with heavy short inventory to re-balance.

2nd trade of the day was to buy the consolidation near highs. Trades like this can be very high odds with multiple days of inventory caught short.

And the move out of the base did not even stop at yesterday's range highs. It just kept grinding.

So we have to imagine now that the grind is on again.

The natural reference points for tomorrow will be the 2000 zone and gap fill.

The higher time frame buyers just refuse to back down!

                             

Low Confidence Sellers Today

Well, the sellers managed to pull off a grinder lower today.

A down day of very clear low confidence structure.

Right into the teeth of major daily moving averages.

We are still expecting a buy response, but if the game has changed so be it.

But if I were seller I'd be really nervous right now as my cohorts are not showing their hand particularly well.

And the bull-market programs are trained well to pounce in pullback zones just like this.

Dud Red

We got somewhat of a big Red Day as our high-odds assessment of Friday's session indicated.

But I am officially disappointed that a mechanical 9 o'clock low triggered balance action for the rest of the session. With only one small minor low attempt post 11 o'clock.

This market should have printed a 2nd symmetrical leg lower.

By my eye sellers are in trouble here and I expect to buy response tomorrow.

As in this bull market any blatant structural weakness in the sellers agenda gets bought.

If sellers kick in again, then fine.  We will roll with them too.  They are way overdue to continue some downside.

Buyers in Trouble?

Today was the biggest volume print in the NYSE since March. Maybe it was just BABA but who the hell knows.?

The ES closed down just 3.5 handles, and the IWM managed a 1.5% decline.

I continue to view increased volume like this on down days as very distributive.

Despite no out right real damage.

Intraday: Buyers stepped in before the prior day ES lows for a strong push back to VWAP at 10:20.  With such a steady grind down, I had no entry metrics to lean upon to game this reversal trade.  A minor low of the prior session at or near 11:00 would have been perfect.

VWAP late day reversal trade a high odds trade, but it was late in the session.

 

The Government is in Control

Well, at least this market is one thing: very predictable.

Just another consolidation grinder at all-time highs.

So what's new?

We all know that a big red bar day is coming - they always do, eventually.

Yes the breath is waning, and I would have to agree with Brett that there are a fair amount of stocks on the 52-week low list and quite a few of the high flyers have been nicked. Breath sucks!

Price is extended enough now that a down day could be a nice go with scenario.

We all keep waiting for the September and October sellers to show their hand, but the governmental liquidity appears to be trumping it all once again.

I really wonder what the destination is should this 2000 level be firmly cleared before any major correction takes hold.