Classic Day Trade

Today was a classic day.

What's been working?  The morning push lower to support and then a bounce.

That's what we got today.

Trade of the Day: The morning push down and reversal trade.

This is a superior example.

Key Metrics:

1) Inside range opening of both prior day and overnight. Overnight session entirely inside range.  Increased odds for balance.  

2) Balanced initial balance and a low confidence break lower. Usually not a great structural metric to launch a never-ending trend move.  More increased odds for balance.

3) IB volume below 5 day average.  A/D sediment neutral extreme readings sub -1000.  Even more increased odds for balance.

Seeing a trend here yet Scott-Trader?
 
4) Stop gun minor low push below prior day's lows.  And a huge visual excess tail at this minor low area.  Utterly and completely textbook action.  Ultra-high odds long trade in this zone.

5) Bring home the bacon.

6) Does not get anymore perfect than this, Scott-Trader?

Inventory Washing Machine

Well, the crew is euphoric now. (And we are one eclectic bunch.)

The programs hit the 20 day and the overnight crawled higher for another successful trade as the market gapped up.

Yet, the cash opened and the powers-to-be felt the need to re-balance all of that inventory and they pushed it below gap fill.

And then the Zombie buyers showed their hand for a push to range highs.

And then it just went into a lifeless August coma.

No call tonight.  I have no significant edge who's going to seize control.

On one hand, today's action was nothing but inventory ping-pong. On the other, the 20 day hold shows buyer control.

If the buyers are really weak early on tomorrow, I'll be leaning towards a seller-control bias.  This is the 3rd day in a row of morning inventory re-balance weakness and then a buying response.

This pattern is due to get annihilated.

Zombies Are Back

The crew at our fund were happy today.  What is there not to like? Two successful calls in a row?  Nirvana! (Cough)

We do think that our structural analysis does feature more than a bit of edge.  But that's just us.

Yesterday's B formation was suspect.   And today's low confidence look down to the 20 day moving average just so happened to get the programs all hot and heavy, as they stepped in at this level.

And from there it was just a Zombie Grinder higher.

A low volume check mark structure reversal at the 20 day = highs odds for the Zombies to step in and do their thing.

High odds upwards push tomorrow of some sort.

Red Bar

The crew here was high fiving this morning as our prediction of a red bar event occurred today.  (And we got our +10)

But before we get all too giddy, we note that today's structure was a CLEAR B-formation.  And these formations can signal high-odds potential that the buyers are going to step back in tomorrow.

But today's red bar comes from a failure at the 1700 level, so this fact adds some odds back to continued selling.  But I'm sure sure exactly how much.  

Volume up, (how could it not be after yesterday?) but today still only a 12 point range.

One of these days sellers are going to swamp the tape and stir things up.

I'm sensing that we might get yet another red bar push tomorrow.

So I'm making the call.

Zombie Day -- Again!

We start out slides tonight with the volume chart.  IB volume multi-week lows and EOD volume multi week lows too.

Is this really the action one would expect after a recent breakout of multi-week balance?  Sure, it could be consolation for another push up, but YIKES!

My take is that this is one freaking tired auction and a red bar is coming.  And it could very well be huge.

Zombie Grinder

Friday's session indicated to me that the red bar is close at hand.

Creeper grinder after creeper grinders that really don't go anywhere are the structural cues.

And this Friday's inside range "trend day" is about as bad as it gets.

Zombie Buyers

Multi-week highs breakout today 1st of the month.

In times past, a breakout like this would rocket.  Today's intra-day range was 9 points.  And most of the day the range was 3 points.

Further, the TICK distribution was something like I've never seen on a breakout like this.  One reading over +600 ALL FREAKING DAY.

There was a time when I thought this impossible.

We are at the 1700 level.

Today could be the laggard long day of lore.

Either that, or the market has fundamentally changed and and "crappy up structure" gets a whole new definition.

We make the call that a red bar is coming to a movie theater near you soon.

And it's going to be big.