Hello Big Red

Interesting to note all of the nuances missed after reviewing my posts of the last couple of weeks.  But all of the metrics we follow do contain solid edge.  The tricky part is actually pulling it off real time.  Trading is not easy!  I hope to keep stretching analytic analysis and documentation each day to make the time put in worthwhile.  I know that I've improved greatly this year but do need to keep the thinking cap on for fresh approaches.

The Daily Auction: 
So, what was our Friday splat all about?

1) A expansive break from balance with high volume and momentum closing on dead lows, suggestive that a youthful downside auction has begun?

2) Or, like for most of the last 5 years, will the buyers step back in soon after the Fed announces fresh quantitative easing for the millionth time?

Friday's Action Overall: 
A solid high volume breakdown, sporting Goldilocks's downside price action. Mind you, not to hot (quick) or cold (slow).  Just right.  We are going to be using this term going forwards as I really like it!

Mid-session balance zone smelled of continuation and the 11:00 programs jumped on board to print another symmetrical leg to the downside.

Sediment NYSE:138 stocks up and 1923 down.  Have not seen that in awhile, nor have we seen NYSE volume this high since June of 2013

Morning Session Clues: 
A true gap below yesterday's range, emerging markets firmly in the tank, increased volume over yesterday's readings, no TICK readings above zero to speak of, and sediment sub -2000 for the 1st time in quite awhile were tells early going that real sellers were in the house.

Mid-Session Clues: 
Although the base was a bit longer than most true trend days, price could not test the vwap, and it kept printing lower highs during balance. And the TICK MA remained solidly under zero.  Very suggestive of continuation lower.

Late Session Clues: 
Once the 11:00 programs kicked in so perfectly, that was the tell to expect another leg lower.   Goldilocks price action lower kicked in and it sure felt like shorts were not about to panic.

Monday's Session: 
After a big trend day, odds are for balance.  Pushes below Friday's low might offer up a decent trade long.  Go with strong price action suggestive of selling continuation.  If buyers step in, then short covering could washing-machine it up quick.

Onto the slides...

Intra-day slides

Down Bar And Short In The Hole

Chomp, chomp, chomp.  Um, the taste of hat.  Thank you all for wishing me happy eating today.  Appreciate it!

Thanks China.  Apparently, it's not good 'ol China isn't firing on all of it's polluted cylinders, thus the futures got whacked before the bell, negating even a test of the Scooby Snacks above. Or maybe after last years stellar advancement (make that  5 years of steady advancement) the old girl is just tired.

The China populace must not able to function all that well after smoking a pack and a half of ultra-high tar cigarettes and living in a place where you can't see the sun 350 days per year. It just can't be a cheery place work hard in.

The near perfect pattern-failure scenario unfolded and down to the bottom of the range price explored before traders got short in the hole.

The 1st hour and a half of the session was very interesting and a couple of metrics we follow indicated that this day was ripe for possible short in the hole.

1) Most notable, our beloved TICK indicator could not even muster a -600 reading as price ground slowly lower for the 1st 2.5 hours.

2) Time was a factor too, as price did way too much balancing during it's morning descent.  

3) For a gap down of of almost 10 points to only have balanced sediment readings at -1000, (with no trend lower) was a flag too.  Both sediment and the TICK were indicative of a some strong buying pressure underneath the hood in the NYSE.

Trade of the day was the 11:00 reversal a tick or two above S4.  Mostly due to yesterday's very tight range, this is the 1st test of S4 that I recall in years.  For this level to get taken out with spotty morning structure, was something to bet against.

And it's no coincidence that 11:00 printed yet another reversal move.

Lots of great stuff on the 5 minute.  

Sweetening Of The Pot

Our analysis from yesterday still holds -- in fact we think that today sweetens the pot a bit.

Nothing but an inside range balance session today and no sellers to be had.

Range 1/2 of yesterday's session, sediment, high-low data, all hanging in there.

It all points to at least a look above.  Whether or not the look above pukes or prints a trend day, we don't know.

Intra-day we point to the morning look down trade, featured on the 5 minute.

Logic clear as a bell!  And one hell of a trade, despite the low volatility.

Nice Trading Day

A few days away from the blog, as it's just been so slow.  A few nuances the last few sessions, but nothing to write home about.

The smell of laggard sellers permeating the room.

Today showcased some remarkable structural cues that we feature so many times.

After today's look down failure, the daily is really triangulating.

Odds are going up, folks, for an upside resolution.

I'll eat my cowboy hat if they don't look it above the range for at least a test.

Do I even have one?

Green

Our opine of upside expectancy came to pass today with a gap up and a near test of all time highs.

But that was it, and from 8:00 on it was very tight balance.  Walk away from the desk kind of stuff.

We have to expect at least a liquidity run above the all time highs from today's basing action.  A failure back into the range print, and things might get interesting, or so we hope.

Bi-Polar Green Day!

Structure early on gave the "all clear" signal to the buyers.  Sellers were no where to be found, and once control was established, there were plenty of shorts from yesterday to drive the market up all day today.

And I thought that I was bi-polar!

Washing machine action always possible for tomorrow, but odds are that buyers keep control.

We are going to work through the market logic in slides as the session unfolded early on.  A great day full of sound structural logic.

I like the intra-day action today.  Let's sequence the upside moves. 

Red Bar Coming To Visit

In one of our slides last night we pointed out that odds were higher for the market to resolve higher.  But we also talked about a possible failure lower, and how we would go with it!

I liked our analysis. (Despite the irony of being out of the office for the 1st Monday puke bar in the last 5 years!)

For the selling today to start so late in the session, at 9:00 and out of low-confidence balance, was a tad sneaky.  But -1000 TICKs printed hard and fast, volume increased significantly, and price never did close above the 8 EMA fast line.  And, clearly, there was no upside TICK to speak of.

The 5 minute chart nuances today were loud and clear.

Here are a few a bi-polar thoughts: With strong trepidation, I am still expecting buying to come in. If not, then we are all over any high-confidence selling that shows it hand.  For tomorrow, post trend day action, consolidation is the high odds bet.

This market is so hugely extended.  And we have a lower high on our hands. Someday it's just going to keep selling.  Someday.  Not making a call but am cognizant of this possibility.  Seems impossible, but someday : )