Slam Bam: High ATR Again!

This market is doing some incredible washing machine high ATR trend moves.
ATR today was over 40 points.  Over 2% declines across the board.

And the media is in a panic. Of course, I'm not watching it but I'm sure that they are!

Yet all the market is doing is balance.  Yes, it is wild and crazy balance, but the daily is still technically not in any trouble whatsoever.

What bothered me today was that the sellers could not take out the range lows on the daily.

Like why?!?

Anyway we look for in tomorrow's session:

1) nod to push back up into the range, with trapped shorts -- The pattern that is currently in play.

2) nod to look below and fail -- then a push higher -- would not surprise whatsoever!

3) nod to a look higher and then a real puke as the range lows give way  -- seen that movie! .

4) puke and go lower tomorrow -- no games.  Just puke.  Hum, now that's rare!

It's October and volume is up.  And this is an incredible trading environment.

Just Like Yesterday -- But in Reverse

Yesterday we thought balance was low odds -- check!

And that the swing lows would get tested -- check!

And from there we just followed structural ques:

1) The daily minor low look down occurred at at 8:00 -- increasing the odds that is was a failure test at major range lows.  A failure here could produce significant short covering with inventory so short from yesterday.

2) The reversal ran to above VWAP and based -- not even actually touching VWAP -- increasing odds that this formation was continuation to at least range highs.

3) Upon the 11:00 breakout, the volume really came in hard, launching an incredible 2nd standard deviation climb into the close.  Ball-busting short covering.

4) Have we ever mentioned how important it is to be at the desk at 11:00?  lol

So what's up for tomorrow?

The 1st nod is for balanced consolidation to work off the buying frenzy.

The 2nd nod is that the test failure today launches more buying.

The 3rd nod -- and this is defiantly on my radar -- today's overblown upside produces selling back into the range to clear out some emotional longs.

Whatever, today was textbook structure that the astute trader ate for lunch.  Good stuff.

                                      
 Intra-day!

Responsive Sellers Beat Down

The daily downtrend channel line is very well respected. The gap down today could not fill and after many hours of balance, the 11 o'clock trade came into play as the sellers printed a double distribution move lower into the close.

This market is changing! The buyers have had multiple chances here to just continue grinding price higher. But it's just be down after beat down.

And the key nuance going into tomorrow will be that price is near the prior high confidence excess tail swing lows from last week. If the sellers can mow through that reference, then it could be game on to the downside.

Either that or this key reference will get rinsed and price will pop back up into the range.

Either that or today's selling was low confidence in the buyers will hit the gas tomorrow.  The overnight session is already up as I write this.

I think it's high odds that the swing lows will at least get tested tomorrow.

As I point out in the slides, I don't think that tomorrow will be balance!

Intra-day

End of day

Just Another Two-Way-Day

Morning gap up open drive lower reversed at the prior session open.  That reversal, reversed at the prior session close.  So that was the game today intraday.

With basically inside range balance today, the sellers don't have much to hang their hats on for any downside for tomorrow.  A bit of excess above, and a downside trend channel but that's up against a major swing low put in two sessions ago.

 

Fresh Auction

We should have been all over the call for a fresh upside auction yesterday. After all, a big fat access tail at the daily trend line is not something to out think

But between root canals and feeling like crap, it was the best that we could do.

So it looks like the grind higher is on until proven differently.

But I'm thinking that news messes things up!

It is October!

 

V Reversal

Two-way auction process!

The morning moved down was too fast into quick, and just before 9 o'clock the V reversal ensued.

Shorts were in the hole and there was not even a sniff of any desire to short the up move. What I am upset with myself about is that I found it really hard to go with the move up with the worry that it would retrace. And this was an invalid analysis simply because the market was so caught short.

We see what happens tomorrow, I have no real call to make, but it's for the buyers to lose.  The swing move higher on the daily is a free for all now.

10-1-14: Wednesday

1st day of the month can be extremely trendy, as a lot of volume can come in and the session can be emotional.

When you combine this with a range break of many days of balance, that's a recipe for a trend day lower should the buyers pull not pull it together.

As it turns out the trade of the day was to take the just before 10 o'clock range break lower. But you really had to divine that the 1st day of the month would support a trend move lower, in order to really capitalize on a trade like this -- as it came from low confidence structure.  It was a minor low zone for sure.

But as I said before, the big clues were the heavy increase in volume and the break from the multi-day balanced zone, and of course the 1st day of the month.

And we have been bearish in our bias on this market for quite a while, including yesterday. It's been feeling distributive for quite a while.

Odds are for balance tomorrow post a big trend move down. But we always have to respect the buyers here. A Hallmark trade - post a trend day - is to buy a low momentum look down below the previous range lows.

But it is October.

We will see.