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 : )

Coiling

Today's morning pullback and then a responsive push higher to print a checkmark pattern.

5 out of the last six days have been responsive pushes higher after a morning inventory re-balance lower.

And, as such, we have 7 days of relatively tight balance on our hands.

This market is messing with folks, re-balancing inventory while signaling it's not wanting to go down. 

Unless something is brewing very negative underneath the hood, odds are that it's going to go higher.  

Great day-trading structure today.

Balance Again

Alas, the big gap zone was tinkered with.  But this reference initiated a sell response to catch a few laggard longs by surprise.

The 1st hour and a half pulled off a rather decent morning move lower to print a minor low of yesterday's range low. Volume was not up (whatsoever) on the move down, and sediment overall was low confidence.  It was rather clear that the move was just inventory re-balancing action versus true rats jumping ship action.

The just after 8:00 minor low of yesterday's range was truely the perfect, high odds trade of the day.  KICK ASS trade of the day.

Today was a great example about how to not hang your hat upon one particular reference when another major reference is lurking just below.  This is not an easy skill whatsoever.  Today's S1 level was 1827 and yesterday's range low was 1825.50.   And, you guessed it, the lows were 1824.25 as the stops were ran.  If you got cute, thinking that S1 was it, your stop better have been large enough.  This was a mistake that I made today.

But what a great trading day yet again.

Even though today was a bit of a failure, it was just another inside range balance day that the buyers will probably jump upon.  But I cringe in saying this with the jobs report tomorrow and this market so crazy extended.

Inside Balance

A very mundane inside range session today.

Yet two trades setup up perfectly.  Following the trade-criteria we talk about so many times: A) Buying the 7:00 minor low of the previous session with a excess tail, and B) Buying the morning pullback from highs to VWAP.

The last hour reversal at yesterday's range lows a seriously honorable mention (maybe more so) but I tend to shy away from last hour reversal trades.

Today's consolidation shifts odds greatly for an upside resolution, or so the crew here thinks.

We feature the weekly ES chart tonight for a reality check of just how extended this market is.  At this point, even a healthy correction is going to freak everyone out.

We also show tonight how far diverged the emerging markets ETF is.  No hot-money, risk-on in the EEM whatsoever.

Gold going to be a rotational buy soon?  If the indexes puke, it just might...

Green Day!

We got the high odds green bar today!

But after the morning session move up to the highs of the multi-day range, it was relatively tight balance for the rest of the session.

I think it's high odds for a push higher to fill the big gap looming above.  Either that or washing machine action starts and we plunge back into the range -- low odds.

Listening To The Market

The 3rd trading day of the year and the 3rd day in a row of similar structure intra-day.

And people think that futures trading is high-octane glamour, or something.  When it's really just finding some mundane patterns to exploit as high odds scenarios -- over and over.

For me, the most difficult aspect of market analysis is attaining an innate fluency with time. So many times over the years on this blog, I just shank the time analysis -- simply not incorporating it. Price is so obvious, volume too. But just as important is time, and that just takes time (no pun intended) to fully synthesize it all.  Time, Price, Volume. That's the simple (or not so simple) equation.

Today: Morning balance gave way for a sissy look down to S1.  An extended base near lows, (and around S1) gave way to a responsive push higher at the 11:00 time zone.

And again, the TICK gave the all clear signal for no continuation move lower due to it's moving average hanging out above zero for about two hours. (Serious high-odds stuff.)

And again, momentum diverging around a floor trader pivot reference indicated a reversal.  My studies for 2013 indicate that divergences and reversal patterns on a floor trader pivot zones were some of the cleanest and most reliable trades of the year.  Programs just love them! (Serious high-odds stuff.)

Great Structure.

Another superb structural day.

The pattern of the day once again was a low confidence, extended balanced early session that looked lower only to get rejected just after 9:00

We also highlight how price explored to a near re-test of range lows just before 11:00 with the TICK moving average firmly above zero.  That was one very seriously high-odds entry to the long side.

And a total inside range day to boot, that increased odds all the more.

Expected response for Monday is a push higher.  But Monday's are coma-fests for the most part.  Will 2014 change this pattern?

Oh, bought a $74 dollar western digital black 7200rmp hard drive today to man the C: drive.  Cloned the operating system to it, and we are fully free of the SSD hoax plaguing our existence.  Boot times surprisingly good and it's almost completely silent.  And the previous crash got me to re-organize and backup all data.  So, I'm one freaking amazing computer tech support guy now.  Come get me computer gremlins!