The market is driving higher due to coordinated central bank news/actions. First it was the Bank of Japan, then the ECB and then China. This has trumped everything else - market structure, fundamentals etc. but we are not here to fight the central banks or blame the news. We just want to go along for the ride. This period from Nov - Mar is usually very bullish. It is a pattern we have seen for the last 5 years. With fewer than 25 trading days left in the year, barring any "black swan" events or news, it appears we are going to end the year with double digit returns for the S&P but then again anything can happen. The 2 charts below provide a longer term view of the market. The monthly shows a breakout above the 2014.50-2016.75 area. This area now acts as support.
The weekly shows a breakout above a large balance area.
Lets go to the Profiles next. Friday we gapped higher on news from China. Traders took advantage of higher prices to sell into the rally from the Open print. We 1-timeframed lower for 9 periods (30 min) - slow liquidation versus new money selling - Value was clearly higher and the market could not close the Gap at 2052.50. For Monday, my focus is on the Gap and the lower 3 day balance. Failure to fill the Gap keeps the market in balance or 1-timeframing higher. Acceptance back within the 3-day balance is negative and brings the prominent POC (2050) from Thursday last week into focus. Below that we have support at 2035-38 - 3-day balance lows and weekly POCs.
The weekly shows a breakout above a large balance area.
Lets go to the Profiles next. Friday we gapped higher on news from China. Traders took advantage of higher prices to sell into the rally from the Open print. We 1-timeframed lower for 9 periods (30 min) - slow liquidation versus new money selling - Value was clearly higher and the market could not close the Gap at 2052.50. For Monday, my focus is on the Gap and the lower 3 day balance. Failure to fill the Gap keeps the market in balance or 1-timeframing higher. Acceptance back within the 3-day balance is negative and brings the prominent POC (2050) from Thursday last week into focus. Below that we have support at 2035-38 - 3-day balance lows and weekly POCs.
thank you !
ReplyDeleteDidier
Thanks Atul. Great work. I'd love to see you post everyday! Is that possible?
ReplyDeleteSteve B. from JP's room
Steve - I do my homework everyday...for that i will need to charge you $50 per month. let me know if you are interested.
DeleteHi Atul,
ReplyDeletedo you use a price chart for entry-exit or do u trade directly from profile?
Another question is what entry exit techniques do you normally use at a reference level?
thanks,
Matt.
Matt - i simply use the profile combined with the Market Delta foot print chart. The purpose of doing the daily homework every morning is to simply execute at the reference levels I believe will offer a trading opportunity. Unless things change drastically between the time I have done my homework and the trade presents itself, I simply execute on my plan.
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