On Friday, the market broke out of a large balance area and closed on the Highs turning the intermediate trend back to the upside. The NYSE volume at 3.9 Billion was above recent averages suggesting the breakout occurred with strong volume. It is said that the longer the market stays in balance, the more dynamic the breakout. Notice how long the market balanced between 1767-68 area and the 1805-1806 area - almost 25 days. The market probed deep a couple of times into the lower balance 1720 - 1768 but never really found any acceptance - always settling/closing back within the upper balance. However, these two balance areas shown in the chart below are overlapping - a sign that the trend to the upside is aging. This is information that should be carried forward. Old resistance now becomes support - 1806 area should offer support on any move to the downside.
The profile show below for Friday shows a poor high suggesting that the auction is not complete to the upside. Value was clearly higher and the POC migrated higher as price auctioned higher. The auction would have been healthier had we tagged the prominent POC at 1801.50 from Thursday but that is information to be carried forward. For Monday, my focus will be on the Pullback Low at 1812.50 which should offer short term support. The first sign of any change will occur with price acceptance back below this level. The expectation for now is that we see higher prices given the breakout from balance. With only 6 trading days left in the year, volume will be thin and I don't intend to participate in this market until after the new year.
I hope you all have enjoyed my musings about the market over the course of the year and in the process gained some knowledge and improved your trading. I know I certainly have improved my performance this year. Preparation is key - always focus on Trade Location - and have a pre-determined place to put a structural stop - thus avoiding large losses. That said, here is wishing everybody a Merry X-Mas and a Happy New Year !
The profile show below for Friday shows a poor high suggesting that the auction is not complete to the upside. Value was clearly higher and the POC migrated higher as price auctioned higher. The auction would have been healthier had we tagged the prominent POC at 1801.50 from Thursday but that is information to be carried forward. For Monday, my focus will be on the Pullback Low at 1812.50 which should offer short term support. The first sign of any change will occur with price acceptance back below this level. The expectation for now is that we see higher prices given the breakout from balance. With only 6 trading days left in the year, volume will be thin and I don't intend to participate in this market until after the new year.
I hope you all have enjoyed my musings about the market over the course of the year and in the process gained some knowledge and improved your trading. I know I certainly have improved my performance this year. Preparation is key - always focus on Trade Location - and have a pre-determined place to put a structural stop - thus avoiding large losses. That said, here is wishing everybody a Merry X-Mas and a Happy New Year !
