Assessments / Blog

ES #F Up move then closed down?

The daily chart above shows our SUPPLY and DEMAND Dashboard and BXB (Bar by Bar) Signals.

Readings are based on Supply and Demand and Volume obtained from raw internal data of the total market. It is updated in real time during regular trading sessions and does NOT take into account any price indicators or mathematical formulas using price. We do however show the cumulative price change for the trading session and in some instances assess price movement’s relationship to Supply and Demand. It is therefore fair to say that the readings and signals are independent from other popular price indicators or those shown on the chart. The readings are an independent assessment of the one and only measureable fundamental market mover: SUPPLY and DEMAND. It does not matter if price is influenced by a geopolitical event, seasonality, fundamental economic data releases or sentiment driven news, etc. It all reflects in Supply and Demand, the “footprint” of the “Big Boys” or “Smart Money”.

 During outside regular trading hours’ Yesterday, buyers have driven price up to a high of 2680.50, but price failed to follow through or stay above the 2679.25 level and the ES ended up closing 4.75 points down.

Compared to the previous 2 up waves on the chart above, the current up wave (still in progress), has drawn 9.3M contracts so far, only to progress 96 points. The up wave before the previous one moved 93.75 points only on 5.2M contracts and the previous up wave moved 120.25 points only on 6.7M contracts. This illustrates a huge effort by the buyers to move price up, with less progress. The ES closed in the red by 4.75 points Yesterday after another failed attempt by the buyers to keep it above resistance at 2679.25 (outside the normal trading session). Because of this and the indications below, in our opinion there is still some weakness present in the markets and are not convinced that the next move will be higher.

Dashboard and BXB Signals:

The Supply and Demand Reading (1st row) was +0 Yesterday which indicates no domination by the buyers or sellers. It is important to note that it fell from a reading of +3 to +0.

Supply and Demand Direction (3nd row) was to the downside and strong (Red arrow), indicating substantial strength to the down side.

Average Supply and Demand Volatility (4th row) is below 100%, but very near the bear territory (above 100%) and came in at 97%. The change in Volatility from the previous day was negative (bearish) (-49 : right hand BXB Signals dashboard) for the day, and it was also negative (-38 : right hand 1st Dashboard) on the average reading, showing a bias to the down side.

On the signals boards there is a warning signal (1st row). Down move with positive strength reading (although it was +0), meaning an anomaly exists in the market. Be careful with your trading on Monday!

Daily Volatility direction (2nd row) was down (red triangle).

The NY Stock market traded higher (blue triangle in 3rd row).

44% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to previous day’s 42%. We deem this not significant, as we want to see at least a 3% change in any direction.

In short we saw an effort that pushed price upward, before regular market open Yesterday, but failed to stay above key levels, as the market ended down 4.75 points. Our advice will be not to take long positions at this time and look for short opportunities on the short term on Monday.

A bar close above 2680.50 can get the bull market on track again. A break below 2584.50 can lead to more weakness.


The Dashboard also works excellent on intraday time frames. Below a 26-minute chart of the day’s trading session:

We saw the market opening weak and then on the second bar of the session the Sup/Dem reading fell from +4 to +0 (1st row), accompanied by a strong down ward direction of supply (3rd row, red arrow), with some selling pressure on the Volume Oscillator. A good safe entry could have been taken here and exited on the yellow block signal on the BXB Signals board.

The second opportunity came after various warning signals, with the Sup/Dem reading falling from +1 to +0 (1st row), accompanied by a strong down ward direction of supply (3rd row, red arrow), with some selling pressure on the Volume Oscillator. An exit should have been taken when Volatility direction (2nd row) and %> VWAP (3rd row) changed to the upside.

Note how the market changed direction after each Yellow warning signal (white lines on chart with arrows).


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