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ES #F Dominating demand, what next?
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 and others 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, leaving “footprints” of the “Big Boys” or “Smart Money”.
Price closed above the important 2679.25 level and the ES ended up closing 22.25 points up Yesterday.
The current upswing still in progress drew the highest number of contracts since January the 29th (considered by some as the end of the bull market?). Compared to the previous 2 up waves on the chart above, the current up wave (still in progress), has drawn 12.3M contracts so far, only to progress 111.50 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 6.9M contracts. This illustrates a huge effort by the buyers to move price up, with less progress. Yesterday’s volume was again like the day before, below average. This slow upward move on lower than average volume can be viewed as “absorption” where the buyers grab all offers made by the sellers. On the Volume Oscillator we see a divergence to the down side, with no Selling pressure. If Selling pressure develop, we will see at least a pullback. In our opinion the next move will be important as the market is balanced at the moment, meaning the amount of Supply match the expected result (price change) for the day. This is usually an inflection point for continuation or reversal point in the market. To be convinced that the next move will be higher, we want to see follow through to the upside today. The next major resistance come in at 2744 and 2979 to the upside.
Dashboard and BXB Signals:
The Supply and Demand Reading (1st row) was +21.1 Yesterday which indicates domination by the buyers.
Supply and Demand Direction (3nd row) was to the upside and strong (Lime arrow), indicating substantial strength to the upside.
Average Supply and Demand Volatility (4th row) is below 100% and bullish. The change in Volatility from the previous day was positive (bullish).
On the signals boards there is a buying signal (1st row blue arrow).
Daily Volatility direction (2nd row) was up (blue triangle).
The NY Stock market traded higher (blue triangle in 3rd row).
60% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to previous day’s 44%.
In short we saw relative strong demand Yesterday that pushed price upward. Follow through is expected today and if not, it will demonstrate that some Supply is waiting to go at the bulls in the markets.
The Dashboard also works excellent on intraday time frames. Below a 26-minute chart of the day’s trading session:
We saw the market trading substantially higher after the market close on Friday in overnight trading. The opening candle (15h30 or 09h30 US time) on the chart shows a huge down bar, an effort by the Sellers to close the gap (Fridays closing price below Monday’s opening price). This candle revealed the presence of very Strong Demand (Reading of 17.7 and Substantial Demand directional strength), despite a large move down into the gap (between 2657.25 and 2675.25). The next candle was an excellent place to take a confident long, knowing strong Supply is present that will push prices higher! The Supply reading on this candle came in at 16.6, with Substantial directional strength and Volatility in bullish territory, matched by BXB buy signals. Exit could have been taken when the first 2 red triangles appear, with a warning orange block visible.
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