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ES #F Supply dominating session, caution for Monday!
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” by the “Big Boys” or “Smart Money”.
In our April 20th assessment we stipulated that “on a balance of probabilities price can go down a bit more before returning to its upward path. Supply were dominant but only by a small margin and the situation can change quickly.”
Supply remained dominant during Yesterday’s trading session, and the market closed down 21.50 points. The Divergence did play out as shown on the Volume Oscillator, price went higher whilst Demand weakened and eventually on the 19th price reversed downwards.
The Supply and Demand Reading (1st row) was -1.8 Yesterday which indicates domination by the sellers.
Supply and Demand Direction (3nd row) was to the downside but not strong (maroon triangle), indicating no substantial strength to the downside. Ideally we want to see a red coloured triangle for substantial strength down.
Average Supply and Demand Volatility (4th row) went above 100% and became bearish. The change in Volatility from the previous day was negative (bearish).
On the signals board we had a down triangle indicating a selling signal.
Daily Volatility direction (2nd row) was down (maroon triangle).
The NY Stock market traded down for the day (red triangle in 3rd row).
44% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 47%.
In short we saw weakness and Supply Dominating Yesterday and price went down 21.50 points. Some sideways price action may occur in Monday’s trading session because we are still in Buying pressure territory on the Volume Oscillator. Be careful to take any positions, until you see some alignment of the Volume Oscillator with the Dashboard and signals in the same direction. Although supply was dominant a turnaround can happen quickly if there is no follow through on Monday.
If Friday’s low at 2659.75 holds (no bar close below this level) and no Selling pressure develops, chances are good that price will bounce of the Regression mean (orange line) to 2718.50. If this level does not hold as resistance, we probably will see price moving up to the 2781 to 2807.50 levels.
There were 3 opportunities to go short, during the trading session Yesterday on the 26-minute chart below:
Marked with arrows on chart. Strategy is simple, enter when 2 Dashboards align and exit when two opposite triangles on BXB Dashboard appears. Red arrows drawn on chart show entries (short) and green arrows show exits.
The last sub window on the chart shows the Greed / Fear sentiment measurements of Supply and Demand. Similar to an Oversold situation (but without any price related formulas). White lines were drawn on the chart where Fear reached a peak (According to Supply / Demand readings) and then reversed. It is where the majority “panic”, covering positions in fear, causing an emotional over reaction and then price reverse. A real contrarian tool. Note that the exits of the short entries occurred just after the peaks were reached. The Supply / Demand sentiment were in the negative (supply dominating) for the duration of Yesterday’s trading session.
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