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ES #F Supply stepped in
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 24th assessment we cautioned about price taking out the previous day’s low at 2657.25, and that is what happened Yesterday. Price also closed below the Mean (Regression).
Supply stepped in after about 52 minutes after the opening of the regular session and started to outnumber Demand, with the result that the market closed down 35.75 points. The market took the 3rd opportunity to go beneath the Mean (Regression) from the last swing high. On the 26-minute chart below, it is interesting to see that Demand was dominating in the first 52 minutes but price slowly went down, until the peak of the Greed curve were reached and then price accelerated downwards.
The Supply and Demand Reading (1st row) was -1 Yesterday which indicates Supply was more than Demand.
Supply and Demand Direction (3nd row) was to the downside but not strong (maroon down triangle), indicating no substantial strength. Ideally we want to see a red coloured triangle for substantial strength.
Average Supply and Demand Volatility (4th row) is above 100% and is still bearish, but weakened. The change in average Volatility from the previous day was positive 5 (bullish).
On the signals board we had a selling signal (maroon down triangle in the 1st row).
Daily Volatility direction (2nd row) was down (maroon down triangle).
The NY Stock market traded down for the day (maroon down triangle in 3rd row).
37% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 51%.
In short we saw Supply starting to dominate, 52-minutes into the session with a decisive move down Yesterday and price went down 35.75 points for the trading day. Price closed below the Mean and the previous day’s low. This all look bearish, although sideways price action is a possibility today. Follow through to the down side or not, will be the key for today’s trading session. The first area of resistance to the down side come in at 2584.50.
Yesterday’s bearish price action can be a reaction to the bond market’s yield announcement and a rebound from here is not ruled out. If the market trade down in the short to medium term, the line in the sand for the bulls will be the February 9th low at 2529. A close below this level will Technically damage the bull market.
There were 2 opportunities one long and one short, during the trading session Yesterday on the 26-minute chart below:
Strategy is simple, enter when 2 Dashboards align and exit when two opposite triangles on BXB Dashboard appears. First entry long ended up in a small losing trade, but the second entry short was a sitter! (Entries and exits marked with arrows on the chart).
The last sub window on the chart shows the Greed / Fear sentiment measurements of Supply and Demand. Similar to an Oversold / Overbought situation (but without using price related formulas). White lines were drawn on the chart where Greed / Fear reached a peak (according to Supply / Demand readings) and then reversed. It is interesting that Demand were dominant the first 52-minutes of the session, but price went down. Then Greed reached a peak and price basically accelerated down after this peak was reached. What makes it more interesting was the fact that Demand was dominating by a substantial margin, but could not move price higher. From this it was quite clear that the “Big Boys” were taking the opposite side of all the buying effort. In Wyckoff’s language “A huge effort but little reward” to the buyers. Is it possible that someone new beforehand what the outcome of Yesterday’s economic enouncements would be and started selling into all buying efforts?.......
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