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Newsletter / Blog


2018-05-05
ES #F Spring and Up


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, the “footprints” of the “Big Boys” or “Smart Money”.

 We concluded our previous assessment with “A realistic possibility exists that the 2611.25 area will be tested, as is characteristic of spring patterns, before continuing the upward reversal path” and the market responded Yesterday precisely as expected, with an initial down move, testing the 2611.25 area. It came within 1-point of this area to 2612.25 before reversing to the up side. After the initial test down, Demand took over and it was one-way traffic to the upside, closing 32.25-points higher at 2664 above the first identified resistance zone (2658.50).

 The Spring reversal pattern played out exactly as we anticipated.

Dashboard:

The Supply and Demand Reading (1st row) was 34.7 Yesterday which indicates Demand was dominating.

Supply and Demand Direction (3nd row) was to the upside (lime up triangle), indicating upwards direction, with substantial strength.

Average Supply and Demand Volatility (4th row) is below100% and is bullish. The change in average Volatility from the previous day was positive 42 (bullish) as shown on the right of Sup/Dem Dashboard.

BXB Signals:

We have an alignment signal to the upside on the signals board (1st row).

Daily Volatility direction (2nd row) was Up (blue up triangle). The change in daily Volatility from the previous day was positive 122 (bullish) shown on the right of BXB Dashboard.

The NY Stock market traded Up for the day (blue up triangle in 3rd row).

63% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 57%, a positive sign for the markets.

In short we saw a brief test down to 2612.25 then Demand stepped in dominating and reversing the immediate term trend during the regular trading session Yesterday, confirming the Spring formation. Buying pressure also developed on the Volume Oscillator. All readings and signals are bullish, but we entered the Greed territory of the Supply/Demand Sentiment tool and a pullback on Monday cannot be ruled out.

Resistance to the up side is at 2682.25 and 2688.50. A break above this levels will test the 2718.50 high of the 2nd last upswing which has drawn a significant number of contracts.

 Caution:

We are in Greed territory of the Supply/Demand Sentiment tool. A down turn in this tool will signal a pullback.

Intraday

There were 2 opportunities 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. Both entries were long (Green up arrows). The first entry long was a substantial winner!

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).


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