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ES #F Weak Demand, range tightening
At the opening of the regular trading session Yesterday a lot of Supply entered the market, pushing price down to a low of 2652.25 (The expected pullback). Near the end of the session, Demand overcame Supply with a sharp move up to end the day at 2670.25. The ES closed the day with a small gain of a 0.25-points. The Supply/Demand Sentiment tool on our intraday chart clearly shows the turning point when Fear reached a peak (yellow line), then Demand overcame Supply (white line) and price advanced suddenly with an 18.25-points move up. Demand ended up to be on top, but only just and is considered to be weak. The daily trading range is also tightening. Before a decent move up should occur, the Supply/Demand Sentiment tool (last sub window on chart) should turn upwards and hold its ground above the zero line. The fact that Demand is gradually weakening over the last few days is reflecting in the price range that is tightening. Today should be an important day to give more clues as to the future direction of price.
The Supply and Demand Reading (1st row) was 1.0 Yesterday which indicates Demand had the upper hand, but is weakening.
Supply and Demand Direction (3nd row) was to the upside (blue up triangle), indicating upwards direction, with No substantial strength.
Average Supply and Demand Volatility (4th row) is below 100% and is bullish. The change in average Volatility from the previous day was positive 10 (bullish) as shown on the right of Sup/Dem Dashboard.
We have a balanced market warning signal on the signals board (1st row).
Daily Volatility direction (2nd row) was Down (maroon down triangle). The change in daily Volatility from the previous day was negative 32 (bearish) shown on the right of BXB Dashboard.
The NY Stock market traded Up for the day (blue up triangle in 3rd row).
60% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 50%, a positive sign for the markets.
In short we have mixed signals and the market can go any direction. We have weak Demand and the Supply/Demand Sentiment tool is still moving down. A move below the zero line can lead to another pullback. Strengthening and an upturn will probably result in a breakout to the upside.
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.
We have mixed signals and Demand needs to strengthen before a substantial up move can occur. Price can still move sideways in a very tight range from here.
There were a number of 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. Entries and exits are shown with arrows on the chart.
The last sub window on the chart shows the Greed / Fear sentiment measurements of Supply and Demand Sentiment tool. Similar to an Oversold / Overbought situation (but without using price related formulas). There were clear signs of the reversal to the up side during Yesterday’s trading session. The Yellow line is where Fear reached a peak, then demand overcame supply at the white line, with a resulting 18.25-points quick move to the upside.
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