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Assessments / Blog


2018-05-20
ES #F Supply with mediocre movement


 

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 internal data of the total market. It is updated in real time during the regular trading session of the NY Stock exchange 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”.

In our last assessment we commented that we should move North again. This did not happen yet and Supply entered the market. On Friday Supply was dominant, but price closed down only 5.75-points. On the Intraday chart the zig zag price action is clearly visible, trading mostly in the 2712 to 2719.75 range. This price action and the fact that a decent amount of Supply could not drove the market down further, looks a lot like absorption. All the Selling efforts are absorbed by the buyers. In Wyckoff’s terms “A lot of effort without the expected result”. A bullish sign!

Daily Signals May the 18th

Dashboard:

The Supply and Demand Reading (1st row) came it at -2.9 with Supply getting the upper hand.

Supply and Demand Direction (3nd row) was to the downside (maroon down triangle), indicating downwards direction, with No substantial strength.

Average Supply and Demand Volatility (4th row) is still below 100% and is bullish. The change in average Volatility from the previous day was negative 0 (neutral) as shown on the right of Sup/Dem Dashboard.

BXB Signals:

We have no 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 41 (supply strengthened) shown on the right of BXB Dashboard.

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

50% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 46%, a positive sign for the markets.

In short Supply overcame Demand which resulted in a 5.75-points down move on Friday. A lot of Selling effort, but not the expected result. Average Supply/Demand Volatility is still bullish and the Supply could not drove price below the 2709 level (1st Standard Deviation of the Regression channel).

We believe the market will go higher in the following 4 weeks till about middle of June according to our study of our proprietary pattern model. Our targets to the upside are 2741.25, 2756.50, 2789 and 2802.

Caution:

We are in Selling pressure territory so some more weakness is a possibility and the 2700.50 level can be tested again.

Intraday

We took two opportunities during the last trading session on the 26-minute chart below, but the results were not great due to the choppy sideways action during the whole session:

Strategy is simple, enter when 2 Dashboards align and exit when two opposite triangles on BXB Dashboard appears.

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). Supply was dominant but, the down moves were mediocre and choppy.

RISK DISCLOSURE:

The information delivered here is for educational purposes only and is not intended to be a recommendation to purchase or sell any of the stocks, futures or other securities referenced. All references are for illustrative purposes only and are not considered endorsed or recommended for purchase or sale by MC Trading.

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