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2018-05-23
ES #F Supply and filling the gap


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”.

Click here for example of reversal trade taken in Feeder Cattle that can be found on this page.

In our last assessment we concluded that “We still believe the market will go higher in the following 4 weeks till about middle of June according to our assessment of our proprietary pattern model, but more short term weakness is a possibility, before another substantial move higher”. We also caution that we are in Selling pressure territory and pointed out that it is a well-known fact that nearly all gaps get filled in the S&P 500 over time. Yesterday during regular trading the ES closed down 6.75-points, with mostly overall Supply readings and signals. At the time of this writing the ES traded to a low of 2711, filling the gap of 15.75-points.

Daily Signals May the 22nd

Dashboard:

The Supply and Demand Reading (1st row) came it at -2.8 with Supply dominating.

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) was below 100% and is bullish, but nearing the bearish level at 100%. The change in average Volatility from the previous day was negative 21 (Supply strengthening) as shown on the right of Sup/Dem Dashboard.

BXB Signals:

We had a sell 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 -108 (Supply strengthened) shown on the right of BXB Dashboard.

The NY Stock market traded Lower 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 56%, a negative sign for the markets.

In short Supply dominated which resulted in a 6.75-points down move during the regular trading session. In after-hours trading a further 15.25-point drop occurred, the gap to the down side was filled at a low of 2711. This 2711 level will naturally be a resistance level. Further resistance to the down side identified come in at 2708.75 and 2700.50.

We still believe the market will go higher in the following 4 weeks till about middle of June according to our assessment of our proprietary pattern model, but more short term weakness is a possibility, before another substantial move higher. Our targets to the upside are 2741.25, 2756.50, 2789 and 2802. The first target was met Yesterday, after which price reversed.

Caution:

We are in Selling pressure territory so some more weakness is a possibility. Volatility has picked up.

Intraday

We were cautious to take long entries Yesterday and took one short opportunity during the last trading session on the 26-minute chart below. Entries and exits are shown with arrows:

Strategy is simple, enter when 2 Dashboards align and exit when two opposite triangles on BXB Dashboard appears, shown with arrows on the chart. We do not take trades when the of Supply and Demand Sentiment tool is at or near extremes (over-bought/sold) in the same direction of the possible trade. 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).

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.

Trading Forex, Stocks and Options, Futures and any Cryptocurrency, Commodity or ETF contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results and no representation is being made that any account will or is likely to achieve profits or losses similar to those shown. MCTrading has taken reasonable measures to ensure the accuracy of the information contained herein and on this website, however MCTrading does not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or from an inability to access such information or any delay in or failure of the transmission or receipt of any instruction or notification in connection therewith.

 


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