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ES#F Still supply, but buying pressure developing
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”.
Yesterday the ES closed down 19.00-points, after a 32.25-point rally the day before. There is still a lot of Supply present, but at the time of this writing it looks like buying pressure is developing. The 3-day chart is still bearish and a close above 2729.25 could change this picture. A close above 2741.75 is needed to get the bullish story on track again. A close below 2685.75 could lead to some more weakness in the markets.
Daily Signals June the 1st
The Supply and Demand Reading (1st row) came it at -7.5 with Supply dominating and strengthened.
Supply and Demand Direction (3nd row) was to the downside (red down triangle), indicating downwards direction, with substantial strength.
Average Supply and Demand Volatility (4th row) was above 100% and is bearish. The change in average Volatility from the previous day was negative 10 (Supply strengthening) as shown on the right of Sup/Dem Dashboard.
We had 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 198 (Supply strengthened) shown on the right of BXB Dashboard.
The overall NY Stock market traded Lower for the day (blue up triangle in 3rd row).
43% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 60%, a negative sign for the markets.
Supply dominated Yesterday and the ES lost 19.00-points. The immediate term is viewed as bearish. The market is trading above the danger point (2700.50) again and a close above 2729.25 is needed today to prevent more short term weakness.
The last down swing of 66.75-points was the lowest point down move since December 2017 the 6th and had drawn 3.46-million contracts, the lowest since the swing that ended on April the 6th.This down swing resembles a “No Supply” pattern, although the current upswing in progress has not completed as yet.
We still believe the market will go higher in the following 3 to 5 weeks, 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 2744, 2759.50 and 2802. Today’s trading could be the clue for the markets next directional move.
More short term weakness is a possibility if the 2700.50 level to the downside does not hold. A close below the 2685.75 to 2675.00 levels will spark more weakness in the markets.
We took two short opportunities 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 below shows the Greed / Fear sentiment measurements of Supply and Deand Sentiment tool. Similar to an Oversold / Overbought situation (but without using price related formulas).
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