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Assessments / Blog


2018-06-02
ES #F Wyckoff wave “No Supply” pattern played out


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 previous assessment we noted that there is “Still supply, but buying pressure developing” and “Today’s trading could be the clue for the markets next directional move”. We also noted the “No Supply” pattern on the daily chart and our bias was bullish.

Yesterday the ES responded with a 29.25-point move to the upside. Demand overcame Supply and Buying pressure developed, with a close of 2734.75 and above the 2729.25 level needed to overcame more short term weakness as mentioned Yesterday.

Daily Signals June the 1st

Dashboard:

The Supply and Demand Reading (1st row) came it at 6.0 with Demand dominating the trading session and strengthened.

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) went below 100% and is now bullish. The change in average Volatility from the previous day was positive 48 (Demand strengthened) as shown on the right of Sup/Dem Dashboard.

BXB Signals:

We had a strong buy signal 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 170 (Demand strengthened) shown on the right of BXB Dashboard.

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

55% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 43%, a positive sign for the markets.

We are heading towards resistance at 2741.75 and 2744.00 (a “thick” wall) and needs to break the 2744.00 level for follow through to the upside.

We still have a bullish bias and believe the market will go higher in the following 3 to 4 weeks, according to our assessment of our proprietary pattern model. Consolidation at the current levels is a possibility, before another substantial move higher. Our targets to the upside are 2744, 2759.50 and 2802. We view the near term trend as bullish again, as the 3-day chart setup turned bullish again.

Caution:

The ES is near resistance above, and consolidation (sideways price action) will probably occur at or near the 2744 level.

Intraday

We took two long 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 Demand Sentiment tool. Similar to an Oversold / Overbought situation (but without using price related formulas). Note how the session started with strong Demand coming in at the opening.

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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