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Assessments / Blog


2018-06-07
ES #F Strong Demand after “No Supply” pattern end of May


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 assessment dated May the 30th we noted “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”. In our previous assessment we mentioned “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”. The resistance was broken with ease and our first target was also reached on the 4th. Yesterday our second target of 2759.50 was taken out. The final target was set at 2802 and we expect to see that target met in the following week. A pullback is a possibility to the 2743.00 level, before that level is reached.

On June the 1st the turning point upwards came after volume in the current up move exceeded the volume of the previous down wave, signalling a “No Supply” pattern with Demand readings since then.

Yesterday the Demand in the ES reached its highest reading since May the 30th and trading accelerated upwards with a 22.00-point move to the upside. At the time of this writing the ES already exceeded Yesterday’s high at 2774.75 and is currently trading at 2778.00.

Daily Signals June the 6th

Dashboard:

The Supply and Demand Reading (1st row) came it at 7.1 with Demand dominating the trading session and strengthened, the highest since may the 30th.

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 bullish. The change in average Volatility from the previous day was positive 3 (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 27 (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).

67% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 61%, a positive sign for the markets.

We are heading towards resistance at 2790 to the upside.

Caution:

On the Daily chart we are nearing the Greed (Overbought) level on the Supply / Demand Sentiment Tool. A pullback to the 2743 level is a possibility, before another move higher.

 

Intraday

We took one 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 an effort to move down towards the Gap left since the close of the previous trading session and closed the Gap, before moving higher for the rest of the session. Demand dominated throughout the session.

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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