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Newsletter / Blog


2018-06-08
ES #F Demand weakened, possible absorption


The daily chart above shows our SUPPLY and DEMAND Dashboard and BXB (Bar by Bar) Signals.

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.

Yesterday the expected pullback occurred. The low of the day came in at 2760 and price closed at 2770.75, 1.50-points down from the previous day, whilst we had a demand reading, although it weakened, compared to the previous day. This is a minor anomaly and can be attributed to absorption taking place where all the Supply is absorbed by Demand, without significant price movement.

Some more weakness is a possibility, because of the weekends G7 meeting, before moving higher again.

Daily Signals June the 7th

Dashboard:

The Supply and Demand Reading (1st row) came it at 1.8 with Demand dominating the trading session but weakened.

Supply and Demand Direction (3nd row) was to the upside (blue up triangle), indicating upwards 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 5 (Demand weakened) as shown on the right of Sup/Dem Dashboard.

BXB Signals:

We had an unbalanced market 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 35 (Demand weakened) shown on the right of BXB Dashboard.

The overall NY Stock market traded Lowe for the day (maroon down triangle in 3rd row).

47% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 67%, a negative sign for the markets.

We are neutral as to the near-term direction, but bullish on the longer term.

 

Caution:

On the Daily chart we are nearing the zero-point on the Supply / Demand Sentiment Tool. A pullback to the 2743 level remains 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. Demand had the upper hand by a small margin throughout the session, although price closed slightly lower for the day.


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