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Assessments / Blog


2018-06-19
ES #F Demand, strong close, overnight weakness?


The daily chart above shows our SUPPLY and DEMAND Dashboard and BXB (Bar by Bar) Signals using data from the NYSE.

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”.

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Yesterday’s trading followed the same pattern as on Friday (initial weakness with a strong close), but overnight weakness brought price down to a low of 2752.75. At the time of this writing the ES was trading at 2755.00.

Yesterday the ES lost 6.25-points to close at 2778.25 after an initial drop to a low of 2761.25. With the decent amount of Demand, we did not expect a down day and this is an anomaly. The tit-for-tat tariffs between the USA and China is clearly weighing in on the markets as fears that an escalating trade dispute could be detrimental for global markets.

Supply is still dominating on a 3-day basis, so caution would be in order.

Support to the down side will come in at 2756.00 and 2741.75. A bar close below 2756.00 will spark more weakness. Price needs to close above 2786.75 for the near term weakness to subside.

The Dashboards on the chart above show the Supply and Demand data for the total NYSE market. If we assess the daily chart with only data for the ES continuous contract shown below, we notice that Supply was dominating Yesterday (although the reading was not strong). At the time of this writing strong Supply emerged in overnight trading.

NYSE Daily Signals June the 18th

Dashboard:

The Supply and Demand Reading (1st row) came it 2.7 with Demand dominating the trading session.

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 at 100% which is a neutral sign. The change in average Volatility from the previous day was positive 38 (Demand) as shown on the right of Sup/Dem Dashboard.

BXB Signals:

We had an unbalanced market warning 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 56 (Demand) shown on the right of BXB Dashboard.

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

65% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 56%, a positive sign for the markets.

We are neutral to bearish as to the near-term direction, and still bullish on the longer term. We need to break the 2786.75 level to establish a bullish foundation again for the near term.

Caution:

The 3-Day and Weekly charts still show Supply dominating. If we do not have an up day Today, more weakness for the near term can follow.

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