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ES #F Supply with shakeout low holding
The daily chart above shows our SUPPLY and DEMAND Dashboard and BXB (Bar by Bar) Signals using data from the NYSE.
Yesterday the ES closed down by 20.75-points with a relative wide trading range.
Yesterday the ES closed at 2751.25 within the 2757 to 2743 area cautioned about in our previous assessment. The low came in at 2747.00 and did not break the low at 2735.75 of the shakeout that occurred on the 19th. Overnight trading pushed price up to 2755.75 at the time of this writing and price is moving towards the Buying pressure territory on the Simplified Volume Oscillator.
The picture that is unfolding looks like a potential re-accumulation phase as Wyckoff described it, but Buying pressure has to develop and only a bar close above 2796.00 in our view, will confirm a bullish near term trend again (see chart below).
We had the Climatic action with the Smart money up bar and the reaction that followed with a down move. Then the shakeout of the 2741.50 support on the 19th, a small rally followed with a test to the down side. Today maybe an up day?
Once an instrument (future, stock, forex, commodity etc.) has gone through accumulation and experiences successful ending action, it begins its uptrend. It is not uncommon for an instrument to pause during this rally and, once again, begin moving sideways. If, after this sideways trading range, the up trend continues, this trading range would be a period of re-accumulation.
Re-accumulation can begin in one of several ways:
_ An instrument can have a major Sign of Strength (Jump the Creek). Then, instead of reacting and putting in a Last Point of Support, it moves sideways in a new trading range.
_ The instrument can experience a normal corrective reaction, go through a period of re-accumulation, experience successful ending action and resume its uptrend.
_ The instrument can simply roll over and begin moving sideways. This is usually due to a withdrawal of demand. If, at the end of the sideways move, the instrument experiences successful ending action, it would resume its upward trend.
_ The instrument could go through a minor Climax and establish a more traditional trading range. Once again, successful ending action would result in a resumption of the upward trend.
NYSE Daily Signals June the 21st
The Supply and Demand Reading (1st row) came in at -6.3 with Supply dominating the trading session.
Supply and Demand Direction (3nd row) was to the downside (red down triangle), indicating upwards direction, with substantial strength.
Average Supply and Demand Volatility (4th row) is now above 100% which is a bearish sign. The change in average Volatility from the previous day was negative 32% (Down) as shown on the right of Sup/Dem Dashboard.
We had a sell 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 165% (Down) shown on the right of BXB Dashboard.
The overall NY Stock market traded Lower for the day (maroon down triangle in 3rd row).
39% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price) compared to the previous day’s 54%, a negative sign for the markets.
We are still in Selling pressure territory on the 3-day chart, but is approaching the Buying pressure territory on the daily chart with some overnight buying at time of this writing.
We consider the trading range between 2785.25 and 2747.00 as an important area and price can be caught in this range for several days. A bar close outside of this area will probably lead to a substantial move. A close above 2796 in our view, is needed to get the Bullish momentum on track again. A close below 2735.75 will spark more selling.
We took 3 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. 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).
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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