Wednesday, August 19, 2009

Buyers appear

Here is a 30 minute bar chart of e-mini day session trading. My range estimate for today was 970-984. But during today's first 30 minutes the market rallied on higher volume than it showed on previous early rallies (green arrows). This is the first sign that sellers have had their innings and that the buyers may be taking control of the market. This also means that we saw the day session low at 978.

A high volume rally above resistance at the horizontal, red dash line near 994 would be very bullish. In any case I think we shall see today's high (red oval) near there and near the descending, red dash trend line. Upper channel line resistance (red dotted trend line) is at the 1000 level right now. I think a rally that high would mean that 975 ended the drop from 1016.

11 comments:

dcatlowpj said...

Carl...nice tell on Volume. There was some exhaustion on that pop. This is how I read Volume (VSA):

http://www.sfomag.com/homefeaturedetail.asp?ID=363568822&MonthNameID=June&YearID=2006

The above is a good article and has made me very aware of how Volume can be counter-intuitive.

I took that long from the 6:40a pop above the previous swing high at 6:05a (Pac times, all) and rode it until I saw a BIG GREEN buying volume bar on my 5-minute chart and closed that trade...on thos same volume pops you mentioned.

Kishore said...

Carl, it is, indeed, dangerous to disagree with you as you have been right so often. However, I do believe that we have more downside to go before turning up again.

When the market was ramping up to 1016, the value of the accumulated TICK was in a downtrend. To me, it implies that program trading was distributing.

Now that the market has fallen a bit, even desperate attempts by program trading, with a strongly up-sloping accumulated TICK, is not having too much effect on price. In other words, the market does not want to go up even though FED is throwing a lot of money at it. We have more downside to go.

dcatlowpj said...

Nice little bounce off of the session mid-line; long again at one tick above 87.50...triple top on 3000V chart...seeing some resistance at 996...will close a few ticks below unless I see a major pullback here at 9:02am PST.......

p.s. Carl, can you make this forum such that we can subscribe and NOT enter a word verifier AND my Google user name and passwords....

dcatlowpj said...

Nice call today, Carl...nearing 1000 century and I see some distribution here...thinking about closing trade for the day....

Kishore said...

Carl, it appears that just as my comment number 2 above was getting posted, another helicopter load of money to GS, Goverment Sucks, was already on the way from Uncle Ben of the FED.

We have just witnessed a huge amount of buying by program trading, at very high volume per tick, that carried ES from 986 to 996 within minutes. The little guys like us are at the mercy of the market manipulators.

Carl Futia said...

I think that the intentions and positions of any "market manipulators" can be read from the market's own action.


Subscribing to any "devil" theory of market movements is intellectually disabling and closes one's eyes to what is actually happening.

Kishore said...

Carl, I agree we can see all of the effects of program trading as program trading is reflected in the TICK count and the the volume per tick of trades.

zerohedge.com has documented the above mentioned actions, and the actions are, most certainly, diabolical. The "devils" also account for over 70% of trading volume and most of it is not as an agent but for their own accounts.

Only devils can make $100 million dollars in trading profits per day through unfair means. And they can that only through manipulations and not through normal forces of supply and demand in a free and open market.

It will be intellectually dishonest to ignore such a powerful force that is affecting the current market.

Enky Nakamura said...

I think that the chart already discount everything, so market's own action is 100% reflected in the chart; if i have to worry and be paranoic about these manipulators intentions i'll get mad soon. We cant do nothing and so we have to convive with them.

extrader said...

Carl,

Any guesstimates for tomorrow's range?

Me vs. Wall St said...

To Kishor:

I respect your views and I am familiar with your argument. However, has there been a time when the guys with the largest bank account DIDN’T move markets? I believe this to be true in the tube sock market as it is in the stock market or any other market.

I would venture to say that successful traders trade WITH the big boys. Let’s assume that whoever the MMs are decide to leave. Who will provide the volatility then? I, for one, would not want to trade a market that moves in a 3 point range.

I am afraid there is a conflict of interest in the current.

Best of luck.

dcatlowpj said...

Me vs Wall:

That was a good post. Time immemorial! I would add that reading those charts and volume, as well as S/R and trading WITH the trend on breaks is as good a way to trade with the movers. I look for exhaustion on big moves and enter again in that direction each day later in the session.... about :40 after the open (9:40 EST) is a great time to watch up to that 10am hour.....and later after the bond desks close...of course, it's not all about time...but there are elements of that each week 2 to 3 days...otherwise, price action is our friend.