Real Time Price Action- Clue to Puzzle?

[Nvesta81]

	Quote:	zeon
	I don't think I quite understand your chart though. If I am understanding this right, there is no support below 1720? I took a trade on the ES today, but because your chart was the NQ so I'll post the setup here too. The same thing occurred on the NQ anyway so it's all the same. Your last rectangle was 1700-1710. I had support around 1707 actually, so around the mid of that. Then almost exactly one hour into the session price went down on heavy volume (see qqqq chart) and broke that support. The next bars were all small and on low volume, a retracement right? So why does price rise then? I fear I am losing touch with reality here.

From my perspective prices were marked down to test the supply early in the day. They then hovered just below a key support area and because there was little volume below it (no supply), it was the go-ahead for the smart money to markup prices after they accumulated on YOUR and everyone else's selling hoping for a continuation of the down move. (not meant to pick on you, I got burned like this before). Basically you got caught in a trap. There was a spring just below that support zone that gave away the strenght if you missed it.
edit : chart times are an hour ahead of ET.

[DbPhoenix]

An interesting contrast to yesterday.

Here we fell entirely out of the previous day's value range and price range. Gapped, as a matter of fact (though technically the futures don't "gap"). Not only that, we dropped below the midpoint of the entire range that began two weeks ago and came to rest at the midpoint of the heaviest volume range for this this week. All relevant lines from previous days are extended with dashes to act as potential levels of S or R or both.

One might expect traders to fill that gap, or at least move toward it. Absent that, a continued move down. Instead, they form a hinge. At 1000, price falls out of it but reverses before it makes much progress, perhaps finding S at the same level that the opening low did. A test. Then it takes off in the opposite direction, back toward that longer-term midpoint and the opening high. Another test. Having tested both ends, traders take price down to the low of that same volume concentration (the blue line). This price is rejected rapidly and forcefully, leading one to expect that the countermove will be as forceful, particularly given the TICKQ divergence. Instead, price waffles around for 20m before finally advancing.

And here's where it gets interesting.

Ordinarily, one would expect price to travel to R, at which point one could reverse or cash in and go home. But where's R? First price stops at the midpoint. But rather than bust through like it did yesterday, it falls back 10pts. Then it futzes around here for half an hour, finally moving on to the next level of "resistance", the previous day's low, filling the gap. Then to the previous day's close. THEN ALL THE WAY BACK TO THE OPENING HIGH before taking off yet again for the top of the previous day's volume range.

Anyone trading one contract must have been driven crazy trying to figure out what to do, but even those trading multiple contracts would have had to be on their toes. The most logical place to exit would be a point equal to the distance between the midpoint of the opening range and the initial range extension to 1700, i.e., 1730. This point would also serve to fill the gap, more or less. But the only way to rack up those extra 30pts without getting tossed around would be to leave at least one of multiple contracts back where it was bought at 1700 or thereabouts and just leave it the hell alone.

Therefore, the only "error" today was not to have taken the long at 1700. Given the number of resistance levels along the way to 1760, one could have been forgiven for taking profits just about anywhere.

And incidentally, zeon, you're not going to get any comments to your Blog unless you allow comments to be made. See your Blog Control Panel.

Brun, hope you're still getting something out of these.

.

.

[zeon]

	Quote:	DbPhoenix
	Therefore, the only "error" today was not to have taken the long at 1700. Given the number of resistance levels along the way to 1760, one could have been forgiven for taking profits just about anywhere. And incidentally, zeon, you're not going to get any comments to your Blog unless you allow comments to be made. See your Blog Control Panel.

I believe I switched it on though. If somebody has trouble posting to it, please PM me.

As for errors... I make them a lot and not taking a long today was indeed one of them. But if you weren't long - like I - isn't it normal you would expect to take a short at each resistance level on the way up? At least that's what I did, figuring this is a bear market and shorting on rallies is the thing to do right?

Final question: how does all this pan out with the hinge formation you posted couple of days ago. You said the break lower wasn't a good sign. But since that 'break' we've seen nothing but massive buying, on Tuesday and again today.

[heretodaygone...]

	Quote:	zeon
	Final question: how does all this pan out with the hinge formation you posted couple of days ago. You said the break lower wasn't a good sign. But since that 'break' we've seen nothing but massive buying, on Tuesday and again today.

Prolly broke a support line from the year 2000. hehe

[DbPhoenix]

	Quote:	heretodaygone...
	Prolly broke a support line from the year 2000. hehe

If you want me to stop posting charts, I'll be happy to do so. They do take time, and I don't like wasting it.

[heretodaygone...]

	Quote:	DbPhoenix
	If you want me to stop posting charts, I'll be happy to do so. They do take time, and I don't like wasting it.

No not at all, just having a little fun. I've read most of your work and found value in some of it and I can appreciate the time you put into it. Please don't be offended if and when I question some of your posts. After all thats what makes a market.Cheers

[heretodaygone...]

Some longer term context.

http://www.raymondjames.com/inv_strat.htm

http://prudenttrader.com/pt/content/view/479/1/

[treadstone]

	Quote:	DbPhoenix
	If you want me to stop posting charts, I'll be happy to do so. They do take time, and I don't like wasting it.

Db, I can assure you there are many more people here who find value in your posts and charts, than those who don't.

Please continue, you are most certainly not wasting your time.

[namstrader]

Db,

I also find tremendous value with your posts and await anxiously each day for your posts. Because of you I have gone down the path of studying VSA more and more and some day I intend to buy your ebook.

[zeon]

	Quote:	treadstone
	Db, I can assure you there are many more people here who find value in your posts and charts, than those who don't. Please continue, you are most certainly not wasting your time.

Yes, I second that. And heretodaygone..., I've found your two sites together less interesting than any single post dbphoenix has made.