ES Trading For 9/17 + Rest of Week

[Dogpile]

ant, the only reason I am still posting here is because you did a few of these ES summaries and I got a lot out of reading your posts so I was hoping you and I could collaborate more and maybe some other Dalton/LBR/Taylor type of disciples will join in too...

<<Where did you get the 'TVOL Comparison' indicator?>>

its just simple, 78 5-min bars in a day so it compares em (note it will be wrong on a holiday-shortened day):
--------------
value1=(c-c[78]);

Plot1(value1, "VolSum");
----------------------
----------------------
<<Another question, in your chart above, you show a bear flag, did you trade that bear flag because price was below VWAP or do you look at the wave structure in the 2min chart to set your bias? I'm assuming that your bias may change throughout the day. Is that correct? Thanks.>>

Ant, very interesting question because you don't even know how long and hard I have thought about this type of dilemma. Do you go long on weakness or play a bear flag for another push down?

You are building HIGHER value (higher timeframe is pushing market up) but the market breaks below VWAP (lower 'daytime' timeframe players have begun pushing price lower than value. Now you are in a conflicted situation. On the one hand, you can buy with good location on a bullish day if you go long. On the other hand, the market might just be beginning a 'down auction' and pulse down again and again and trap the earlier buyers.

The short answer is that I did NOT take the 2-min bear flag -- although in retrospect that was the right trade. I don't know if it was a good ODDS trade but it was right nonetheless on this particular day. I was not looking to short today. But the break below vwap after a clean 'balance' (PVP=VWAP=price) is a warning sign to be careful on long side. The thing that threw me into confusion today was the bizarre action at 1546.00.... I haven't seen volume build like that before. You had a selling tail above and a huge wall at 1546.00 to get over --- so the structure was kind of difficult to be long except from well below 1546.00 -- as you stated in your intraday post.

Now clearly if VWAP was lower than previous day, I would have aggressively shorted on that bear flag.

--------------

<<I'm assuming that your bias may change throughout the day. Is that correct?>>

Lately, I have only been only taking super-clean trades -- where VWAP vs VWAP[1] and the pattern (flag, ABC, anti) are in the same direction.

The frustrating thing is like what happened today... I eventually got the long-pattern to go with my long bias. it was a 'buy-anti' but I missed filling by a single tick only to watch it march higher by 9 pts back to 1546.00 --- which clearly would have been the 'test' to exit on... I really have been screwing up a lot of trades lately.

in terms of wave structure, I am watchting the 400tick, the 800tick and the 5-min 3/10/16 oscillators. I also watch the 2-min chart but just for trade management --- I don't watch any oscillator on that timeframe. I also love the 15-min chart -- particularly the first cross pattern. We have a First Cross sell that set-up late today.

[ant]

Dogpile, thank you for your thorough response. I really do appreciate it!

I too benefit from reading other people's posts so I will continue to collaborate with you and others if there's still interest.

Throughout the day, I watch the 400T, 1600T, 5min, 15min, and 30min charts. I use the tick charts because they form some really clean patterns on the 3/10 oscillator and tick charts also allow me to set tighter stops compared to time charts. I use the time charts because I like to look at volume. Momentum and volume are the two key indicators that I look at. I also wtach the 30min chart for the Market Profile stuff and annotate one chart with key reference areas. Lately, I've been paying close attention to the developing Market Profile as well. I feel I still need to simplify my setup, but I'm not willing to get rid of any of these charts yet. Over time, I hope to keep the higher timeframe charts, such as the 15min and 30min, and use a tick chart for fine-tuning my entries.

One thing that I have been struggling with lately are my entries. Not necessarily looking for long or short trades, but instead determining how to enter. Should I enter a limit order ahead of time near support/resistance or do I wait for confirmation (i.e., wait for current bar to take out or close above/below previous bar)? This causes me to hesitate pulling the trigger at times. As a general rule, I think I am going to start waiting for confirmation. I think this improves my entries and allows me to set better stops.

EDIT: I forgot to mention that I also look at Time & Sales.

[ant]

The following charts highlight the key reference areas I'll be watching in the ES.

The following daily chart is of the full S&P contract which highlights gaps. Dalton suggests using the S&P contract because the Emini S&P tends to overshoot by a tick or so. Note the gaps above and below today's trading.

SP.GIF

The next chart shows the volume profile for yesterday (9/18) and today (9/19). Note that the volume POC for 9/18 is 1532 and the TPO POC is 1500. The volume and TPO profile will differ notably on trend days like yesterday. Compare the volume profiles with the TPO profiles below. I will be monitoring the volume POC.

ES-VP.GIF

The last chart contains today's profile and the key reference areas. Today was a Neutral Day with trading occurring on both sides of the Initial Balance. The ES closed in the bottom half of the daily range, which means that the sellers were marginally stronger.

ES.GIF

Finally, note that some of the key reference areas overlap making them more significant.

[Blu-Ray]

Dogpile & Ant

Just wanted to say "Thank You" for these threads, your detail in your explanations are great and really help me understand how things are viewed upon.

Sorry I can't contribute, but I don't trade the ES, but your analysis does help me alot, when I look at my instrument (DAX).

I know it might seem it's just the two of you, but myself and I'm sure there are others that are benefiting from your knowledge.


Thanks again

Blu-Ray

[Dogpile]

Market is balancing with VWAP < VWAP[1] (building lower value) --- hopefully this breaks lower and offers an entry to short...

If it breaks up, faces stiff resistance 43-46+ but might be worth a play... Maybe smaller size on a break up if get good entry and full-size if it breaks down with a good entry spot.

[ant]

Hey Dogpile, the ES is perfectly balanced right now, like you said. There are resistance and support areas above and below the market. I think my preference would be for a long position near the selling tail, gap, or 9/18 POC at 1533 or so for play towards 1544-1546 and maybe higher. My preference comes from the breakout on Fed Day which occurred on high volume as well as yesterday's session (with higher value) which also occurred on good volume. I'm thinking of the ES trading yesterday and today as a pause within the uptrend.

[Dogpile]

note JY (yen) is taking off -- have a sell stop to short 36.25 on ES / 818.50 on ER2...

just seems like could carry to downside and scare a lot of late-to-the-party longs who filled at bad prices... if wrong, will stop out for a few pts -- if right, could run to 28-30.

[ant]

	Quote:	Dogpile
	note JY (yen) is taking off -- have a sell stop to short 36.25 on ES / 818.50 on ER2

Really interesting point! Strength in the Yen could spell weakness in US markets.

[Dogpile]

scratch last post... no play...

[ant]

Small trade off the low...

ES.GIF