ant

Jim, I don't use IB TWS, but I will say that IB T&S is not accurate as they aggregate orders together to save bandwidth. For example, there may be two orders with bid size 10 and bid size 23, that could show up in T&S as one entry with bid size 33. So I wouldn't use it for trading since it is misleading. Perhaps others can chime in here if I am incorrect.

Thanks for the explanation. I bet that by filtering that trade using the Taylor rhythm, you also improve its win statistics to something higher than 66% (without filters).

Sorry TinGull, but I don't believe that for a second. Your other posts show just how sharp you are!

Dogpile, I like your twist on the First Cross trade with the Stochastics and the way you line it up with the Taylor rhythm. Very logical. By the way, do you not like the First Cross Sell trade?

As of my last post around 2pm EST, the ES was completing a down auction after bouncing off of the high volume area at 1538-1541. It was not clear to me at that time how low the market would trade, but yesterday's range and value area was right below the market. The ES did trade very slightly into yesterday's range and bounced. A couple of clues in the market structure, at that time, hinted at potentially re-visiting today's high at 1540.25. The two clues came from the day type and the lack of excess at the high. First, the day type that had formed was a Neutral Day. A Neutral Day is a two timeframe market where sellers and buyers take control at the day's extremes and auction the market in the opposite direction. This type of day encounters range extension above and below the initial balance. When the market was trading near its lows around 2pm, it was expected that buyers would enter the market. Secondly, at 2pm when the ES was in a down auction, there was no selling tail at the day's high which indicated less selling conviction (poor daytime high). Once the ES traded through the day's POC, it was expected that a new high would be set. Again, the high volume area provided resistance and the ES proceeded to trade to the middle of the distribution making the day type a Neutral-Center Day. Attempted direction is not clear, but the day's profile still lacks a selling tail. It's plausible that the ES will trade back up and maybe take out the high volume area the next time. I'll wait until the market tips its hand before establishing a bias. However, I will note key reference areas for tomorrow's trading session. The chart below contains the TPO chart for the discussion above. The chart below shows the composite profile with today's trading for reference. As most of you know, I am almost a pure Market Profile trader because auction market theory is what really gives me the confidence to "pull the trigger" on trades. Although indicators do provide me with confirmation some times, I could never trade based solely on them. I am curious if others find this type of market analysis of interest. If there isn't that much interest, I can be less verbose and just provide a brief summary of my analysis.

Thus far, the ES traded up to the high volume area and then reversed and is still working it's way down. Next stop... yesterday's value area.

Yeah, Weinstein's book is one of the best I've read.

Yes, well put Reaver. And since you're constantly adapting to the markets, you don't have to worry about your system no longer working at some point in the future (assuming you have a robust discretionary methodology to begin with).

I thought we might analyze the ES market in a different way and see if taking this bigger picture approach coinsides with others' thinking about potential future market activity. I would like to see if there is any interest in discussing the ES market within the context of what Steidlmayer calls the four steps of Market Activity, which basically describes the steps of going from a balanced market to a trending market and then back to a balanced market. The four steps of Market Activity (as described in Steidlmayer on Markets) are: Step 1: Series of prices in one direction. Step 2: Trade to a price to stop the market. Step 3: Develop around that stopping price. Step 4: Move to efficiency (retracement). I have attached two charts which area hopefully self-explanatory. According to the second chart, if my breakdown of the 4 steps is accurate for the ES, the ES is currently in step 3, which means that the ES may trade between the high volume area between 1538-1541 and today's low (buying tail) around 1520 prior to moving to step 4. This also agrees with Dogpile's high volume areas that he posted earlier.

Man, we traded in this range practically all day. Very boring trading day. One small trade today and that's it. Never really got a trade opportunity. We traded up to 1531.25 a little after 4pm EST, but I didn't take the trade because it was too late in the day for me.

I hear you and would agree that price can migrate in any direction at this point. So you think odds are that we'll have a Normal Variation Day and that the day's extremes have been pretty much established? This is a very real possibility for today based on the odds.

As you pointed out Dogpile, value is being built lower. This is bearish on a longer timeframe. If the ES trades above value, I will probably look to short. Things can change, but I'm looking for a short below 1524 or a short at 1531 or so.

According to Market Profile, control has transitioned to the seller.

If the ES starts to trade below 1526, that would be a preliminary signal that control is transitioning to sellers. Confirmation is provided when the next time period (F) prints below 1526 accepting those prices.

Took small short scalp trade at 1528.50 and bought back at 1527. Only one contract to test the waters so couldn't scale out.

Higher timeframe (15 min) is at 20min EMA, closed gap, and went up on lower volume. Not looking too promising for the long side. We may chop around here between 1524 and 1530. We'll see...

Yeah Tin, I'm seeing that too.

If price gets above 1528-1531 with some conviction, I will probably look to get long.

Could see trend reversal and possible First Cross Buy. A lot of paper buyers this AM. There is resistance at 1528 that we would need to get through.

Agreed. A few extra points would be great! I will continue to post during the day.

Dogpile, missed your presence yesterday. Your charts put the day's action in perspective. I like comparing your interpretation of market action with mine. I use it to grade my trading performance for the day.

Generally speaking, I'm going to go with the trend and sell rallies.

If you think Mind over Markets is boring, good luck trying to get through that CBOT manual. :o

I primarily look at range extension, excess, TPO count, and rotation factor for determining attempted direction. If any of these conflict with each other, then I deem attempted direction as "not clear" and simply conclude that the market is balancing. I then use other MP indicators to determine market performance. These are all covered in Mind over Markets and Markets in Profile. I go through these in my daily preparation to achieve come consistency in my approach, since it is mostly discretionary. If it was a trend day, then direction is obvious and this "attempted direction" assessment is not required, but I still look at market performance.

That's a good question. I would trade against both distributions. The market has a tendency to fill in the low volume areas (forming a rough bell curve) before breaking out of that balance area. I use the Rotation Factor as one of my indicators for determining market direction. Today's RF was -7 indicating more selling.