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Dogpile

Discussion re: Tuesday June 12, 2007

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Market appears to have put in a corrective move up over last 2 days after making new momentum lows on Thursday on the 120-minute timeframe. There was a trending (skinny) market profile that began on Friday afternoon and continued into Monday.

 

The 'up-auction' tired yesterday as NYSE volume was lightest since May 25th and the profile became 'fat' near 1528.00 for S&P's and 1935.00 for NQ.

 

Combining Friday afternoon with all of monday, the Profile has formed a 'P' distribution. A stem of the 'P' indicates short covering AND new buying. The belly of the P indicates that some responsive selling came in at the higher price level. A 'P' is not bearish though by itself, just indicative that buyers and sellers came into balance for a period near 1528.00 -- ending the short-term up-auction that began friday afternoon.

 

Momentum tends to precede price which would imply we will go below Thursdays low at some point due to the 120-min momentum lows put in on Thursday. This may or may not happen but it is important to be cognizant of the various buy/sell pressures.

 

Summation Ticks have moved back up after getting extremely depressed. Summation ticks are a proxy for net buy/sell program behavior. These line up nicely with the 120-min oscillator right now.

 

This morning; the bond market is again getting hit -- helping to send the S&P futures for a large (~7pt) opening gap down.

 

Today is set up bearishly but the market has already traded down. Due to the strong statistical tendencies, I will be patient and will look for a 15-min 20-EMA touch at some point before shorting. Large gaps to start the day indicate the market is out of balance which implies a significant pick-up in volatility.

 

Comments welcomed. Will soon give up on this discussion board if some other traders don't soon join in...

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60-mins in:

 

market takes out 'last hour low' decisively to downside with ES forming a 9.25 point initial balance...

 

the bond market is challenging the (potential) excess low put in on Thursday.

 

Puts were not bought aggressively this morning despite the large gap down -- a harbinger of a potential trend day down.

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test of 15-min 20-ema set up nice short....

 

all action taking place below last hour low....

 

very intersting profile so far... there isn't a ton of bar overlap despite being contained almost entirely within first hour range...

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Interesting day for NQ:

 

Mondays session did not touch Fridays POC despite pretty strong tendency to do so. But that was understandable given the strong afternoon trending profile that occured on Friday afternoon after a coil had formed. This upside momentum continued into Monday (on weak volume) before petering out and Mondays session formed 'value' near 1935.00.

 

Then today didn't look like it would touch 1935.00 (Mondays POC) when breadth was awful and the index was trading near 1914.00

 

What happened?

 

NQ went and touched Fridays POC then went and hunted down not only Mondays POC 20 points higher but ran to yesterdays last hour high, 24 points above the low for the day... NQ is a sick contract...

 

currently, NQ has found a little resistance at Mondays last hour high (to the tick so far).

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its a trend day down on treasuries and will have new closing low -- I do not see wild swings there -- I see classic trend day down...

 

we appear to be building a very large triangle on equities here with major options related influences...

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here was my trade today good for 5 points walter...

 

you are the only sign of life here today so didn't waste time posting it before.

 

NQ+June+12+2007.bmp (image)

 

very interesting market 'structure' today...

 

Dog : what you did there is very similar to our flip trade... where support changed role to resistance... nice trade dog... cheers Walter.

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