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Soultrader

[MP] Trading with Market Profile

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Due to the highly successful VSA thread, I would like to also start a thread dedicated entirely for Market Profile that covers definitions, market structures, mp concepts, trade locations, pattern recognition, and more.

 

Market profile is perhaps used by only a small percentage of traders with very little educational material available for free compared to other technical analysis methodologies. So let's get this thread started!

 

Recommended Readings

 

  1. Mind Over Markets: Power Trading with Market Generated Information by James F. Dalton
  2. Steidlmayer on Markets: Trading with Market Profile by Peter J. Steidlmayer
  3. Markets in Profile: Profiting from the Auction Process by James F. Dalton

 

Things To Keep In Mind

 

The concepts and terminalogy covered in this thread may require you to have a basic understanding of market profile. There is a free pdf file available from the CBOT which you can download here that brushes this topic but I highly recommend to read the 3 books listed above.

 

Important terms:

 

  • Initial Balance (first 60min range)
  • Value High or VAH
  • Value Low or VAL
  • POC, VPOC
  • One-time auction
  • Extremes/Rejection

 

Day Types: Profile Pattern Recognition

 

1. Nontrend Day:

 

A nontrend day occurs when there is no conviction by the longer term market participants. Day traders are the only ones providing liquidity with volume being light and range being small. Lack of confidece expressed by the longer term traders causes markets to be contained within the initial balance (first hour range) as an extension of price is less likely. Traders with a view longer then the day trader see no opportunity/advantage at these price levels.

 

Below are a few examples of a nontrend day.

 

attachment.php?attachmentid=4614&stc=1&d=1198757841

 

attachment.php?attachmentid=4615&stc=1&d=1198758619

 

2. Trend Days (2 types):

 

Trend Day

 

A trend day occurs when there is a high level of cofidence expressed throughout the day. Larger time frame market participants must be active in order for any trend day to occur. The market is in full one-time control. One-time control refers to an auction process of continously higher lows/higher highs or lower lows/lower highs. Each 30minute price action will auction higher/lower than the previous 30minute price action. This should continue until the close.

 

A strong trend day will usually leave the opening price near or at the high/low for the day. Below are a few examples of a trend day.

 

attachment.php?attachmentid=4616&stc=1&d=1198759682

 

attachment.php?attachmentid=4617&stc=1&d=1198759682

 

Double Distribution Trend Day

 

A double distribution trend day occurs when trading is light during the day followed by a sudden expansion of the initial balance by the longer term market participants later in the session. This one-time activity usually occurs into the afternoon session. This sudden change can be caused through fundamentals, news, economic reports, or just plain supply or demand.

 

Below are a few examples of a double distribution trend day.

 

attachment.php?attachmentid=4618&stc=1&d=1198760300

 

attachment.php?attachmentid=4619&stc=1&d=1198760300

 

3. Neutral Day

 

A neutral day occurs when longer term market participants express opposite views amongst each other. In other words, range extension may occur both above and below the initial balance with minimal price change for the day. Both sellers and buyers are present in a neutral day. Because the longer time frame participants do not agree on the same price they trade mainly with the locals or the middleman. In other words, sellers exist above value as they find price to be too expensive while buyers exist below value as they find price attractive. This profile resembles a complete market in balance as all short term and long term traders are involved.

 

Below are a few examples of a neutral day.

 

attachment.php?attachmentid=4620&stc=1&d=1198760913

 

4. Normal Day

 

A normal day occurs when there is a small participation by the longer time frame traders expanding the initial balance by approximately half the range of the IB. So if the initial balance was 60 Dow pts, an extension would be 30pts above or below the initial balance.

 

Normal days have a tendency for active action at the opening hours followed by dull two-sided trading for the remainder of the day. A normal day may also have a wide initial balance indicating a strong conviction by the longer term time frame traders at the open followed by no follow through. The result will lead to price action contained within the initial balance.

 

Below are a few examples of a normal day.

 

attachment.php?attachmentid=4621&stc=1&d=1198761445

 

attachment.php?attachmentid=4622&stc=1&d=1198761551

 

5. Normal Variation Day

 

A normal variation day occurs when the other time frame market participant steps into early in the day to upset the initial balance. The range extension is usually double the initial balance. So if the initial balance was 40 Dow points, the range extension would be roughly 80 pts above or below the IB.

 

The extension causes value area to move higher/lower and is followed by two-sided price action for the rest of the day. Below are a few examples of a normal variation day.

 

attachment.php?attachmentid=4623&stc=1&d=1198762063

 

To Be Continued...

5aa70e2eed264_NontrendDayMarketProfileChart.jpg.dfcb84dcdee4c998429bea24c93c05de.jpg

5aa70e2ef2243_TrendDayCandlestickChart.jpg.3aecf302aa0a498ef5c105a44f8102b4.jpg

5aa70e2f020aa_TrendDayMarketProfileChart.jpg.780f8b3a89d5e8f9d7f6e9eb9f4cf454.jpg

5aa70e2f05f2d_DoubleDistributionTrendDayCandlestickChart.jpg.0e3d56bdfa36f2709b90fa8116202609.jpg

5aa70e2f0ded3_DoubleDistributionTrendDayMarketProfileChart.jpg.a5ef466d5629a31840a6d32999dab845.jpg

5aa70e2f125b0_NeutralDayMarketProfileChart.jpg.0209339d408d80f5b95e42acbb0f9f1b.jpg

5aa70e2f167e4_NormalDayMaketProfileChart1.jpg.8736be60e7fc57c99f247759f3591cac.jpg

5aa70e2f1af6e_NormalDayMaketProfileChart2.jpg.bbd315237afbe341d37f78ff57814c34.jpg

5aa70e2f1e9fd_NormalVariationDayMarketProfileChart.jpg.2bdca71b613532af9e93453ca6011fe4.jpg

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Market Profile Concepts

 

Initial Balance - Initial balanace refers to the first 60minutes of trading. This time zone is possibly the most important time period as it offers clues to what sort of market one can expect.

 

A and B period in the chart below shows the initial balance. This term willl continue to come up in the following posts so make sure to learn this key terminology.

 

attachment.php?attachmentid=4628&stc=1&d=1198772270

 

Value Area - A market profile chart plots price as a bell curve. This bell curve is then divided into the first, second, and third standard deviation. The first deviation of this bell curve includes the 68% of the total volume, the second deviation includes 29% of the total volume, and the third deviation includes approximately 3% of total volume. See chart below:

 

attachment.php?attachmentid=4630&stc=1&d=1198773696

 

The first standard deviation or roughly 68%-70% of the area where most market action took place is the value area.

 

Point of Control or POC - Point of control is the price level in with the most TPO's. In other words, it is the level in which the markets spent the most time trading.

 

attachment.php?attachmentid=4631&stc=1&d=1198773880

 

TPO or Time Price Opportunity - TPO simply refers to each alphabet plotted. Each letter reprents a 30 min time period. One can count the number of TPO's above and below the POC to determine buying vs selling control for the day.

 

attachment.php?attachmentid=4632&stc=1&d=1198774528

 

Extremes and Tails - Tails and extremes occur as price is swiftly rejected leaving a vertical line of single print TPO's. Tails are key levels in which price may have a tendency to act as support and resistance.

 

attachment.php?attachmentid=4633&stc=1&d=1198774910

 

Range Extension - Any extension beyond the initial balance.

 

attachment.php?attachmentid=4634&stc=1&d=1198775102

5aa70e2f8388b_InitialBalanceExplanationChart.jpg.3af026a96692eea160076f7deeff3ef2.jpg

5aa70e2f87724_Bellcurveexplanation.jpg.a8526eea859b80433ecd81219a8067e3.jpg

5aa70e2f8a30b_POCExplanation.jpg.88c46b6a738fd6e0ec355972dc9305a1.jpg

5aa70e2f8d685_TPOCountExplanation.jpg.3d28f3ff7bcd05c827efe1c1a51fd9f8.jpg

5aa70e2f91495_SinglePrintTailsExplanation.jpg.7a923e983e26d3f382ab66cb62e2a845.jpg

5aa70e2f94e97_RangeExtension.jpg.a91392b210d4d98ac38c1866dc414508.jpg

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Here is an example chart from 12/28/07 for further explanation.

 

First chart shows a regular 30min market profile with A period starting at 9:30am EST. Second chart is the same chart but broken down into TPO segments.

 

attachment.php?attachmentid=4635&stc=1&d=1198776015

 

attachment.php?attachmentid=4636&stc=1&d=1198776015

 

One of the safest ways to trade with market profile is to wait until the Initial Balance has developed. The first 2 periods offers the biggest clues to what type of market we are likely to develop.

 

One of the things to watch for weakness on a price chart would be lower highs. With a market profile chart, the same concept can be seen when a time period is unable to break above the high of the previous 30minute session. Chart 2 illustrates this with the combination of market internals using the $TICK. Hence, in my opinion learning to use market internals as well as other technical tools is extremely powerful when trading with a market profile chart. This combination offers an edge.

 

Chart 3 shows how "C period" high also met resistance from the past 2 session lows and 12/22 high.

 

attachment.php?attachmentid=4637&stc=1&d=1198776443

 

Any short trades from C period high down to 13550 would of offered great opportunities. Why not play the break of the initial balance? I personally do not play breakouts of the IB. I prefer to wait for a retracement back towards a high of a earlier TPO segment. For example, in the same day if one missed a trading opportunity to the short side a second setups occurs at E and F period.

 

attachment.php?attachmentid=4638&stc=1&d=1198776863

 

Price can not reverse until one-timing auction is cut off. So best to trade with the trend until this happens.

5aa70e2f98639_Dec.282007Chart1.jpg.8df28fda6f72a7cb50e6bb71cae66155.jpg

5aa70e2f9cb23_Dec.282007Chart2.thumb.jpg.d9e6f6694e2665031e4e1b221d790657.jpg

5aa70e2fa17fb_Cperiodresistance.jpg.3f5e00fbafdc4ec1f5d16a874f4baafe.jpg

5aa70e2fa5196_EandFperiodDec.282007.jpg.66725e6aad3d6571458ed81103a25063.jpg

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One of the most important element with market profile is the value area. It is important to ask questions like:

 

  • Are we likely to trade above/below value today? If so, why? If not, why?
  • Can we expect price to remain in the previous days value area or range?
  • Which way is the market trying to auction? Is it doing a good job getting there?
  • Is the price break above/below the initial balance valid? Are we likely to see longer term participants step in to sustain this breakout move? Why or why not?
  • Are we seeing two sided market action?
  • Are we likely to see price pushed back into the initial balance?
  • Was the move above/below the initial balance a rejection pattern?
  • Which way are the markets likely to test first?
  • What does the opening price action tell me?

 

The point here is that the markets need good activity to move away from the previous day value and to trade away from the initial balance. If there is nothing that hints out any range extension, you can expect price to return to value. This is the most important concept of market profile in my opinion. Understanding this simple concept will help find good trade locations built around this concept.

 

For example on Dec. 27, 2007 former Prime Minister Benazir Bhutto of Pakistan was assassinated. The futures market reacted negatively on this news causing price to decline premarket.

 

attachment.php?attachmentid=4639&stc=1&d=1198777699

 

My first reaction was that the Asian markets may gap down and open lower because of political unstability and chaos in the Asian region. This may impact the US markets as well due to the tight correlation. Next, I asked are we likely to create value placement lower compared to the past two sessions? I had a fundamental reason for lower value placement. Now I needed technical evidence to place any short trades.

 

attachment.php?attachmentid=4640&stc=1&d=1198777925

 

Thus I am holding a bias first but with confirmation through price action and trade location through market profile.

 

The Slip

 

The slip is what I like to call when price breaks out of the initial balance just to be rejected. In other words, the initial reaction to push price out of the initial balance or value area was wrong. Now we are likely to rotate in the opposite direction. The slip is so common that this is one of the reasons I do not trade momentum IB breakout plays.

 

To be a good market profile trader, I think one needs to have keen intuition on these slips. Are you seeing buying interest above the initial balance? Are you sensing diminishing demand and weakness? Fading these breakouts takes courage but is one of the most profitable setups one can take. If you short above value, you are simply responding to expensive prices relative to the previous day value. If you are buying below value, you are responding to cheap prices relative to the previous day value. This is responsive activity.

 

Initiative activity on the other hand is buying above the previous day value area or selling below the previous day value area. The reason you would be buying above value is because you sense a shift in market balance and higher value placement. Vice versa for selling below value.

 

The most important thing to remember is: Is the market you trade a responsive or initiative type market?

 

To be continued...

5aa70e2fa85ee_Marketreactiontonews.jpg.5f99913f313a2ae6fdcb8032caf82bf1.jpg

5aa70e2fabe7d_TechnicalConfirmation.jpg.3bb35a21e5c09d01026065a778998084.jpg

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I am very excited about this thread. I am about to enter into a MP "educational phase".

 

Would you adivse reading the books in the order you listed them above?

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I am very excited about this thread. I am about to enter into a MP "educational phase".

 

Would you adivse reading the books in the order you listed them above?

 

Yes, I would recommend to read in that order. Mind over Markets is the easiest to understand of the three. Steildmayer will help you add further insights.

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Great stuff James.

I totally agree with $TICK and MP as a good combo. One thing I've noticed is that if price is inside the value area, if it takes extreme tick readings to move price to the top/bottom of the value area than it may setup a nice $TICK fade trade. I love Dalton's idea that volume slows price down, which makes perfect sense if your looking at volume by price. Its almost as if the market runs out of firepower to push through the value area if it takes extreme $TICK readings in order to get to the top.

Something that might make for an interesting discussion is with using composite profiles across multiple days, how far back to go, how can we quantify when market conditions have changed enough that past auction information for the same price area is no longer relevant.

 

Also, I thought Ant said Dalton has a new book coming out next year. Anyone know anything about this?

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Wow. Very nice stuff Soul thank you.

 

No problem. Thanks to the VSA inputs as well. Ill get into identifying trade location with market profile then going into VSA for entry decision making.

 

thanks again soultrader!

 

yw, feel free to post any questions you have on mp. I dont follow it by the book but have my own way of interpreting it.

 

Also, I thought Ant said Dalton has a new book coming out next year. Anyone know anything about this?

 

His latest book was Markets in Profile which came out early this year I believe. I dont know of any other book to be released by Dalton yet.

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Here is a sample chart of Dec. 28, 2007. The chart shows the past few session market profiles with explanation.

 

The left hand side shows 4 day activity of markets auctioning below the current value area. This area of congestion is labeled Bracket 1. On Dec. 22, the markets gapped up higher and created higher value placement. This shift in market balance on the 5th day of trading is significant with A period leaving a single print tail. This level will be a key support level.

 

Also in Bracket 1, we have an area of confluence shown by the overlapping value low pivot line. Any break below the single print tails will cause price to enter into a previous value/congestion area. This confluence of the value low pivot will be a key support line.

 

Now shifting to the right hand side of the chart, 12/25 - 12/27 shows a 2 day overlapping value area. 12/28 was rejected in this value area to drop lower into the area created on 12/22. There was also fundamental reason behind this move due to the assassination of former Prime Minister Bhutto.

 

attachment.php?attachmentid=4646&stc=1&d=1198849113

 

Strategies with Market Profile & Other Technical Tools

 

We can now build a strategy based on what the markets is showing us. Questions to ask: Are we ready to move into higher value area created on 12/25 - 12/27? Or are we likely to remain inside of value created on both 12/22 and 12/28? Or are we likely to move into lower value placement inside of Bracket 1?

 

Answer: All of the above. (who knows?)

 

So using the 3 questions above, where can we establish trade points? First, if we assume price to break higher into 12/25 - 12/27 value area we can look for a break above A period from 12/28. In other words, we need to determine if buying exists above the 13600 mark. Are internals strong? Is volume increasing? If yes, we can then look for a long setup above this area. VSA techniques on a pullback to this area can be applied.

 

If we assume price to remain inside of value created on 12/22 and 12/28, we can look for short setups inside the resistance area of 13580 - 13600. Once again, you can wait for VSA setups at this level.

 

A reference point one can use to gauge strength vs weakness could be the overlapping POC on 12/22 and 12/28. Thus a downward bias may allow a trader to look at the 13500 level for any VSA or other setups. Also again at the 13400 level (below the 12/22 single print tails)

 

After idenftiying the levels you want to play at, one can then apply his own technical methodologies to execute his/her trades. This is how I prefer to combine market profile with other technical tools.

5aa70e2fe7dd5_Dec.292007MarketProfileChart1.thumb.jpg.89b6eaf4bf67c41257e6beb2009cdff3.jpg

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great thread, YM today after breaking down from yesterday's poc we tested the previous merge upper edge at 13370 and price was quickly rejected great place to buy . Ill post a chart if I can figurue out how.

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How To Play Single Print Areas

 

Single print price levels indicate swift price rejection due to the lack of time spent at that price level. These areas are good future support and resistance reference points. Chart shows Jan. 2 - Jan. 3 YM price action. Notice the beginning of the single print trail in "B" period.

 

attachment.php?attachmentid=4656&stc=1&d=1199452123

 

Janurary 3rd, 2008 Market Profile resemebles that of a neutral day. Both upside and downside IB range extension occurs on a neutral day in which longer term traders are expressing conflicting views amongst each other. Notice the IB range extension is equivalent both to the upside and downside with a close in the middle of the range.

 

attachment.php?attachmentid=4657&stc=1&d=1199452504

 

What is signficant about knowing the type of day?

 

Understanding what type or types of day the market is showing is important as one can design strategies around it. A neutral day indicates no victory for both bulls and bears. This offers fading type strategies for 1/04/08.

 

Steidlmayer puts "This indecisiveness of the buyers and sellers also creates the self-fulfilling prophecy of neutral days begetting neutral days."

 

Key levels I will watch is the previous day high and single print starting level shown in the first chart. Downside support will be previous day low and 1/02 VAL. The idea here is to fade any push out of value. However, this is just one strategy based on one scenario. If the markets prove you wrong, it is important to snap out of your bias/ideas and go with the language of the markets.

 

I am slightly bearish though due to the reaction of the Nikkei today breaking a very very key support level of 15,000.

5aa70e301af87_SinglePrintLevelsonMP.jpg.9d07b148c20a515722542c6f6feb7bef.jpg

5aa70e301f246_NeutralDayMP.jpg.545d9cb3856799603063dd194573c78e.jpg

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James, thanks for the thread. I have a ton of questions but I don't really know how to ask any of them. I know Darthtrader uses MarketDelta for his MP charts, but is there anything else that you would recommend? Does anything work with TradeStation?

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James, thanks for the thread. I have a ton of questions but I don't really know how to ask any of them. I know Darthtrader uses MarketDelta for his MP charts, but is there anything else that you would recommend? Does anything work with TradeStation?

 

Hard to say as the only MP tools for TS I used was a version written by Ant from the forums. Unfortunately this is no longer available. I use esignal for all my charts now with MP costing me $50 or additionally a month. I recommend it as it is fairly user-friendly and simple to use.

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I think we are pretty limited software wise with MP because anyone who puts it out has to pay the monthly CBOT fee. Its probly just too much of a headache to bother with.

With tradestation I still think the best option is to get ninjatrader which is free, feed TS data and then get the finalg version for $250 one time fee.

http://fin-alg.com/tpoandvolumechart.html

He just seems to be ignoring the cbot fee.

Marketdelta's MP chart is just a partnership with investors r/t, its exactly the same thing you get with investors r/t. I tried to find every option available and those + esignal are the only real options but your going to have to pay for this service one way or another.

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He just seems to be ignoring the cbot fee
I think you ignore the CBOT and or TS at your own peril. Just look at the recent episode with the new $55/month CBOT fees at TS. They cut you off and even with the new feed, live or delayed, it is still unreliable. https://www.tradestation.com/Discussions/Topic.aspx?Topic_ID=72109

The finalg looks like a good product, but it is still code protected and server side verified (if finalg's verification failed or is taken down by CBOT, you will have no function). Just a caveat emptor. If you have access to some of the published MP code and do some studies, you should have a reasonable fascimile of what other MP traders are seeing.

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Chart from January 4, 2008:

 

attachment.php?attachmentid=4669&stc=1&d=1199669702

 

Profile resembles that of a Normal Variation Day in which the range extension is double the initial balance. Notice how range extension from C period down to K period is almost the same as the range of A-B period.

 

Normal Variation Day indicates 30-40% market activity controlled by loger time frame market participants. "b" shaped profile hints of long liquidation. Key question will be "Is the short term selling temporarily over?"

 

IB Rejection vs Acceptance

 

Knowing the type of market you trade whether it be reponsive or initiative is important in developing strategies under the IB breakouts. The chart above shows multiple attempts by D-J period to trade back up into the initial balance. However, price is rejected creating lower value placement. Price acceptance below the initial balance is showing further weakness.

 

My bias will remain for price to trade in this newly developed value area so will look for short opportunities above value. Will post a few charts later as the markets open to show possible short setups.

5aa70e305d764_bshapedprofile.jpg.070beaeb4443f40b44120a863afee386.jpg

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What would the MP chart look like for the NQ? The NQ has sort of been in a box play for the last two months and just broke support, I'm curious if that would show a shift in value on the MP chart as well?

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What would the MP chart look like for the NQ? The NQ has sort of been in a box play for the last two months and just broke support, I'm curious if that would show a shift in value on the MP chart as well?

 

Do you have access to MP for NQ? I dont subscribe to CME at the moment so cant pull up a chart. I just subscribe to CBOT, NYSE, and the Japanese markets at the moment.

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No, I don't actually. I don't actually trade the NQ I was just curious how a MP structure would look after a range bound breakout like that. But judging from the look of the candle it looks like an open-drive day since it opened and pretty much tanked. I guess I could always put together an MP chart in excel?

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No, I don't actually. I don't actually trade the NQ I was just curious how a MP structure would look after a range bound breakout like that. But judging from the look of the candle it looks like an open-drive day since it opened and pretty much tanked. I guess I could always put together an MP chart in excel?

 

An open test drive will test one direction for supply or demand before reversing. Perhaps you can pull up a NQ 5min chart for me?

 

I used to plot MP in excel using a Reuters spreadsheet called PowerPluPro. But that was because I did not have access to a MP charting package. It was a nightmare. I guess you could do it if you can export data into a spreadsheet.

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This is the 24hour chart. Looks like a lot of pre-market movement.

 

Note: times are Mountain Standard, 2 hours behind NYC.

 

attachment.php?attachmentid=4670&stc=1&d=1199677149

 

I wouldnt consider that an open test drive. If you plot the initial balance, you will notice how C period (3rd 30min period) upset the IB. Half hour ranges are directional, in other words each 30min period is one-timing down. Typical of Trend Day profiles.

 

Trend days show that buyers/sellers have used up their energy. You can expect prices to stall a bit and rotate sideways until further directional movemet. Basically continuation strategies should be avoided the followind day.

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James, thanks for the thread. I have a ton of questions but I don't really know how to ask any of them. I know Darthtrader uses MarketDelta for his MP charts, but is there anything else that you would recommend? Does anything work with TradeStation?

 

Here's an MP file from the TS forum that doesn't plot the POC.

 

nic

TPO Pro5.0b.ELd

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    • NASDAQ 100 PRICE ANALYSIS — DECEMBER 1 The Nasdaq 100 (NDX) has rounded off November on a positive note, after the month up by more than 11%. This surge was mainly stimulated by the recently-concluded US Presidential election and the discovery of potential COVID-19 vaccines. These themes were the major dominating fundamental factors through November, as hopes for things to go back to normal (pre-covid) ignited some sectoral rotation. The rotation occurred mainly between work-from-home stocks and traditional businesses, which helped indexes like the Dow Jones (DJIA) and Russell 2000 take the lead from the Nasdaq 100. Nonetheless, the NDX remains in a favorable position as markets enter the close of 2020. That said, stimulus hopes and potential political stalemate in Washington over most of President-elect Biden’s policies could cause the Federal Reserve to maintain its dovish outlook, which would be very beneficial for NDX bulls. That said, it is likely that there are tailwinds present in the equity market ahead of December and 2021. However, there’s the possibility that the NDX could fall into consolidation before we see a continuation to the upside, as the US Presidential election-induced volatility has now been weaned out of the market. Nasdaq 100 (NDX) Value Forecast — December 1 NDX Major Bias: Bullish Supply Levels: 12300, 12370, and 12439. Demand Levels: 12220, 12000, and 11890. The NDX is on an aggressive bullish rally as it inches closer to its all-time high at 12439. At the moment, the 12220 support will likely prevent any sustained decline given the confluence of indicators (ascending trendline and 12220 crucial support) at that level. We expect the NDX to break its previous all-time high and record new peaks in the coming days before consolidation likely sets in.   Source: https://learn2.trade 
    • GERMANY 30 (DE30EUR) IS IN A DOWNWARD MOVE, MAY FALL TO LEVEL 13153.70 Key Resistance Zones: 13600, 14000, 14400 Key Support Zones: 11200, 10800, 10400 Germany 30 (DE30EUR) Long-term Trend: Bullish The index is an upward move but it is facing resistance at level 13200. It must have reached bullish exhaustion as it faces rejection. On November 10, a retraced candle body tested the 88.6% Fibonacci retracement. This indicates that the index will rise to level 1.1129 and perhaps reversed. DE30EUR – Daily Chart Daily Chart Indicators Reading: Presently, the SMAs are sloping upward indicating the uptrend. The index is at level 64 of the Relative Strength Index period 14. This indicates that it is in the uptrend zone and above the centerline 50. Germany 30 (DE30EUR) Medium-term Trend: Bullish On the 4- hour chart, the index is in a downward move. On November 30 downtrend, a retraced candle body tested the 61.8% Fibonacci retracement level. This implies that the index will fall and reach level 1.618 Fibonacci extension. DE30EUR – 2 Hour Chart 4-hour Chart Indicators Reading The market is below the 80% range of the daily stochastic. It indicates that the index is in a bearish momentum. Meanwhile, the 50-day SMA and the 21-day SMA are sloping upward indicating the uptrend. General Outlook for Germany 30 (DE30EUR) DE30EUR is likely to take a downward movement. The index has been trading in the overbought region. Sellers may emerge to push prices down. However, in a trending market, the overbought condition may not hold. That is the pair will continue to rise. Source: https://learn2.trade 
    • Date : 30th November 2020. Events to Look Out for This Week.Europe and US are in the middle of a second wave of Covid-19 infections. The prospect of another hit to the economy in Q4 and emerging lockdown disruptions.still leaves central banks and fiscal authorities in crisis mode, but positive news on the vaccine front leaves investors looking ahead to the recovery. Next week’s focus will remain on the virus, Brexit as the latest and supposedly final deadline, is next Tuesday, OPEC+ group which will also decide on extending prevailing quota restrictions next Tuesday, and on the Non-Farm Payroll outcome. Monday – 30 November 2020   Eurogroup Meeting Non-Manufacturing PMI (CNY, GMT 01:00) – The Non-manufacturing PMI is expected to slowdown to 52.1 from 56.2 in October. Harmonized Index of Consumer Prices (EUR, GMT 13:00) – The German HICP preliminary inflation for November is anticipated to remain unchanged at -0.5% y/y. Pending Home Sales (USD, GMT 15:00) – Pending home sales experienced a minor decline at -2.2% in September after four consecutive months of contract activity growth/ For October we could further decline to -2.6%. Tuesday – 01 December 2020   RBA Rate Statement & Interest Rate (AUD, GMT 03:30) – In the last meeting, RBA stepped up stimulus to ensure recovery by announcing a package of measures designed to secure a rapid recovery from the crisis now that lockdowns have lifted. RBA’s Lowe also stated that he sees no appetite to go into negative rates. The central bank head send a pretty clear signal that the focus now has shifted to asset purchases, with no appetite at the central bank to move into negative rate territory. Consumer Price Index (EUR, GMT 10:00) – Preliminary November inflation expected to remain unchanged at -0.3% y/y in the final reading for September, unchanged from the preliminary release. Core inflation meanwhile declined to 0.2% y/y and while special factors are playing a role, officials clearly are increasingly concerned that the prolonged period of underinflation and now negative headline rates will prompt a more lasting shift in price expectations, which against the background of a sizeable output gap and rising unemployment lifts the risk of real deflation down the line. Gross Domestic Product (CAD, GMT 13:30) – Canada GDP results for the Q3 are seen to be slowing down, at a yearly rate of -39.6% compared to 38.7% last month. ISM Manufacturing PMI (USD, GMT 15:00) – US manufacturing PMI is expected to fall to 57.5 in November from a 2-year high of 59.3 in October. We’re seeing a modest November pull-back in available producer sentiment measures to still-elevated levels, as output is continuing to rise in the face of plunging inventories and rising sales, with limited headwinds from delayed stimulus and continued virus outbreaks. Fed’s Governor Powell testimony (USD, GMT 15:00) Wednesday – 02 December 2020   RBA’s Governor Lowe speech (AUD, GMT 00:00) Gross Domestic Product (AUD, GMT 00:30) – GDP is the economy’s most important figure. Q3 GDP is expected to confirm slowdown to -7.8% q/q and -7.2% y/y. Retail Sales (EUR, GMT 07:00) – German sales are anticipated to have fallen slightly to -0.8% in October, compared to -2.2% m/m in September. ADP Employment Change (USD, GMT 13:15) – The ADP Employment survey is seen at 500k for November compared to the 365K in October. Thursday – 03 December 2020   Trade Balance (AUD, GMT 00:30) – Australian retail trade is expected to see a strong decline in August, at -8.5% y/y from the downwards revision in June at -2.9% y/y. Retail Sales (EUR, GMT 10:00) – Retail Sales dropped -2.0% m/m in September, more than anticipated. It left the annual rate still at 2.2% y/y, indicating a pick up compared to the same months last year, but different sales season amid the pandemic distort the picture and the annual rate is actually down from 4.2% y/y in the previous month. ISM Service PMI (USD, GMT 15:00) – US Markit October services PMI was revised up to 56.9 in the final read versus 56.0 in the preliminary. It’s the best reading since April 2015 and is a third month in expansion. In November the ISM Service PMI is seen at 56.4. Friday – 04 December 2020   Retail Sales (AUD, GMT 00:30) – October’s Retail sales could be improved by 1.6%, following a -1.1% September loss. Non-Farm Payrolls (USD, GMT 13:30) – Expectations are for the headline number to be around 750k in November, after gains of 638k in October, 672k in September. The jobless rate should fall to 6.8% from 6.9% in October, versus a 14.7% peak in April. Average hourly earnings are assumed to rise 0.1% in November, with a headwind from further unwinds of the April distortion from the concentration of layoffs in low-wage categories slows. This translates to a y/y gain of 4.2%, down from 4.5%. We expect the payroll rebound to continue through year-end, though the climb is leaving a net drop for employment for 2020 overall. Employment Change & Unemployment Rate (CAD, GMT 13:30) – Canadian data coincides with the USA release today with dire expectations for a slight deduction in Unemployment to 8.8% from 8.9% last month and a rise from the 83.6 in October for employment, to 100k. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date : 27th November 2020.FX Update – November 27 – Sterling in FocusGBPUSD, H1Narrow ranges have been prevailing in risk-cautious trading. The USDIndex settled around the 92.00 level, above yesterday’s 12-week low at 91.84. EURUSD remained buoyant but off from the 12-day peak seen yesterday at 1.1942. Cable also held within its Thursday range. USDJPY ebbed to a four-day low at 103.91. The Yen was concurrently steady versus the Euro and the Pound, but posted respective two- and four-day lows against the Australian and Canadian Dollars. AUDUSD ticked fractionally higher, which was still sufficient to lift the pair into 12-week high terrain above 0.7380. NZDUSD posted a new 29-month peak at 0.7030. USDCAD remained heavy but just above recent 17-day lows. Bitcoin, which performed strongly this year on the back of dollar liquidity, found a toehold, but remained over 12% down on its recent highs.US markets will reopen after yesterday’s Thanksgiving holiday, but market conditions will remain on the thin side. President Trump said that he will leave the White House if the Electoral College votes for Biden, which may be as close to formally conceding the election as he will go. A sharp focus remains on EU and UK talks, with a face-to-face round reportedly taking place in London over the weekend. There are now reports that the EU parliament might convene as late as December 28 to ratify a deal, if necessary.The spectre of a no-deal hangs over proceedings, though the consensus, as judged by the ongoing stability of the Pound, remains for a narrow deal to be reached.Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date : 26th November 2020.Brexit endgame remains in sharp focus!The USD has remained soft in quiet conditions, while global asset markets have seen little direction. The US Thanksgiving holiday has quelled activity. Europe’s Stoxx 600 traded near flat. Most stock markets in Asia gained, though remained off recent highs. The MSCI World Index is also off its highs, but remained buoyant and on course for a record monthly increase this month. Copper posted a new near 7-year high, and while other base metal prices were also underpinned most remained off recent trend highs. Oil prices saw modest declines after recent gains, which culminated in a nine-month high yesterday.The Brexit endgame remains in sharp focus!Sterling has seen limited direction, continuing to hold gains from month-ago levels of around 1.5% to 2.5% versus the Dollar, Euro and Yen. There is still no breakthrough in down-to-the-wire negotiations between the EU and UK, and there are lots of warnings of border chaos and, from external BoE MPC member Saunders, of long-lasting economic consequences in the event of a no deal exit from the common market.European Commission president von der Leyen said “we are ready to be creative” to get a deal while repeating that “we are not ready to put into question the integrity of the single market.” An Irish government member said that a deal was “imperative” for everyone.The steadiness in the Pound, the principal conduit of financial market Brexit sentiment, reveals that investors remain unperturbed. One explanation is the real money participants are sitting on their collective hands, positioning for an expected deal but waiting on concrete developments and details, while maintaining vigilance on the possibility of there being a no deal by accident.Short-term speculative participants, meanwhile, don’t seem to have had a fruitful time in trying to play the fatiguing myriad news headlines and endless deadlines that have come and gone. The latest and supposedly final deadline, is next Tuesday — December 1 — which leaves just one month for a deal to be ratified on both sides of the Channel. We expect to a deal to materialize at the last minute, just as the withdrawal agreement was seemingly pulled out of the hat at the ultimate minute a year ago. There may even be a fudged extension.Pressure on the UK government is intense. US president-elect Biden warned London that the scope for a deal with the US would be compromised if there is a return of a hard border on Ireland — which is what could happen in a no-deal scenario (the UK government would have the choice between maintaining a free-flowing border on Ireland at the price of breaking up the border integrity of the UK, and possible protests and even violence from loyalists, or breaking the EU withdrawal agreement, which would result in a hard Irish land border).A leaked Whitehall document warns of a “perfect storm” of chaos in the event of a no-deal in the Covid-19 era. There are also pressures on the other side of the Channel to reach an accord. While French President Macron has political incentive to put up a show of fighting over fishing rights, he is not likely to carry through on his threat to veto any deal as other key EU states don’t see the UK’s position on fishing as being unreasonable. France and other nations, and the UK, also need to maintain good relations for security and many other practical reasons.As for the market impact of a deal, much will depend on how narrow the deal is. The narrower it is, the bigger the negative impact on both the UK and EU’s terms of trade positions will be on January 1, particularly the UK’s.Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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