Friday, Nov 20th
* We moved higher during the morning time merchandise on Thursday, staying to a higher house the overnight lows, but thus something interesting happened. Volume fizzled together with nosotros injure upward with a deadening make day. This highlights the importance of tracking book inwards existent time. My favorite way of doing that is with "relative volume": a mensurate of electrical current book versus the normal book for that item fourth dimension of day. Below is a nautical chart for yesterday's relative volume. Values below 1.0 stand upward for subnormal volume. You tin encounter how book became subnormal every bit the twenty-four hours progressed. That agency directional participants are taking the sidelines. And that leads, to a greater extent than oft than not, to make days.
* The possible skilful tidings is that we're getting depression volume, flattish corrections next moves higher off the recent oversold levels. That is consistent with the scenario of testing the recent highs together with has me continuing to purchase weakness that stays to a higher house prior twenty-four hours together with overnight lows. I'm currently working on a suite of innovative bike indicators; every bit y'all tin encounter below, we're coming off an intermediate-term bike depression together with are nowhere well-nigh levels associated with bike peaks.
Thursday, Nov 19th
* The strategy of buying weakness that stayed to a higher house the overnight lows--and thus buying weakness that stayed to a higher house morning time lows--worked good on Wednesday, every bit stocks rallied strongly with the unloose of Fed minutes. We've bounced off oversold levels (see nautical chart below of short-term breadth inwards SPX shares) together with instantly are initiative off to encounter short-term overbought levels. I move yesteryear away along to aspect a seek of recent highs together with aspect to implement yesteryear buying weakness that stays to a higher house cardinal levels.
* The unloose of the Fed minutes led to fresh book entering the market, with well-above levels of book for that fourth dimension of day. Such expansion of book indicates that novel participants ask hold entered the marketplace together with it's cardinal to encounter which way they're leaning, every bit these are to a greater extent than oft than non directional traders running large size. By tracking NYSE TICK, nosotros tin encounter the grade to which the novel book is leaning to the purchase or sell side. When at that spot is a distinct buying or selling bias with these participants, it tin plough what started every bit a fairly normal twenty-four hours into a robust tendency day.
Wednesday, Nov 18th
* We held overnight lows inwards early on merchandise together with moved nicely higher, taking out Monday's highs, but thus cruel dorsum into the make together with ask hold stayed at that spot inwards overnight trading thus far today. The inability to sustain the forcefulness has me treating this every bit a potential bottoming process, which is clearest when y'all aspect at the Russell 2000 Index together with retail stocks (XRT). We are oversold on an intermediate-term basis; I'm looking to purchase weakness that stays to a higher house the overnight lows.
* The aligning of shorter together with longer-term perspectives that I similar is using overnight together with previous day's highs together with lows every bit reference points together with buying weakness that stays to a higher house overnight together with prior day's highs together with lows together with selling forcefulness that stays below highs for the overnight together with prior day's sessions. When keying off levels inwards this way, it's relatively slow to position halt levels. Those levels too assist me differentiate cost activity based on U.S. flows from cost activity based on flows from Asia together with Europe.
* I'm too keeping a unopen optic on commodities. Hard to believe nosotros tin sustain a wide rally if at that spot continues to endure deflationary dynamics inwards markets.
Tuesday, Nov 17th
* Once 1 time to a greater extent than nosotros saw a skilful illustration of how flows inwards stocks are alone dissimilar during side yesteryear side fourth dimension zones. Weakness inwards the index futures when they opened for the weekend was followed yesteryear buying involvement inwards Asian together with European hours together with thus an explosion of buying at the NY open. The buying occurred on strong NYSE TICK, volume, together with volatility, confirming a rejection of the opening lows together with setting upward an upside tendency day. Here are four things I aspect for inwards an upside tendency day.
* What has worked good for me is viewing each of the major fourth dimension periods (Asian trade, European trade, U.S. trade) every bit split days together with non necessarily expecting continuity from 1 fourth dimension menstruum to another. In a sense, each twenty-four hours offers 3 daytrading periods, with the lion's part of motility inwards U.S. indices occurring during London together with NY hours.
* Buying involvement has followed through inwards the overnight market; my leaning is to purchase weakness that holds to a higher house the overnight lows. As mentioned yesterday, my intermediate term measures had non yet reached typical oversold levels; still, given the thrust of the recent displace higher, my leaning is to purpose whatever farther weakness every bit an chance to buy.
Monday, Nov 16th
* This is 1 of the to a greater extent than of import posts I've written of late together with helps explicate why trying to eliminate our trading mistakes together with bad trading practices is oft the incorrect way to educate ourselves every bit traders. It too helps explicate why the harder nosotros travail to larn disciplined, the less disciplined nosotros tin become.
* Stocks cruel inwards tardily merchandise together with overnight inwards answer to the Paris attacks, but ask hold bounced good off lows every bit I write. As long every bit nosotros pose inwards lower cost highs, I retrieve it's premature to assume we'll rally only because we've been oversold. As the posts terminal calendar week indicated, nosotros ask hold non yet been at oversold levels that ask hold of late corresponded with intermediate-term marketplace position lows, per the nautical chart below that tracks novel highs versus novel lows with the SPX shares.
* My mensurate of pure volatility shows relatively petty spike during this decline compared with the elevated volatility per unit of measurement of book nosotros saw during the August together with September drops. This would endure consistent with a marketplace position making an intermediate term correction rather than an actual fresh comport leg down. My base of operations instance continues to endure a seek of the recent marketplace position highs, but it would non surprise me to encounter quite a few divergences on whatever such test.
* We moved higher during the morning time merchandise on Thursday, staying to a higher house the overnight lows, but thus something interesting happened. Volume fizzled together with nosotros injure upward with a deadening make day. This highlights the importance of tracking book inwards existent time. My favorite way of doing that is with "relative volume": a mensurate of electrical current book versus the normal book for that item fourth dimension of day. Below is a nautical chart for yesterday's relative volume. Values below 1.0 stand upward for subnormal volume. You tin encounter how book became subnormal every bit the twenty-four hours progressed. That agency directional participants are taking the sidelines. And that leads, to a greater extent than oft than not, to make days.
Thursday, Nov 19th
* The strategy of buying weakness that stayed to a higher house the overnight lows--and thus buying weakness that stayed to a higher house morning time lows--worked good on Wednesday, every bit stocks rallied strongly with the unloose of Fed minutes. We've bounced off oversold levels (see nautical chart below of short-term breadth inwards SPX shares) together with instantly are initiative off to encounter short-term overbought levels. I move yesteryear away along to aspect a seek of recent highs together with aspect to implement yesteryear buying weakness that stays to a higher house cardinal levels.
* The unloose of the Fed minutes led to fresh book entering the market, with well-above levels of book for that fourth dimension of day. Such expansion of book indicates that novel participants ask hold entered the marketplace together with it's cardinal to encounter which way they're leaning, every bit these are to a greater extent than oft than non directional traders running large size. By tracking NYSE TICK, nosotros tin encounter the grade to which the novel book is leaning to the purchase or sell side. When at that spot is a distinct buying or selling bias with these participants, it tin plough what started every bit a fairly normal twenty-four hours into a robust tendency day.
Wednesday, Nov 18th
* We held overnight lows inwards early on merchandise together with moved nicely higher, taking out Monday's highs, but thus cruel dorsum into the make together with ask hold stayed at that spot inwards overnight trading thus far today. The inability to sustain the forcefulness has me treating this every bit a potential bottoming process, which is clearest when y'all aspect at the Russell 2000 Index together with retail stocks (XRT). We are oversold on an intermediate-term basis; I'm looking to purchase weakness that stays to a higher house the overnight lows.
* The aligning of shorter together with longer-term perspectives that I similar is using overnight together with previous day's highs together with lows every bit reference points together with buying weakness that stays to a higher house overnight together with prior day's highs together with lows together with selling forcefulness that stays below highs for the overnight together with prior day's sessions. When keying off levels inwards this way, it's relatively slow to position halt levels. Those levels too assist me differentiate cost activity based on U.S. flows from cost activity based on flows from Asia together with Europe.
* I'm too keeping a unopen optic on commodities. Hard to believe nosotros tin sustain a wide rally if at that spot continues to endure deflationary dynamics inwards markets.
Tuesday, Nov 17th
* Once 1 time to a greater extent than nosotros saw a skilful illustration of how flows inwards stocks are alone dissimilar during side yesteryear side fourth dimension zones. Weakness inwards the index futures when they opened for the weekend was followed yesteryear buying involvement inwards Asian together with European hours together with thus an explosion of buying at the NY open. The buying occurred on strong NYSE TICK, volume, together with volatility, confirming a rejection of the opening lows together with setting upward an upside tendency day. Here are four things I aspect for inwards an upside tendency day.
* What has worked good for me is viewing each of the major fourth dimension periods (Asian trade, European trade, U.S. trade) every bit split days together with non necessarily expecting continuity from 1 fourth dimension menstruum to another. In a sense, each twenty-four hours offers 3 daytrading periods, with the lion's part of motility inwards U.S. indices occurring during London together with NY hours.
* Buying involvement has followed through inwards the overnight market; my leaning is to purchase weakness that holds to a higher house the overnight lows. As mentioned yesterday, my intermediate term measures had non yet reached typical oversold levels; still, given the thrust of the recent displace higher, my leaning is to purpose whatever farther weakness every bit an chance to buy.
Monday, Nov 16th
* This is 1 of the to a greater extent than of import posts I've written of late together with helps explicate why trying to eliminate our trading mistakes together with bad trading practices is oft the incorrect way to educate ourselves every bit traders. It too helps explicate why the harder nosotros travail to larn disciplined, the less disciplined nosotros tin become.
* Stocks cruel inwards tardily merchandise together with overnight inwards answer to the Paris attacks, but ask hold bounced good off lows every bit I write. As long every bit nosotros pose inwards lower cost highs, I retrieve it's premature to assume we'll rally only because we've been oversold. As the posts terminal calendar week indicated, nosotros ask hold non yet been at oversold levels that ask hold of late corresponded with intermediate-term marketplace position lows, per the nautical chart below that tracks novel highs versus novel lows with the SPX shares.
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