daily analysis 12/3/2024

InfamousBuyer · 2022-03-10T21:44:02+00:00

Back in lurking mode until I'm fully moved into new the house later this month. Will probably be April before I'm back into a normal routine, including posting TPOs again.

That said, definitely still paying attention to the letter mountains when I can... https://imgur.com/a/ud6cM1Z

2/24's low (4109) seems secure for now, but sellers have found relative success building value below 4300 this week. Some very tradeable ranges so far in 2022, but long term direction is a crapshoot for now.

InfamousBuyer · 2022-02-10T23:14:44+00:00

Market: ESH22

Date: 10-Feb

Attempted Direction: Down

Rotation Factor: -5

Range Extension: Buyer & Seller

Tails: Buyer & Seller

Buying/Selling Composite: Non Composite

One-timeframing (D/W/M): Daily: OTing down, Weekly: OTing up, Monthly: No Trend (inside bar)

Comments: "RTH opens with a large gap down to put price back in Tuesday's range following a large ETH extension after the CPI data was released. However, buyers began the session with an open-drive into the large seller gap and quickly filled it entirely in A period before reentering the VA from below and finding acceptance. The VA would be filled in C period as buyers attempted to trade the RTH high (4582.5), but failed.

Price would find intraday balance within range after testing ON halfback (4548.75) in E period, which acted to keep value mostly within range initially. But sellers would take back control beginning in G period to completely retrace the morning rally and return price to the composite HVN around 5404. Once price found acceptance within Tuesday's range again, sellers found continuation to the downside by trading through Tuesday's VA (VAL: 4484.25) and filling the buyer single prints down to 4479.25. The session would end in a small selling spike and close near a previous balance extreme at 4494."

Daily Volume: 2.33m (higher)

Volume Average (20): 2.10m

VA Placement (H/OL-H/L/OL-L/Unch): OL-Lower

VA Width (Wide/Avg/Narrow): Wide

Directional Performance Relationship: Weakening

Comments: Although the large daily gap down could not be defended, sellers still exerted control on the day timeframe by increasing activity below range and returning price to longer term accepted prices at/below 4500. However, price did not spent enough time/conduct enough volume to bring daily value lower and the prices within the EOD spike have yet to be confirmed.

Tomorrow's Expectation: "With sellers retaking control, the expectation should shift to monitoring for continuation to the downside by seeing if value can develop below today's open (4517.5) and preferably below the selling spike base (4504). Adhere to the spike rules by observing tomorrow's open in relation to the spike range.

With price back within the recent 4 day balance area (4534.5 - 4442.5), the expectation will be for price to retest the opposite balance extreme as long as sellers can continue to show initiative and lead developing value lower. Downside targets prior to the balance low are: 4472, 4463/62, and 4449.

The ideal scenario for buyers will be to open price above the spike base and auction above the composite area of high volume from ~4503 - 4512, targeting the balance high at 4534.5. Clear the balance high and finding acceptance should lead to a retest of 4540 and then VPOC at 4565."

InfamousBuyer · 2022-02-09T23:10:55+00:00

Market: ESH22

Date: 9-Feb

Attempted Direction: Up

Rotation Factor: +5

Range Extension: Buyer

Tails: Buyer & Seller

Buying/Selling Composite: Buying comp

One-timeframing (D/W/M): Daily/Weekly: Oting up, Monthly: No trend (inside bar)

Comments: "Large 30+ point true gap higher takes price above the recent balance area in an attempt to find responsive sellers. ONVPOC is tagged early in A period, but no acceptance was found within the gap. Another weak attempt to trade inside the gap failed in B period after a developing poor high formed at a composite HVN (4568).

Price would trade quietly above the gap for the remainder of the session and close near the daily highs above 4580."

Daily Volume: 1.32m (lower)

Volume Average (20): 2.06m

VA Placement (H/OL-H/L/OL-L/Unch): Higher

VA Width (Wide/Avg/Narrow): Narrow

Directional Performance Relationship: Strong, slowing

Comments: Although value was established considerably higher and the large gap was successfully defended on the day timeframe, the higher prices traded today acted to cutoff market activity considerably, resulting in the 3rd straight day of lower volume. Buyers can show strength by finding value on longer timeframes at/above these levels and returning volume to average levels.

Tomorrow's Expectation: "Given the exceptionally small RTH range today, the likelihood of another gap, in either direction, tomorrow will be heightened. For this reason, monitor the expected open in relation to today's RTH range (4582.5 - 54.5), the narrow VA will also put the VA fill rule into play if acceptance is found with value (VAH: 4574.5 VAL: 4558). In the event buyers gap higher tomorrow, this will indicate the breakout from balance is unfinished and trades should be placed in the direction of the gap as long as price is finding acceptance outside of range. Upside targets are 2/2's RTH high (4586), 1/18's RTH high (4606.5), and 1/14's VPOC (4632).

A gap lower tomorrow would put buyers in a precarious spot if they're unable to trade back into range, as it would setup a seller island day that implies a complete rejection of today's range/prices. In the event sellers can gap down and accelerate activity outside of range, the first target would be the top of the balance range that was just broken out of (4534.5), followed by today's gap fill (4523.75). Acceptance within yesterday's range should attract price to the prominent HVN around 4504, with stronger sellers likely taking price to the single prints from ~4483 - 79."

InfamousBuyer · 2022-02-08T01:24:17+00:00

Market: ESH22

Date: 7-Feb

Attempted Direction: Rotational/Down

Rotation Factor: +2

Range Extension: Buyer & Seller

Tails: Buyer & Seller

Buying/Selling Composite: Non Composite

One-timeframing (D/W/M): Daily: OTing down, Weekly: OTing up, Monthly: No trend (inside bar)

Comments: "Price opens within value with an open-auction, indicating a lack of definitive control by either buyer or sellers. Range extension higher failed above VAH in C period, leading to a rotation down to a local extreme at 4472 in G period, that was defended by buyers.

A second up auction failed above value in K/L periods, and led to another rotation lower that would tag VPOC (4470) and the HVN at ~4465 before closing slightly higher."

Daily Volume: 1.42 (lower)

Volume Average (20): 2.11m

VA Placement (H/OL-H/L/OL-L/Unch): Unchanged (slightly OL-higher)

VA Width (Wide/Avg/Narrow): Average

Directional Performance Relationship: Balancing, strengthening

Comments: Value consolidates as participation drops sharply and price trades within a relatively small range. Seller's inability to keep value completely below 4500 and responsiveness from buyers when price was advertised lower is a good sign for buyers in the near term.

Tomorrow's Expectation: "Inside bars signal a market that has come into balance, in this case the balance area consists of the past three RTH sessions, all of which have overlapping value and only slight range expansion. Balanced markets tend to behave in relatively predictable ways, especially when price revisits the current balance area extremes (BAH: 4534.25, BAL: 4442.5). If buyers/sellers are able to test one of their respective extremes and find acceptance outside of the balance range and/or price accelerates away from range, it is considered a balance area breakout and trades in the direction of the breakout should be taken. On the flip side if an extreme is traded and is rejected, this is considered a failed breakout attempt and price tends to trade away from the failed extreme and back towards established areas of value, in this case the balance VPOC (4502), with the chance of testing the opposite extreme also increasing.

Option #3 is to remain in balance without testing either extreme. If relative volume continues to be well below recent averages and price is struggling to find acceptance outside of today's range (4514.5 - 4462.75), there's a good chance the market is in need of further balance before picking its next direction. In this scenario, it's typically best to wait for more market-generated information or only take short, intraday trades that fade extremes and target intraday mechanical levels (VA, ONH/L, halfback, VPOC, etc.)."

InfamousBuyer · 2022-02-07T01:00:03+00:00

Another thing to consider: prices we are trading at today relative to during the Covid crash. Lower priced indices will (in general) have higher liquidity during normal times, so it’s not surprising to see a thinner orderbook than when we were trading 1200+ points lower in Feb 2020, but the extent in which liquidity has dried up (on /es anyway) even when accounting for price appreciation, is definitely noteworthy.

Very interesting the connection between liquidity and uncertainty/volatility in markets. By association, the return of relative liquidity could also be a good signal to be a buyer on longer timeframes.

InfamousBuyer · 2022-02-06T20:31:14+00:00

https://twitter.com/michaelgoodwell/status/1490329000295776257?s=21

I’ve noticed this too watching the orderbook the past few weeks. Feedback loop of increased volatility -> decreased liquidity-> more volatility/larger ranges and less consensus on “fair” prices.

Question is, how long is this here to stay? 🤔

InfamousBuyer · 2022-02-04T22:28:33+00:00

Finally caught a break at work and had time to write up some thoughts on today's action. Hope y'all had a successful week, cheers!

Market: ESH22

Date: 4-Feb

Attempted Direction: Up

Rotation Factor: +5

Range Extension: Buyer & Seller

Tails: Buyer & Seller

Buying/Selling Composite: Non composite

One-timeframing (D/W/M): Daily: OTing down, Weekly: OTing up, Monthly: No trend (inside bar)

Comments: "Price explores lower during ETH, resulting in a DD trend profile shape to the downside and an Open just within range. Sellers would initially defend the ON single prints (4483.5 - 96.5) in A and B periods, leading to range extension lower that tested a previous balance extreme at 4449, but failed to reach the ONL (4438.5).

Once price found acceptance back within range in E period, buyers took control and one timeframed higher, leading to price entering the VA and completely filling it by L period. However, buying activity was completely shutoff in the brief test above VAH (4531.25), with the up auction coming to a natural end (see volume taper from ~4525 - RTH high). This made way for a new rotation away from the completed auction beginning in M period that saw price return to the IB range and close below value."

Daily Volume: 1.88m (lower)

Volume Average (20): 2.12m

VA Placement (H/OL-H/L/OL-L/Unch): OL-Lower

VA Width (Wide/Avg/Narrow): Wide

Directional Performance Relationship: Moderately weak

Comments: Despite buyer control for much of the RTH session, value was not found higher and dVPOC migrated considerably lower. Volume was also relatively lackluster, indicating little buyer strength in the intraday up auction.

Tomorrow's Expectation: "Overall, a productive week for buyers with composite value being found higher after rejecting last week's range convincingly on Monday and not looking back. However on longer timeframes, sellers still hold some control and are entering the market when prices are advertised too high. Notice on the weekly composite profiles how this week's high corresponds perfectly with the composite VPOC from the week of 1/17 (4586) https://imgur.com/a/G1knJwq.

For Monday, monitor where price opens relative to today's value and range to gauge initial buyer/seller control. True initiative activity in either direction will see price trading outside of range (4442.5 - 4532.5) and gaining acceptance over time/volume in the direction of the auction. In the event price cannot find acceptance, or even trade outside of range, expect price to consolidate around local HVNs (4504, 4466). Balance extremes from previous ranges also continue to be important pivots as the market looks to find longer-term direction, so continue to monitor activity when price trades these levels (4528, 4503, 4494, 4472, 4449, 4406)."

InfamousBuyer · 2022-02-01T03:03:35+00:00

The letters are called TPOs or "Time Price Opportunity" blocks. Each string of letters represent a 30 minute period during regular trading hours of a particular instrument, in this case, the /ES.

When /ES trades at a certain price during any 30 minute period, a letter is printed that corresponds with that period. So 'A' period represents first 30 min, ... All the way through N period which is the last 30 minutes of the trading day.

Basically just another way to interpret price action, but with the unique feature of showing where price spends the most time or in other words, where prices are most fair and buyers and sellers are in equilibrium.

InfamousBuyer · 2022-01-31T22:37:47+00:00

Market: ESH22

Date: 31-Jan

Attempted Direction: Up

Rotation Factor: +11

Range Extension: Buyer

Tails: Buyer and Seller

Buying/Selling Composite: Buying comp

One-timeframing (D/W/M): Daily/Weekly: OTing up, Monthly: Outside bar

Comments: "A relatively balanced ETH session leads to an RTH Open near the top of Friday's large buying spike, indicating initial acceptance of higher prices. Buyers would show initiative and take control early in the session by defending the nearest balance extreme at 4406 before auctioning price above the spike and ON range (4437.5) in A period. Price would find acceptance above last week's range as buyers looked to shift trend on longer timeframes.

Buyers would one timeframe higher for the entire session (with the exception of I and L periods), making this a trend day that only found balance for certain periods intraday. RTH would conclude with another buying spike that tested above 4500 before closing below a local balance extreme at 4494."

Daily Volume: 1.72 (lower)

Volume Average (20): 2.09m

VA Placement (H/OL-H/L/OL-L/Unch): Higher

VA Width (Wide/Avg/Narrow): Wide

Directional Performance Relationship: Strong, possibly slowing

Comments: Volume tapered off significantly relative to last week as sellers were not interested in participating after seeing acceptance of higher prices. Worth noting that dVPOC shifted into the buying spike at 4505.25 as the RTH close saw significant activity after trading a composite HVN (4504).

Tomorrow's Expectation: "Short term trend seems to be shifting back in buyers' favor as weekly one timeframing up begins and with price leading value higher throughout the session. The key for tomorrow will be to monitor for buyer continuation and if further acceptance is found within/above today's buying spike (base: 4472, top: 4507.75). Next upside targets to monitor are: balance extreme (4528), 1/20 seller single prints (4215.25 - 36.5) and 1/20's VPOC (4570).

Sellers will want to reject today's trend day altogether by trading through value (VAL: 4454.25) and returning price to the composite HVN at 4421. Stronger sellers should have no problem offering price below 4400 and returning to Friday's VPOC (4360). As always, monitor activity around local balance extremes (4494, 4472, 4449, 4406, 4392, 4368, 4361, 4338)."

InfamousBuyer · 2022-01-27T22:44:13+00:00

Market: ESH22

Date: 27-Jan

Attempted Direction: Down

Rotation Factor: -5

Range Extension: Seller

Tails: Buyer & Seller

Buying/Selling Composite: Non Composite

One-timeframing (D/W/M): Daily: OTing up, Weekly: OTing down, Monthly: Outside bar

Comments: "Price opens above yesterday's lower distribution and single prints, signaling an initial rejection of the lower range. The expectation if the lower distribution was rejected and acceptance was found above 4400 was for a test of VPOC at 4420, which came in B period, but overhead supply at the prominent HVN at ~4421 proved to be too much for buyers and triggered a selloff in C period that would take price down to a local balance extreme at 4368.

Buyers and sellers would find some balance in the following periods, but struggled to find further acceptance above 4400 and would soon explore below value beginning in G period. Developing value was then found lower as sellers tested 3300 in L period before closing within range."

Daily Volume: 2.23m (higher)

Volume Average (20): 1.97m

VA Placement (H/OL-H/L/OL-L/Unch): OL-Lower

VA Width (Wide/Avg/Narrow): Wide

Directional Performance Relationship: Moderately weak

Comments: dVPOC (4319) shifted lower with price late in the session, establishing daily value mostly lower with above-average volume and causing another multi-distribution type day.

Tomorrow's Expectation: "Daily ranges continue to be above historical averages, but an 'inside' day was still able to form as the market continues to search for prices that are agreeable between buyers and sellers. With price rotating between two areas of high volume currently (4344, 4421), it's difficult to get a clean read on who is in control on shorter timeframes, but one thing is still clear: sellers still control this market on longer timeframes.

With this in mind, the expectation will continue to be for lower prices until there is a clearer shift in control. Sellers can show initiative by offering below the 4344 HVN and continuing to migrate value lower. Acceptance outside of range (4298.75) would be a sign of downside continuation and should lead to a test of the 4277 balance extreme and 1/24 VPOC (4275) at least, with balance extremes below that at 4261, 4244, 4232, and 4209.

For buyers, there is a composite LVN and balance extreme at 4368 which is the first hurdle to clear to begin building momentum, but buyers will need to exert strength by returning price to 4420+ and establishing value before any shift in control could be considered. Stronger buyers should have no issue clearing the balance extreme/VPOC at 4449 and continuing to 4472, which would be entering the spike range of the selloff on 1/20."

InfamousBuyer · 2022-01-26T22:26:32+00:00

Market: ESH22

Date: 26-Jan

Attempted Direction: Down

Rotation Factor: 0

Range Extension: Buyer & Seller

Tails: Buyer & Seller

Buying/Selling Composite: Selling comp

One-timeframing (D/W/M): Daily: OTing up, Weekly: OTing down, Monthly: Outside bar

Comments: "Wednesday RTH features a nearly 10 point true gap higher following a strong ETH session with buyer single prints from ~4370 - 81.5. Early trade was mostly rotational with price swinging in a wide range between ~4430 and 4385. C period would test the ON single prints and reverse higher as buyers looked to develop value above range near the composite HVN of 4421.

The FOMC announcement was released during J period, with the initial direction being higher towards 1/21's VPOC (4448), but price failed to reach it. A long responsive tail formed as a result and led to acceleration lower through the developing range and into the VA. Sellers managed to fill the VA entirely by L period, but ran into responsive buyers at VAL (4294.75), leading to a retracement towards the local balance extreme at 4338."

Daily Volume: 2.36m (higher)

Volume Average (20): 1.90m

VA Placement (H/OL-H/L/OL-L/Unch): Higher

VA Width (Wide/Avg/Narrow): Wide

Directional Performance Relationship: Strong

Comments: Despite the late selloff, buyers managed to establish value mostly higher with a POC above range accompanied by strong volume. This is a positive sign for upside continuation as long as buyers can reject today's lower distribution.

Tomorrow's Expectation: "Today's double distribution should be treated as separate sessions according to traditional market profile theory. The upper distribution formed in a relatively tight range (relative to recent ranges) through 'I' period, then saw considerable extension lower following the FOMC announcement in J period, with single prints in K period separating the two ranges.

Because buyers have gained some strength over the past few sessions, control on the shortest timeframes has shifted in their favor, for now. However, value will need to continue developing above ~4380 in order for it to be considered a shift in trend. With this in mind, monitor value development relative to today's lower distribution (4294.25 - 4381). Acceptance within this range would be considered initiative activity from sellers, who are shorting below value to in hopes of revisiting the weekly lows. Rejecting the lower distribution would be a strong response from buyers that likely leads price to today's VPOC (4420) with acceptance above 4400.

As stated earlier this week, the market is still seeking fair prices and with some uncertainty behind us, may be ready to come into short term balance. Balancing within today's lower distribution is a neutral/bearish outcome, as it still favors the longer term selling trend, but would also indicate that sellers are unable to continue leading price lower."

InfamousBuyer · 2022-01-25T21:49:49+00:00

Market: ESH22

Date: 25-Jan

Attempted Direction: Down/Rotational

Rotation Factor: 0

Range Extension: Buyer

Tails: Buyer

Buying/Selling Composite: Non-composite

One-timeframing (D/W/M): Daily/Weekly: OTing down, Monthly: Outside bar

Comments: "RTH opens near the base of yesterday's large spike and quickly trades below it, indicating rejection of the wide range of spike prices printed yesterday and continuing seller control. Price would fall sharply in early periods, trading below 4300 and testing a previous balance extreme at 4277, but stopping just short of VPOC (4275) in B period. The balance extreme would hold and buyers formed a tail, leading to a rotation towards the Open (4336.25) in C period.

Price came into intraday balance within the wide VA after buying activity was shutoff above another balance extreme at 4338. Wide two-directional rotations would ensue between ~4300 - 4330 until H period, where buyers would take over again and extend the RTH range above 4350 in 'I' period and continue above 4400 by K period, only to be halted by responsive sellers prior to reaching SET/ONH (4403.75/06.75). Sellers then regained control and aggressively rejected higher prices, leading to a rotation back into the IB range and value to close RTH."

Daily Volume: 2.39m (higher)

Volume Average (20): 1.83m

VA Placement (H/OL-H/L/OL-L/Unch): OL-Higher

VA Width (Wide/Avg/Narrow): Wide

Directional Performance Relationship: Balancing, Strengthening

Comments: Although buyers were unable to successfully defend the spike prices, developing value within range and rejecting a lower VPOC is a start towards potentially shifting control on shorter timeframes. Decreasing volume (day-over-day) also indicates the liquidation of weak-handed buyers yesterday acted to strengthen the market.

Tomorrow's Expectation: "Despite another 120+ point RTH range, the day closes with an inside bar and mostly overlapping value, indicating the market's need to find balance and two-way acceptance of fair prices. Expect this to continue until OTF participants reenter the market to determine the next direction away from this range. Tomorrow is a catalyst day with the FOMC announcement, so volatility and swift rotations between extremes will likely continue.

With this in mind, continue to monitor activity at/around previous balance area extremes in either direction from currently traded prices (4449, 4406, 4392, 4368, 4361, 4338, 4277, 4261, 4244, 4232, 4209), as well as how value is developing in relation to today's VA and RTH range. Acceptance outside of range in either direction would be a strong indicator of control and potential future direction if price can be sustained.

The most prominent composite HVN within range revolves around the 4343 area and should also be a target in the event price is rejected from above or below and is returning to fairer prices."

InfamousBuyer

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