ES 1-6-2008

Good Morning Traders !

VAH 930.50
POC 925.50
VAL 922.00

Weekly R1: 954.50
Weekly PP: 904.00

Daily R2: 944.00
Daily R1: 935.75
Daily PP: 926.00

Highest High in last 20 trading days: 934.25

I will be watching what happens at R1 with great interest this morning ! Also watch the IB high for indications of a trend day if price is accepted above R1.

ES Daily Notes 5 Jan 2009

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Originally posted by BruceM

Hey Prestwick....when you get a chance... I heard ann todesco ( whatever) mention unfilled Value area but never got to ask her enough about it.......If you have an unfilled Value area from say 925 - 922.....would you go short at a break of 925 tomorrow, expecting 922 to print....I guess the real question is how do you use the information on the unfilled 80% rule/ filling in of value

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Ann (Todisco) is the one who has taught me most of what I know about MP. She just says that we'll eventually fulfill the unfulfilled 80%s and she has proven to be right much more than wrong. She hasn't pointed out a strategy like shorting a breakdown of 25 like you mentioned but it would seem to make sense. Instead she focuses more on following the basic MP signals as they develop like open and drive, open reverse drive, singles, engulfments, etc. As a scalper I don't tend to play 80%s because I don't have the staying power or stop discipline but I still stay aware of them.

thanks PWD..appreciate it...she use to teach good old larry levine who stole her engulfment and changed it from 15 minutes to 10 minutes

Hi guys. Was there a kool's time price pattern there at 15:00 or the price projection came up too short (I came up with 41.50)?.

quote:

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Originally posted by vast524

Hi PT. Thanks for the info.
I am wondering though, how do we tell if the bids were actually entering the trade at that price and not exiting?
I have heard that the big boys will often set us up with the opposite to were they are wanting it to go. Then reverse the trade.
I am sure you will have a simple explanation though.
Regards

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For me that depends on where the orders are coming in with relation to nearby support or resistance. Also, the intensity of the order flow plays a factor in the answer to your question.

For example:
1. at 15:57pm we saw the market "one-tick" through nearby (or short term) price ledge (support) established at 930.00. As soon as 929.75 was touched, the filtered T&S lit up green at the offer and above offer.
2. at 16:04pm we saw the market setup and "one-tick" through nearby resistance at 933.25. Likewise as soon as 933.50 was touched, the filtered T&S lit up red on the bid and below bid (dark red).

In each case the market first setup the trade (price ledge) then as soon as price "broke through the ledge" everyone immediately jumped in and went the other way... lol

Anyways, I dunno if this is the specific pattern your referring to in your comment/question. But it is a very common pattern that repeats pretty much all day long, and does have that aspect of a head fake type of setup and reversal you mentioned.

if i remember correctly Ann didn't focus too much on Deeloping value from the current day..I liked her she was good

quote:

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Originally posted by BruceM

hey PT does the bid ask stuff act differently during the first hour as so many price probes happen then

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Often times it works better than a chart can when the market is fast. You can see the reversals at the bollinger bands (1 and 5 minute charts), or on the reversals off the 5 minute bar high (or low) for example. Again, its a matter of knowing where to look for the patterns to form.

quote:

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Originally posted by Maria

quote:

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Originally posted by BruceM

That concept messes me up......buying blocks yet it's bearish..yikes...

quote:

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Originally posted by pt_emini

As price moved below 930.50 (VAH), there has been a steady flow of blocks above 200 lots flowing into the bid, which is a bearish pattern.

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I think he meant 200+ size blocks hitting the bid.

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That's correct Maria !

sorry for the confusion

Let's say for example, we are watching a support level at 931.00

Price comes down into the level bounces a point or two then comes back into the level for a retest. As price ticks down through 931, we see the T&S light up red with new sell orders with large size below the bid. This creates a bearish situation for anyone that bought at 931.00 expecting buyers to hold the level, instead the new longs see the T&S light up red with a flood of large sellers taking out the bid below them and driving prices lower in a hurry.

Hi PT. Thanks.
I guess I was trying to see if there is a way of telling if the buy or the sell of contracts when filtered for the big boys was them entering or exiting.
If I see a lot of big buys at or above the ask price and it is of a S/R point then I may see the price push up.(And not them exiting a short) I wonder if when they are exiting a trade their big order will be sitting there and it will get printed as smaller lots as the smaller buyers get their contracts. But when they enter a trade it will get printed in one go?
Or do they exit using market orders?
Thanks once again for the help and info.

quote:

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Originally posted by vast524

Hi PT. Thanks.
I guess I was trying to see if there is a way of telling if the buy or the sell of contracts when filtered for the big boys was them entering or exiting.
If I see a lot of big buys at or above the ask price and it is of a S/R point then I may see the price push up.(And not them exiting a short) I wonder if when they are exiting a trade their big order will be sitting there and it will get printed as smaller lots as the smaller buyers get their contracts. But when they enter a trade it will get printed in one go?
Or do they exit using market orders?
Thanks once again for the help and info.

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Actually that's an excellent question / observation.

This is one thing about the DOM that tends to mislead traders using it early on. In a down trend, you will often see larger size sitting on the bid side of the DOM, and relatively thin size on the offer. New traders tend to mis-read this large size on the buy side as support, when in fact it is bids to cover open shorts at lower prices. It's not support !

At each lower price (in our example of a down trend) there will be some spillage of buying (to cover open shorts) into the T&S. In fact, if you watch closely as each new tick lower occurs buy orders will trigger on the offer. I generally view this as normal spill over from the bid side of the DOM into the T&S.

I have given vast's question a bit more thought this evening and want to add a couple more observations / comments to my above reply.

Vast's question is: can we differentiate a trade as being an entry or exit from the T&S or the DOM . The simple answer is no we can't.

When we are looking at T&S we are viewing the same information provided by the volume histogram at the bottom of any simple bar chart. With the T&S we are looking inside each volume bar on the volume histogram as it is forming. The flow of orders can give us an intuitive feel for the intensity of buying or selling at any given time. What I do is apply this intuitive feel of order flow with an expected behavior of traders at key price points (S/R price levels).

The Market Delta footprint charts takes this bid and ask analysis to the next level, providing a visual record of the size of buying and selling at each price. This can be useful in more accurately determining in real-time if a new price is actually being accepted.

Thanks PT. Very much appreciated the time and thought that you have put into the questions I asked.
I have still a lot to learn.
Regards
A