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The S&P Chronicles - An Amalgamation of Wyckoff, VSA and Price Action
It is not a change of behaviour, why? Within this downtrend we have a larger upwave via A, and it draws out higher volume in total than B. Yes we do get better ease of movement to the upside, but the wave is smaller, in length, duration and volume, this is negative behaviour.
I wasn't active this day, however the spring at support where we are unable to test the demand line is a valid trade. The target for this spring would be the supply confluence via the trend channel (purple line ) and resistance (overnight low)
As price starts to roll over via C we can short to the downside with a play to the demand line which is hit nicely (target)
All the structure was in place before hand giving our targets.
Targets and trade limitations (spring) must be known in advance, to help with the pressure of dealing with price in real time at these locations (less decision making, can't be caught off guard)
In reference to the time based chart, the price may appear sloppy, but there are two HUGE supply bars that literally are the length of the attempt to rally. These two bars tell us, that supply is in this market and in a big way, there are no buying bars of this quality. Try not to forget that we are in a confirmed downtrend, making lower highs and lower lows; short plays are highly advised
Wyckoff and VSA principles at play in today's action:
Multiple Time Frames
No demand (setups x 3)
New Momentum Low (setup)
Oversold Conditions
Structure Reverse (flip-side use of trend lines)
Change of Character
Supply Confluence
Comparative Analysis
Yes, using the 5m for intraday for the day in question required stops that were uncomfortable due to the volatility, spreads were 6, 8, 10+ points per 5m bar. When these conditions occur, one can reduce contract size or perhaps trade a 100 shares via SPY (ETF) to reduce exposure.
As tick charts are activity based and not time, its possible at points during the day, that the tick chart using 3500 transactions per bar may have been the equivalent of a 1m bar or less, this led to using a 5250 chart and a 7000 tick chart, this helps to silence the noise a little; a mere personal preference
Wyckoff and VSA principles at play in today's action:
Classic Wyckoff ''Rally back to Ice'' (setup x 2)
No demand (setup)
Upthrust (setup)
Waves
Structure
Overbought/Oversold conditions
Effort vs. Result
Change in Behaviour
Wyckoff and VSA principles at play in today's action:
No demand?
Structure
Overbought and oversold conditions
Demand and Supply
Bar by Bar Analysis
Comparative and Relative Analysis
2 bar reversal (setup)
No supply (setup)
Effort vs. Result
Apart from the quantitative approach that used to be a part of my analysis many moons ago which incorporated the fallacy that if the Asian was down, followed by the European session more often than not the US session would rally and this worked (to some extent) there are patterns that would last for a couple of weeks or a month or so, this was stacking the odds in our favour by playing probabilities
However, as skills improved and the ability to read the market as it unfolds developed I would apply (and still do) the infamous ‘’change in behaviour’’ by comparing and contrasting the Asian and Euro sessions. E.G - If in an uptrend for 5 days via a 60m chart and every Asian session holds gains (trades sideways) and on the 6th day there is selling of significance during the Asian session (over 3x of the AVT via the prior Asian sessions) This would be an indication that selling has emerged and perhaps the trend is in risk of failing. A good tell early on via the US session is to see price fail to hold above the Euro/Asian session highs, structure should hold and this is the key. Due to the activity (volume) in the US hours by all intents and purposes we should always break structural areas made by the lower volume pre-market hours, however when they hold along with changes in behaviour, we gain a big edge and get to jump in early as the market is tipping its hand.
Alternatively we look for high volume bars during the overnight sessions, this is usually large scale professional buying, we need to make sure it’s not climatic by gauging the price action thereafter and if not, we trade with the high volume direction. There are many examples of pre-market analysis in the Chronicles coming into play and setting us up for the US session, apologies as I cannot point you to the exact edition.
