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Daily TPO homework for DAX and NQ


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Daily TPO homework for DAX and NQ

  #481 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
Posts: 644 since Dec 2016
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Guidoisot,

My daughter is sick. So I was not able to trade yesterday and this morning.
I am not watching bund, so i can't say much about it.
But the weakness in European equities are really impressive.
Both cac and DAX has not only closed the Monday gap, but nearly tested the VAH of the prior week's VP.
If the prior week's VAH being taken out, then the value area trading rule would apply that I would expect the European equity to trade through the support and challenge the double bottom low made by mid Nov very soon.






guidoisot View Post
Start of this morning EU equity futures and bund future are not inversely correlated, as it usually happens. Is this due just to the fact that their futures are soon expiring at different dates?



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  #482 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
Posts: 644 since Dec 2016
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1. Russell has closed the weekly open gap yesterday. When it was consolidating around the prior resistance @1535, the market maker has staged a deep stop run creating a false break down (an excess in TPO chart) in the chart. I would carry forward this information to this session by holding the hypothesis that the down auction is over as my base case of the day so long as the stop run low 1528 is not taken out.


2. ES still hasn't close the weekly open gap yet. Today is Tuesday, it is a day that we would very likely to see a weekly low to be formed if the real intention of the market is to go to the upside. Note that there is a low being made at 2768 during the Globex session. This could be the low of the weak, but technically it is a weak low with incomplete auction. I would like to see ES to auction lower to reach the stops below the globex low and make a good low around 2765. I would maintain my bullish bias so long as ES is able to close above 2755.

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  #483 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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1. Cac has traded all the way through last week's value despite some signs of support being shown at the prior week's VAH level. Now it has traded at the VPOC of the VP of two weeks ago. That value area is also very likely to be traded through. Basically, today's price action has opened up doors for big down side.
Tomorrow morning, we should have a short bias by leaning on the broken support as the resistance zone. I am really shocked by how short lived the rally is. I thought the price would hover around the high for a few days before rolling over.


2. ES had a couple of failed buy attempt in the fallen wedge formation at the high. Once breaking down, we should anticipate a complete wash out of the trapped longs for 200% extension before establishing a core long position. Notice that the 200% extension brings the price very close to the area of trapped weak shorts.

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  #484 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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After the last two days of selling, the picture is not pretty in Cac.
It has been making a re-distribution range below 5150 for the entirety of the last quarter.
THe double bottom was not able to lift the price much high. Now the double bottom is acting like a price magnet that the price just felt heavy, heavy and heavy out of the cash open.

Normally, after a double bottom, the market maker would mark the price higher and build a re-distribution range at a relative high price. Now the price is so heavy that people rush in to sell their holds when the price is slightly higher.

Note that the 4850 is a critical neckline. If given away, there is very little support below.

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  #485 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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1. Cac has been dangerously close to the 4880 major support. Note that the current formation is a double bottom. If a double bottom fails, then final target is 200% extension of the structure that sits above it, which is going to take European stocks back to 2016 lows. I think the odds are really high that the bears are going to get it this time.
Technically, it is a gap and go situation that we should follow the unclosed gap which is the down side.
The first resistance is at 4990, and i don't have any level in the vaccum of that gap. The next resistance is at Tuesday's support @ 4925.


2. DAX false break of a H4 down trend line. After the failed break out to the upside, this contracting triangle is going to create supply pressing price to the down side.

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  #486 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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Weekly VP chart for CAC. It is kept below the VAL of the VP two weeks ago where support was shown. Now the support has turn resistance.



shrekchenbin View Post
1. Cac has been dangerously close to the 4880 major support. Note that the current formation is a double bottom. If a double bottom fails, then final target is 200% extension of the structure that sits above it, which is going to take European stocks back to 2016 lows. I think the odds are really high that the bears are going to get it this time.


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  #487 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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After breaking the neckline at 52.20, a big M topping pattern has been confirmed. The first down side target is at 50.03. If 50 does not hold, then buying below the second target at 47.80 is a better bargain

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  #488 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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1. Yesterday's impressive late rally was merely an effort by the market maker to mark up price through a congestion of a large number of trapped weak hands who were active out of the open. The down move was a 200% extension of that range to clear the book and then trade right through them to bring price to a better trade location for the bears. See where the ES has closed around 2700? Just below Wednesday's range. I would reckon, the risk and reward of shorts is good again in that area.


2. The European stocks were much weaker that it didn't pull towards a good short location, but someone has marked out a monthly support from 2016 in DAX around 10800 might be lending support to DAX. Hence I would like to see some bullish price action when it retests the 10800 and then to take a long.
From a short term perspective, the chart is as bearish as possible -- trade right through a major support. All the prior supports would turn resistance now. So you just find all location where there were one or two bullish bars, and put limit sell order at those places.

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  #489 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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1. ES has tested the VAH of yesterday's balance at 2670 during the London session. It seems that it is ready to move higher already. I would expect the 2700 to 2720 zone, which is the bulk of the Tuesday's balance, to provide some resistance. If that balance were to be taken out, the Price could move very quickly to challenge the 2800 resistance as there is very little structure standing in the way to a higher prices.


2. Cac has built a balance just above 4830 which is the VAH of yesterday's cash session balance. If that level were to be taken out, it would open door to challenge yesterday's low 4750. Because there is very little structure standing in between.

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  #490 (permalink)
 shrekchenbin 
UTRECHT/The Netherlands
 
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Cac has broken the 4880 support, now it seems that it is inevitable for it to test the big consolidation area at 4600, where a bounce might be able to find.
Ultimately, that level is going to break as the overhead supply is going to weight on the price to break towards a full 200% extension of the crown formation or M top formation.



In the execution time frame, we should not chase too much into the low as the price has been over extended to the low and market positioning is overly short. The path of least resistance is for it to bounce up to seek some buy stops before making another leg lower.

I am preparing myself for two scenarios:
1. If it opens around the low, watch the possibility of a false break down of the Thursday major low and snap back to the other side of the range.
2. If it opens with a bullish posture and the price drifts high after the cash open, then i would wait patiently for the upward trend line to break first and take a short at the retest of the high.

If it opens and trade straight to the down side with strong momentum, then it is too difficult to catch and I would just let it pass. In summary, either watch the spring at the prior major low or fade the break down of a corrective structure to the high during the London session.

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Last Updated on March 29, 2019


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