My observations for the NQ this morning in 2 parts. Comments welcome. Part 1 Context and Premarket 1. NQ Drifted down from yesterday's high down to the midpoint of yesterday's range. 2. Buyers stepped up at this midpoint to push the price up 3 points, followed by a reaction. 3. However this reaction was slow and laboured compared to the up move and only reached just over the 50% percent mark of the move up before buyers resumed their pushing price up again. 4. Price then forms a springboard at the point of an overnight congestion area, this too is overcome by buyers as they push price up another 4 points. 5. Sellers then push down price 100% of the upmove back to the springboard. Buyers are then unable to push the price higher than any of the previous highs and drifts back down, all suggesting weakness on the part of buyers and strength on the part of seller. (Success and Failure)
Part 2 Observations - First 90 Minutes 6. Price now follows through on all this weakness and drops out of the hinge. A small charge back up is made by buyers but is quickly rejeted, a low high is made and it resumes its downward trajectory. 7. But sellers now have to contend with the overnight mid point. What will happen here? Price is pushed through the midpoint, forms a double bottom at 72 (dont know why maybe previous support) but anyway it springs back up a straight 7 points without stopping for air. A small pull back and its off, buyers are now firmly in charge, there is no break of the demand line for 15 minutes or 10 points 8. Price now run into what appears to be the midpoint of the hinge and stalls, drops out of the demand line. Price drops but not very far, its seems to be halted by the previous support/resistance/ springboard going all the way back to last night at 180. Price stalls here and sellers fail to push it back down past 180. After a good 10 - 12 minutes of sideways movement buyers decide to take up the reins again and push price up again - with no objection from sellers. Price carries on northward.
Maybe the Futures is new to him but he has quite some experiences in trading though. Btw, today I didn't see a much clear entry.
I don't see the hinge you're referring to, but you've found as a result of your observation a support/resistance level at 80, first by noting the resistance above your "springboard" then by noting the support provided at the same level during the next hour. Once price recovers from its trip to 70, it again finds support at this level before rallying to 86. When this occurs, you can either play it without regard to the whys and wherefores or you can if you must look for a reason. In this case, price has been repeatedly finding support at or near 70, which is the midpoint of the hinge formed on Monday. All that should have expired by now, but sellers keep hitting it. And the difference between that and the high is 80. Again, why this is occurring I have no idea. But this "range" from 70 to 90 is clearly important to somebody. Whether or not it's tradeable considering how price is bouncing around within it is another matter. But there does appear to be a method to this madness. This is a trading range of sorts, even though we have yet to make a return trip to the high and the "support" level is extremely sloppy. But 80 does appear to be the midpoint of all this activity. If anyone wants to try to trade this, knock yourselves out. I'd rather wait until everybody settles down and either creates a balance trading range or starts trending again.
DB, Today I am seeing a bugel formation on the 30 min chart. Is there any insight you can offer on the market participation/bias that results in a bugel as opposed to a hinge? In your experience does one have different implications from the other, or do they both just show indecisiveness?
The price created a Resistance out of nowhere at 3186.5 and there were two attempts to the high which failed to surpass the previous one showing weakness.
A reversed hinge. It is like stops get run at top and bottom slowly opening up the range. Sorry, I can not post a pic from this computer right now.