hi fader, I've actually covered this a few times, but let me give you a quick description. On a double distribution day Steidlmeyer's VA algorithm often results in a VA that spans the distribution incorporating prices that were part of the range extension (single or double prints). To me this is illogical. So in these cases I arbitrarily lower the UVA or raise the LVA to better represent the latest value area. If you see what I mean. This is a fairer means for judging where value is going in to tomorrow. Hth
ok thanks, i saw you had mentioned this before, i wanted to check if you adjust mechanically or arbitrarily.. - one thought i had was to take the traditionally calculated VA which was "too wide" in this case and then calculate a VA of this VA and use this adjusted LVA as your lower boundary, i don't know perhaps this would be over-complicating things.. - all the best.
Here' something from MP theory that I've never completely agreed with. We left a tail yesterday on the ES (chart below - cells EX136-144) in the "G" period. The theory is here that prices get marked-down to a point where selling is shut-off. That is, the price is so far out of whack with perceived value that nobody is stupid enough to sell at these levels. The fact that the tail is single prints indicates that these prices were "rejected". That is, nobody wanted to trade at these levels. Ok, so far so good. But then MP theory goes on to suggest that this probe lower is an indication of the direction of the next range extension. That's the bit I don't agree with. Might be worth watching. The other thing to note is the ledge on row 133.
Bolter, I'm looking at the longer term charts to determine S/R areas in products that you don't cover. I noted that your last VP was from Jan 12 in ES, but I'm not sure I follow the logic behind choosing this date. I am thinking that you would look back as far as you need to to find the start of the next swing up or down. So I could look at ES from the turn on Feb 8 or the run up from Jan 3. I'm not questioning the date you chose for the ES, but, rather, I'm trying to determine what would be the logical "look-back" period for the other products I trade. Please forgive me if this question seems redundant. I have read over your thread again and find more and more hints but none that makes it easier to determine a good date to look back.
single prints don't mean "dumb" people buying tops / selling bottoms - they mean that there was a supply/demand imbalance/inefficiency strong enough to push the market to these levels - it is this inefficiency that drives directional movement, hence the market continues to gravitate towards these levels.
Yesterdays action looked pretty constructive and we closed at the highs, although the afternoon rally was not on large volume. However, all three indexes are now sitting right below critical levels so let's see if the market has the cojones to break higher. We probably will not sit at this level too long, it should be resolved fairly quickly, either way. I'd like to think we can break out but it just seems a little too cute to me at this stage. I'll be trading cautiously at the open. Levels: ES 1281.25 1276.75 1275.75 YM 11070 11035 11028 AB 726.60 726.20 722.60 As we stand on Globex at the moment we will open above the UVA, and just above S/R on the ES at 1282.75. Obviously I'll have a posetive bias at the open and buy pullbacks/support and sell rallies/resistance. I'll be looking to buy any sign of a bounce off either 1282.75 (S/R) and/or the UVA. Initial target will be the vaccuum around 1288.50. The LVA might also be a buy today. Note we have two previous highs (resistance) overhead at 1291.75 and 1293. Below we also have S/R at 1268.25. The YM prognosis looks very similar, although S/R is a bit lower in the VA at 11046. Perferred trade is to buy a pullabck to the UVA. I really don't have a logical target - it's all fresh air overhead. Virgin territory. Let's see what Mr. Market has to say about all this.
bolter, When you have a chance can you touch on how you generate your cumulative volume profile charts? I find these charts invaluable. Thanks. PaperTrader
Love the thread. Been reading for a while. Something about the TICK you posted a while ago I thought I would add to. You posted about not using a line chart (because you can't see the actual extreme values on a line-on-close, but instead using an OHLC or candle for this reason. I use both on the tick. here's why. The 5 min candle does exactly what you say. i have levels set up with sound alerts. something i learned from another trader that works very well - when long, if tick goes over 1000 good time to scale out. when long, if tick goes below -800 that offers an alternative to waiting for your stop to hit, and can be used for exits (even if @ a loss). obviously you work this in with one's own methodology. the reason i use a line chart as well is it offers 1) visual representation of whether the TICK has quickly spiked from the "noise zone" (roughly +600 to -500 or so). if it quickly spikes, it is almost always an excellent fade play. on the other hand, if it stairsteps up, that is generally not a good move to fade. Also, when entering longs or shorts (on gap fades or whatnot), the TICK line chart offers a nice entry on a "TICK hook" when you see the tick line hooking over, that offers a visual representation/cue. so, to put it briefly, i chart TICK on both line and candle (5 min candle) and both are useful for different reasons. Also, i do think that often the S&P leads the YM. I generally do not trade the ES (the spread is bad among other reasons and i prefer the smoother movement of the YM.), however the I have used the audio feed available for the S&P *pit* contract to help my YM trades. the pit audio can give a good indication of whether moves are sustainable or not based on the volume patterns in the pit, and can be read in the same way that pure tape reading (time/sales) gives you a heads up on price action. i've been incorporating MP more and more and i think this is an excellent piece of work you have done here