Finally Friday…& some Market Structure

This is a good time to reprise a chart or two that was posted last week and I encourage you to read those posts:

Below is a chart of the overnight session marked with vertical lines. In our analysis bearish moves start at 2:30 am to 3:30 am. Even if bearish moves do not start there the markets often slide out of this area into 6:00 am. More often than not that slide represents the majority of a decline a down day. However, market opens that are preceded by 3:00 am to 6:00 am weakness setup conditions for potential trend day declines. This happens in a minority of cases. We are having this discussion now because as the 3 AM market structure becomes more pronounced so does the likely risk in the markets. We are also having this discussion as a reminder of the content that was posted with these charts. Bear markets are very confusing.

  • Day session weakness is more rare than day session strength.
  • From the Cash Close to 3:00 am has precondition to be biased upwards
  • Morning sessions following a weak 3 AM market structure have precondition to be biased upwards.
  • What this accomplishes is that Sellers want to sell the cash market and get run over and feel like they did the wrong thing
  • Friday's in both bear and bull markets are the most likely to see weakness after the open that follows through into timing windows.

3AM Market Structure - A Bearish Tendency

3AM Market Structure - A Bearish Tendency (chart is VERY wide - click to view then open in another window by right clicking image)

Below is an historical chart of the daily market structure projections for comparison against what actually happened. This is an older chart from May 16th. Tendency is that daily Market Structure Projections can get it wrong after 10th or 11 consecutive right. There is no way to know how the current upward expectation for today's AM will turn out. Certainly, the intraday market structure presented below gives us some more color...and again its bimodal. We are currently in a 10 day run of accurate market structure compliance by the markets...meaning the market structure projections have been correct for 10 days consecutively. This gets the gander up for anything that appears out of the ordinary with the markets for me. In fact, this is one of the most significant areas here market structure analysis such as ours works. One has an edge knowing the highest probabilities in advance. When markets do not comply with the highest probability scenarios something may be changing. Often the market will be expressing something substantial as changing capital flow structure takes a lot of effort. So, when something is different the edge is also there in that one should be on high alert for the unexpected or the something dangerous. The markets are very precariously perched right now on extremely unsound internals. We encourage you to read the articles in the "

The markets are very precariously perched right now on extremely unsound internals. We encourage you to read the articles in the Feature section of this blog as they reflect longer-term, social, structural discussion and often other than being interesting are relevant for extended period. This section can be accessed easily from the blog menu or the upper right-hand corner of the article's sidebar on the right.

Daily Market Strcuture Projection History

Daily Market Structure Projection History

As stated above, the daily projections have now been on an extended run. So, its not going to be surprising for them to be wrong soon - its expected actually. On the weekly/monthly timing we are  in or approaching significant timing. So with that here is the intraday market structure potential, which ironically is in some ways quite similar to yesterday. With that, if the bullish market structure follows then that could lead nicely into structural inflection points coming next week.

May 29th, 2015 Intraday Market Structrue Projections

Below are the current Daily and Weekly Market Structure Projections as of yesterday...they have not changed so, chart is included for convenience and is yesterday's chart.

May 28th, 2015 Daily & Weekly Market Structure Projections

May 28th, 2015 Daily & Weekly Market Structure Projections (Chart from Yesterday)

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply