10:30 AM High Attempt Failed…Bearish Market Structure Continues Tracking

For the record, one of the elements that we attempt and I believe achieve, is market analysis without preconceived bias. Last night pointed to a high on Wednesday daily market structure and also probabilities for one of the strongest momentum days of the week today - usually upward biased. This morning early, before in our expert lounge we lowered the probability of that potential dramatically. This was around 5:00 or 6:00 AM. When something substantive changes, this is one place that is not going to be embarrassed about making the determination promptly and also determining if "EDGE" is compromised. Therefore, the impact of a change in outcome for the market probabilities today for us was of very little impact. It has not been easy to develop this kind of discipline and capability. BUT it is one of the distinct advantages of NOT using indicators and instead using data, statistics and probabilities and combining this with real-time emotional tools such as e-Tick-Tools.

When strongly bullish market structure and probabilities get overrun, often time, market participants get trapped. So, the moves can be as strong in the opposite direction if these participants become disoriented or forced sellers or buyers as the case may be. Therefore, today was and is a potentially important day. It is also, YET ANOTHER good example of using bi-modal decisions to navigate without getting trapped in expectations, opinions or notions.

It was clear in the early morning update that market structure favoring a bullish outcome was no longer highest probability, due to the patterns from 10:00 pm to 3:00 AM. These was a shot at recovering, however, noting all the anecdotal contributors supporting weakness and the importance of performance at 10:30 AM, the market responded in highest probability fashion. Delivering on the BEAR Market MSP probabilities at a 90% correlation. Gap Tools delivered the fill that it anticipated, and that led straight into the 10:30 AM timing. While there, e-Tick-Tools called a capitulatory BUY EXTREME. Which translates to as buying exhaustion. This was NOT confirmed by Accumulation Index, which undermine today's upward movements by showing emotions and execution feedback consistent with selling psychology even at the highs.

This post is not about per se today's outcome, it is about the important to have the humility to adjust to the markets probabilities without hanging onto previous assumptions and expectations.  This afternoon 2:30 PM to 3:00 pm is important as we can consolidate there. Probabilities favor further selling from this consolidation into the close.  3:00 pm is timing, and one should be careful and aware at time windows.

Tick Tools Today  June 24, 2015

Tick Tools Today June 24, 2015

Another Example of Bi-Modal Switches – TODAY

Today was a classic example of bias-free decision-making via Bi-modal switching. The scenarios were clear this morning. Given the data and evidence, a slight upward bias was preferred. This was easily adjusted based on a combination of timing and structure setting up a definitive bi-modal switch. In addition to that GAP TOOLS analysis of the gap showed another low probability gap fill and higher than normal gap breakdown probability. An X-Tick triggered at the open that needed to hold. It broke down AND triggered a probability for a stop run against long positions. This all happened between 8:00 am and 9:31 AM...putting 1:30 PM as timing for a likely low rather than high.

Then as shown below the most bearish scenario tracked and moved timing forward to about 2 hours earlier. The perfect way to mitigate emotions and stress. Not every scenario works out - but with this type of evidence, the amount of conflicting emotion and information are minimized. All without a focus on MACD, RSI or Moving Average...which are merely tertiary tools.

Bi-modal switching in action

Bi-modal switching in action

Below is the Gap Tools and Tick Tools cut today:

June 12th, 2015 Intraday  e-Tick-Tools  Results

June 12th, 2015 Intraday e-Tick-Tools Results