Not much commentary needed. DOW was much more orderly than the SPX but both complied with structure and timing. Additionally, e-Tick-Tools real-time emotion analysis had a terrific day today. Daily AM session to AM session directionality remains precariously up into Monday morning. Monday. however, has a tendency to be a very weak day session day currently - selling from a morning high remains probable. Should be an interesting week next week.
Today was unusual for a FED day. Volatility was much higher than normal. However, as can easily be reconciled from the enclosed chart. One can not expect much more prescient, accurate and useful data than what we provided today. Against the crowd and common wisdom that today's FED day morning session would be a breakout and continue with strength into the meeting and high expectations for Janet to say something, anything soothing, probabilities once again win out over macro/rational, emotion or opinion.
One of the issues that we seem to be having that I feel is a discrepancy is the incidence of the post-announcement conference/show and tell, tea and cookies, whatever one wants to call it. This event has added new volatility and timing implications and though we do not like to adjust for historical data and will not make any adjustment, it is interesting to note that the afternoon bounce lasted nearly 1 hour longer and this is not the first time this has occurred. All else is highly accurate with the exception of the post announcement meeting. We do not feel like these events will be continuing for that much longer as the FED is attempting to use them to sell its story. If it's implausible to sell a story, adding an event to do so is a risk more than a benefit. Therefore, it is most likely that these affairs are not permanent.
Below is our MSP post-mortem.
Additionally, as was posted via the Twitter Feed in real time - the X-Tick emotional capitulatory Xtreme triggers marked the bottoms and both afternoon tops. In addition they set up some serious emotional baggage at these areas. So, between 2094 and 2097.25 is now an area that a lot of buyers capitulated and lost. Below 2097.25 and especially 2094 is advantage bears because of this. If the market can gather the strength to overcome the emotional energy that was exerted and wasted at these areas then bulls get a shot.
Below is the reconciliation of today's real-time calls. From top down on our Weekly, Daily and finally on the Intraday (shown below) with added data from Emotion, Flow and Gap...there were significant and obvious elements that simply eliminated the low probability outcomes.
One note, regarding probability related a Hindenburg Omen. As mentioned in the AM post on the subject, normal Hindenburg Omen's are unreliable and in fact rarely useful. However, as the name implies, there is a tremendous romantic attraction for people to short them...which has the direct effect - even in the rare case that they do work - of going against these traders initially. Given that we got a MCM Hindenburg Omen, the implications are much more bearish than normal, however, the nature of the setup is still in play because of the proximity to standard Hindenburg's, which implies that the lowest possible risk entry is to look for the squeeze that usually occurs and also that the market flow data seems to anecdotally support as well.
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.
Below is the Gap Tools and Tick Tools cut today:
This post is short and its all about the chart. This shows a great example of how using data and probabilities can create clarity where indicators and emotions create confusion.
Today was NOT choppy as market structure conflicts were indicating...This was cleared up at the open with the GAP TOOLS probabilities favoring high odds of a breakout and low of a gap fill and also with Stop-Run and Buy Extreme breakouts on the open...does not get much more powerful than that....rough day for the Bears.
Note, also that Accumulation Index (not shown) has been making new highs all day suggesting that more highs could be possible - in that case; the next situation becomes very critical. At 11:17 AM an X-Tick Buy Extreme (also not shown) occurred at 2,106.75 on ES futures that was in the top 6% of all buying events in the last 15+ years...this is normally bearish HOWEVER, a breakout OVER this level could be a sign that something big is coming as follow on highs would be expected with a break of such a huge exhaustion and eMotional energy expenditure.
Our discipline is centered on high level of non-correlated and non-latent analysis. This approach is unique and practical - aimed squarely on defining probabilities and conceptual potentials into a bimodal interpretive process that allows for flexible application and a minimum of emotional or intellectual stresses. If one reviews the posts over the last several weeks, its reasonably clear that we have been able to be out in front of most market moves. Accordingly, by focusing on timing and the projection toolset it enabled us and our users to be prepared for today's market action a week or more in advance and to conserve energy.
The key is that the market DOES NOT HAVE to follow a specific predefined potential to provide actionable, repeatable and probable potentials. Choices simply need to be reduced to clear and few options in ways that facilitate calls to action. Our goal is to ANALYSE eMotions not be a victim of them. e-Tick-Tools signals were exceptional again today, triggering X-Tick eMotional capitulation signals at the lows this AM and also at the highs this afternoon at 2084 on ES.
Below is e-Tick-Tools Live from today...real-time eMotional analysis and feedback right when it is needed - show activity that represent eMotional exhaustion or an eMotional breakout. Learn more on the e-Tick-Tools product page.
With an eye on next week, market structure projection generally shows weak bias early in the week with potential for a reversal starting around the Tuesday AM session and into early the following week - so, the following week's Monday AM session. It is not without merit to anecdotally mention that it is very common for significant ECB/Greek announcements to be made on a Sunday. If such were to occur now, it would most likely be also coming together with factors and emotions that can create exhaustion.
As, mentioned before in the "January Effect" article published earlier on these pages. Among the best timing for a reversal for this long-term market-structure occurs in June. I encourage to you look at the statistics and also the companion article: "Drama on the Market Seas".
Below is the chart posted this morning for intraday timing and market structure for our friends and members. This chart includes the comments which were further reflected during the day.
Below is the e-Tick-Tools chart as it played out today...GapTools data is dis[played also. Exceptional signals again enabled early identification of breakout risk to the upside near mid-day and also - market structure indicated 1:00 pm highs would weaken substantially. Breaking of the Second -X-Tick Breakout and then of sell extreme supports was an early confirmation of emotional predisposition for the afternoon weakness.
To learn more about X-Ticks and sell and buy extremes you can go to these pages on our site:
Today members in the Expert Lounge received this analysis among many others. As we can see, the markets approached timing around mid-day and also generated overwhelming eMotion readings. At which in real-time our resident expert analyst delivered this chart to clients.
The S&P500 has rallied 11 points from the data provided by e-Tick-Tools and our analyst - if you are curious about benefiting real-time eMotion and Technical analysis such as this...give the Expert Lounge a try.