E-Mini Session Wrap Up Video

Enjoy a re-run of today’s E-Mini session exhibiting participation as measured by our Zero indicator. On the left side is the hourly panel and the Zero Lite runs on the right via the 5-min panel. Swing traders and scalpers are encouraged to watch the 5-min panel for early clues – in particular price/signal divergences and lack of participation as expressed by a flat signal. If you like what you see then may want to watch some earlier ones – you will find plenty of examples of what to look out for and how to avoid common traps when trading the E-Mini. Plus you may enjoy the tunes 😉

I didn’t add any comments today in order to assure a neutral perspective for everyone. But if you care here is my POV: At the very beginning it looked like we may bounce but that fell apart when the ZL fell back below the mark. From then on all we’re getting is one attempt near VWAP. After that it’s lower highs and lower lows. I think personally I was over thinking it a little in the morning – expected a stronger possibility of a bounce. Which goes to show – you never really are completely free of bias. In hindsight it’s all crystal of course 😉

For me it usually boils down to this:

  • Is the Zero above or below the mark?
  • Is price in line with the Zero?
  • How strong is participation?
  • What happens at inflection points (e.g. previous price levels/extremes or VWAP)?
  • Is the signal gaining strength as price trends?
  • Last but not least are there divergences?

At that first push higher there was still an opportunity to run the tape higher and to fill the gap.. The most crucial moment was the VWAP test thereafter – it all fell apart from there and the Zero continued to point down.

In order to approach this more systemic we need some type of classification that judges the first two hours of the session and looks for recognizable patterns. If we agree that today’s session is a good example then this would represent an example of ‘increasing selling pressure after initial failure to rally’.

Any constructive thoughts would be appreciated. Perhaps we can all collaborate and produce a rule based system that leverages the Zero.

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Short Term Inflection Point

After yesterday’s spectacular failure by the bears to close the deal equities managed to quietly claw their way higher over night. We are now at an important short term inflection point and thus we have a binary entry opportunity. If you are still short then move your stop down to near 2088. For everyone else still in cash here’s the skinny:


I am short here which has horrible odds quite frankly but it’s a lottery ticket. Most likely we’ll get continuation higher but we should wait for a solid breach of the diagonal shown above. Most importantly the 25-hour SMA is starting to push higher now and I expect it to act as support. So in a nutshell:

  • Short opportunity with horrible odds but potentially big payoff right now.
  • Be long above 2088 with a stop below 2080ish.

I’ll chime in here a bit later if I dig up more setups for the day. BTW, great discussion on system development in the prior thread – keep it up folks!


Expect a bit of volatility in a few minutes as Draghi is hitting the mic again.

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So Far So Good

We are currently at a ST inflection point in that ES 2062 either serves as support or will lead lower if breached in the coming hours. If you were short yesterday then I suggest you move your stops lower or at least advance them to break/even.


I wasn’t very surprised to see us trading below yesterday’s close this morning as participation on the buy side was almost non existence in comparison with the selling pressure that accompanied us down. So this does have a fair chance of leading lower. And by fair I mean about 50/50 – which sounds like a coin toss (which it is) but given the current medium term trend is as good as it gets. It is important that you always consider the general direction when trading short term chars.


And the downside potential right now is pretty limited – I have support kicking in as soon as ES 2050 where the 25-day SMA hails right now. On the weekly we have 2035 and if things really get dicey there is there is a stack of weekly NLSLs starting at 2008. If the bears intent on hacking their way all through that they better bring machetes.


Update on cable – so far so good as well but price hasn’t picked up any pace yet. I will keep things as is and advance my stop to break/even once it pushes above 1.515. That diagonal support line has plenty of touches but it was also falling and thus has less meaning to me.


Besides, just to give you an example of what I talked about a few posts back  – here’s gold proving that in the end trendlines are just that – lines – nothing else. Doesn’t mean price will always obey.


Bonds – in case you didn’t catch it yesterday – still is looking like a possible long. Same caveat as on the cable campaign: This horizontal trendline has not been touched sufficiently, thus the odds are low here. Which means at maximum deploy only 1/2R or less.

The future is now – so don’t bring a knife to a raygun fight. If you are interested in becoming a Zero subscriber then don’t waste time and sign up here. A Zero subscription comes with full access to all Gold posts, so you actually get double the bang for your buck.


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