2023-04-04

Post market

We have a piling on on the daily. The normal thing is to balance a little
We get that liquidation break after failing above A
Not easy to trade as there were news at this time
I shorted near B low as it became clearer, so i was positioned for a first directional move
Did not get a scale out because orderflow did not indicate
Created a nice afternoon rally high with a volume peak in I period. Great place to get full size again if you are not already
Given the flagpole on the daily i saw potential for second directional move. I stayed in position with a scale out at low of day
Never reached lod so i closed in K. If we do not follow through there is potential for a short squeeze in which you do not want to be short

We now put put the daily in Balance which is very healthy
Sellers had chances for a bigger break yesterday as well as the day before yesterday
A bigger break did not occur which indicates that the market is strong
Balancing on the daily normally needs a few days of time
Trade the next days in that context

On the weekly fesx we see, that european stock market is on its way to reach the alltime high
The SPY weekly is still fighting with its downtrend that started with the beginning of 2022

ES (daily candles) succesfully broke out of that balance area
We are one time framing higher for 4 days now and were able to close above the 61.8.
But the dynamic is not very high. Overlapping value. Higher highs only by little
What can happen next?
Dynamic can increase with more short covering
We can balance for a while
We can totally roll over and get a new down swing

We started strong with a breakout to new highs on high volume
But then buyers ran out of bullets and we liquidated for the rest of the session resulting in a liquidation-b-profile
We had a nice selling tail on the top but stronger selling did not develop. We even did not reach Fridays mid and by far not fridays low.
So we are still otf up. It seems that we just have to balance a bit.

Gap up after inflation numbers in a already piled on situation
The market is of course vulnerable for at least a fade
It is an open-auction out of balance which goes up and down through the open several times
If you expect imbalance, like i did, this is the recipe for a whipsaw massacre
You get in several times, you reverse positions but you do not get paid
I was in for the fade or the liquidation several times but always got chopped out
When the liquidation came (triggered by ukraine news) i was already out

We took out a daily high and are offiicially in balance on the daily now
Interesting to see how the market came back in the afternoon
Liquidations strenghten a market because they take out longs. These longs have now sold. This means a) This sell already happened and b) they can become new buyers (normally again at bad location)
I would not be surprised if we open higher tomorrow

We open in y balance
Try a little down, try a little up
You can feel that the market is a little bit too long, that buyers run out of bullets
Consequently, after 2pm we get a nice liquidation break
These breaks are hard to trade. When you have enough confirmation (speed) price has already moved a long distance
I do not sit in a trade waiting for a liquidation break. The most important thing is to recognize that it can happen and as a consequence not sit in a long trade