Open House Thursday Comments

Posted by: ccochran
5/28/2009 5:03 PM
Markets don’t go straight down. Today’s market paused and consolidated the two previous day’s heavy selling. It will be easy for the market to trade in either direction tomorrow. I see the market as a trading range tomorrow and can trade at support and resistance with indications that the buying/selling is drying up. The longer term trade is still a short.

F1 Comments: The longer term direction of the market is lower until the demand for more money from the government changes. Sell rallies.

F2 Comments: Buyers entered the market in the OVN session and supported the ZB at 116-00±. The 7Y Note auction was worse than the 5Y auction, but the Dealer community was newly short 163K over the last two days and covering shorts is an easy way to support prices in the cash markets. This buying was present into the close too. If the market can take out 117-20/24 and then hold that level, it can trade higher off of EOW/EOM profit taking. Some news to impact tomorrow’s trading: GDP is expected at -5.5%; Deflator at 2.9%, Chicago PMI at 42.0, Michigan Sentiment at 68.0. Can sell failure at 117-24/118-00. Or buy with signs of support at 116-12/20.

F4 Comments: Analysis was to be a seller one time and see if support could be broken. Recommended sell zone was 116-31/117-03. The trade worked briefly. The software did generate valid buy/sell signals as the market activity permitted.

Open House Sample Research

Posted By Charles Cochran – 5/27/2009 3:44pm

Another day of trading another big day down. The sellers own the market and Treasury auctions accelerate the selling. Much easier to raise money with higher interest rates. We are getting them these days. Last week’s article that the US might lose its AAA debt rating changed the market’s sentiment. The bears have had their way and look to continue to have their way without some change in the news. Sell rallies.

F1 Comments: The selling accelerated again today as the market moved lower through the LT Distribution. The market remains in a downtrend and will until the government quits borrowing or the recession news remerges in the headlines.

F2 Comments: The analysis was to sell 118-15/19. The day session high was 118-175. The market idled into the 5Y auction hitting 118-15 at auction time. The auction was sold and the market broke hitting 115-25 after the day session’s close. If we hit 115-18, the market will be 3 points below today’s auction. Sell rallies. Tomorrow’s news is likely to be ignored shortly after the 0830/1000 EDT news. The Dealers should try to support the auction sometime tomorrow. So while we want to get short for the first trade tomorrow and see if we can extend the range lower, if the market doesn’t break, we can trade form the long side. Given the crash after the day session’s close, the sell zone has moved lower. The sell band is 115-07/15 with a cover, if 115-25 holds.

F4 Comments: The analysis was to sell 118-15/19. Day session high was 118-175. The analysis and software worked as expected. Valid sell signals were generated throughout the day’s range

4/29/2009 4:11 PM

The market held in the OVN session and did trade back to the preceding day’s auction price minus a tick. Resistance held and the market drifted lower into the auction. It was an OK auction. The Bonds sold, but most likely are still in street hands. The FOMC announcement broke the financials and the financials close lower. The market is pointed lower tomorrow too. If the selling doesn’t get started early, then light short covering is what I would expect.

F1 Comments: The market continues its move lower propelled by new supply and the FOMC announcement. The attractor remains 115/117 and we are close to that level.


F2 Comments: The market opened and did manage a rally almost to Tuesday’s auction prices. Resistance held and the market began to drift lower. The auction was weak. The market was stuck in a range w/sellers above 124-00. Then the FOMC spoke and said there were signs of economic bottoming in some sectors. Recovering economy, no more recession/depression, sell bonds. And this is what happened, IMO. Some news tomorrow, but not of the market changing kind: Jobless Claims is expected at -640K, Personal Income at -2%; Personal Spending at -.1%; Employment Cost Index at .5%; and Chicago PMI at 34.0. Want to sell early strength and see if 122-08/12 can be taken out. If support holds, will cover.

F4 Comments: Analysis favored a sell. Market did find sellers just above our 3^rd projected resistance level. The software generated valid sell signals at the levels allowed by the market.

Tuesday Comments by Charles

4/28/2009 3:39 PM

The market traded according to our assessment. It did rally into our recommended sell zone, 125-19/23. The day session high was 125-23. The rest of the day was a sale, a trend day, with 3 distributions lower by day’s end. The close was weak. The market is pointed lower and we could say this with more confidence, if it weren’t for the 7 Y auction. The auctions complicates the trading. Normal news events, relationships between markets don’t always apply. While the market si pointed lower, if the Dealer community decides to cover their shorts to support the market, the market will trade higher for the short term. Want to sell early strength and see if today’s lows or the OVN session low can be taken out. If not, will begin to look to the long side of the market.

F1 Comments: The market traded lower today and close weak. It is pointed lower tomorrow. And it needs to trade lower to hold today’s shorts in their positions.

F2 Comments: The market traded higher off the day session opening from the weakness in the ES. The Bond rallied to 125-23, into our recommended sell zone at 125-19/23, and then reversed to sell for the rest of the day. The market closed weak. The market activity analysis favors selling early strength. If 123-00 or the OVN low isn’t taken out, will cover and about getting long. The 7Y auction could bring in buying as the Dealers support this auction. Tomorrow’s new: Adv GDP is expected at -49%; Deflator at 1.7%: API inventories; FOMC announcement. First sell band is 124-03/07. Back up sell is 124-11/15. Cover, if 123-16 of the OVN low holds.

F4 Comments: The analysis was to sell 125-19/23. Day session high was 125-23. The software generated valid sell signals throughout the session.

Market Report By Charles Cochran

4/27/2009 3:27 PM

The analysis coming into today was to sell the 125-00/12 area to retest 124-12/16. The market hit 125-04 and 124-00 in today’s day session. The 2Y auction was a good one and the market recovered from 124-07 to close around 125-00. Tomorrow’s 5Y auction should be the dynamic that controls the market’s action. Basically see a trading range market w/a seller above 125-00 and a buyer below 124-08 and plan on trading this range.

F1 Comments: The market is in a longer term down trend. A new move lower may have started on B. We are at support. This week’s auctions may slow the recent selling too.

F2 Comments: The market showed a trading range today. I think that the market will probe higher, but find sellers above 125-00. This selling should take the market back to 124-08/16. Short term the market needs volume from 124-08 to 124-28. If the market does continue its rally from the 2Y auction at noon today, then the selling should emerge again in the 125-20 area. Some news tomorrow: consumer confidence is expected at 28.8 and Shiller Case Index at -18.5. The 5Y auction at noon CDT, should be the market’s focus. Usually the Dealers run a good auction/bad auction strategy. I am guessing that the 5Y auction will be the bad auction. If not, the market will continues its rally tomorrow off the day session’s opening. Can sell failure at 125-00/04 or 125-20. Or buy w/signs of support at 124-08 OB.

F4 Comments: The analysis favored a sale. The market made it to 125-04 before the sellers entered the activity. This selling was present until the 2Y auction took place. 124-00 held, the 2Y auction was deemed a good auction and the market rallied to close at 125-00+/-. The software generated valid buy/sell signals as the market activity allowed.

ES Monday Morning

The low volume point 785.50 is acting as support. Volume is building in the high 780's on the bounce off the low. There are indications that the Market's pivot point is the high volume at 794.00.

Support below this is at 755.50. If the market moves to the 783 area, sell a low volume rally at 785.50. Support becomes resistance.

Open House

The TradeMaven Inside Edge Chatroom OPEN HOUSE Begins Monday, March 23. The open house will continue throughout the week until Friday, March 27th.

TradeMaven’s Inside Edge is a comprehensive trader’s education forum focused on e-Mini S&Ps and U.S. Treasury Bond Futures that will help you learn the skill sets required to become a successful trader. We focus on the essentials: trade location, trade management, and trading as a business. TradeMaven’s Inside Edge features all of the necessary analytics and execution information in one place to speed up your decision process, keep you on the right side of the market.

The Trader Chatroom for the TradeMaven Inside Edge will open at 7am with a pre-market commentary by Charles Cochran. We will continue to moderate LIVE in the room throughout the day.
For more information on the mechanics of the TradeMaven Inside Edge - click here!
Only TIE software can show you not only historical volume, but the volume most recent in the market’s memory. So you can make the most informed trading decisions. We invite you to attend the TradeMaven Inside Edge OPEN HOUSE March 23rd - 27th, to demonstrate how this software can assist you in understanding the mechanics of futures markets and develop your trading skills. Just Click HERE to enter the traders Chatroom.

Please login to http://trademaven.acrobat.com/r37282848/ (you may need to copy this link into your browser.) Please login to the room as a guest; No password will be required at that time.

Unemployment Friday

Big trading new tomorrow morning is Employment Situation Report. Unemployment is clearly on the rise, but if not as bad as expected we may see a bull Friday. That is a best case scenario; be on guard for the unemployment figures to be worse than expected. then sell the low volume rallies and ride the trend as the market makes new lows.

The Report will hit hte market shortly before 7:30 am Central Friday Morning.

best
Josh Kelne

Charles Comments on the eMini S&P for Wednesday

Exhaustion Bar Trade

Exhaustion bar trades signal the end of the move and occur when the buyers or sellers throw in the towel on their bad trades or hesitancy to enter the market on a trade they saw. The key to this possible exhaustion is the increase in volume compared to the volume in the preceding bars. The key is the reversal from these bar’s high or low.
1. The setup was the market had rallied in three waves from 697.50 to 710.50 and the move ended on higher volume than in the preceding bars.
2. The buying volume decreased in the succeeding bar.
3. Trade entry was on the subsequent bar’s close or upon penetration of the exhaustion bar’s low. Entry price was 707.50 to 708.50.
4. The market hit 703 on the first wave of selling and 699 on the second wave of selling.
5. This trade yielded 4 to 9 points in profits depending upon entry and exit prices.

eMini Rollover to June Contract

The eMini S&P and other Equity index futures will rollover to the June Contract (M9) on 12 March 2009.

The Last Day of trading for the eMini Equity Index Futures will be 20 Mar 2009.

Tuesday's Activity

The 3-2-1 Methodology is based on 3 Rules, 2 Patterns and 1 Indicator.






1. Rule#1 – Low Volume numbers (LV#’s) are support/resistance and should be traded as such. LV#’s stop the buying/selling and can be leaned against for trade entry. If the LV# does hold, the market should be pulled back to the next HV# in the Long Term Distribution.
2. The HV# did pulled the market to it and briefly slowed the activity.
3. The LV# at 703 stopped the market and the market retraced back to 706.
You can use these HV/LV#’s to improve trade location and improved the profitability of your trading.

F Series Charts

The 4 screens (F1-F4) in the attachment show the following studies and timeframes:

F1 Screen

The first screen, F1, is a monthly market profile screen and the data can be split and saved by the user. The long term distribution on the right of the screen holds up to two year's worth of data, which is usually more than enough to capture the long term trend and market’s most recent move. This long term distribution can also be colored to show the number of contracts traded per transaction allowing one to differentiate between small speculators and large institutions (can show three different lot sizes in each price/volume bar). We’re confident that our unique “save profile split feature” is not offered by any other vendor and this one feature alone should make it a consideration for a profiler. It will save a trader a lot of analysis time. The monthly timeframe was chosen to make sure the trader was aware of where the market was, has been and is pointing at a quick glance. Now you can easily integrate the day and week into the very long term and know whether you are early or late in a move and adjust your strategy accordingly.

F2 Screen

The second screen, F2, is the standard 30 minute market profile that allows user splits that can also be permanently saved to speed the analysis/setup process. The distribution on the right of the screen is the long term distribution with up to two year's worth of data. This long term distribution can be colorized to show the number of contracts traded per transaction allowing one to differentiate between small speculators and large institutions (can show three different lot sizes in each volume bar). The long term distribution can show actual contract volume or number of trades at a price or price changes (when contract volume isn't available) to accurately depict the distribution for the periods selected. The volume can be shown at the side of the distributions or superimposed over the distributions. We prefer the superimposed feature, because you can get more history on the screens, which helps one maintain the proper perspective.

F3 Screen

The third screen, F3, is a colorized 30 minute bar chart with volume attached. Red and blue show the prices outside of the value area. Yellow represents the value area. Green is the mean of the volume and magenta is the actual high volume number of the period, when different from the mean. The distribution on the right hand of the screen is the volume distribution for the entire day with the same color scheme as the individual bars. This shows the most recent activity and closest relevant price points, where one should expect opposite activity or a pause. This screen keeps you closest to the market profile information that drives the activity of the traditional market profile user.

The fourth screen, F4 (below), is a 5 minute "equivolume" bar chart that shows the volume in that individual bar on the x-axis and price on the y-axis. The chart reveals a bar's volume relative to the volume of the other bars on the screen; the wider the bar the more the volume in that bar. The bar is further coded to show the volume done on the offer (red) and bid (blue) so you can track the side of the market getting the most volume in any bar. This is a quick fix on the current buying and selling. The chart includes a long term distribution on the right side of the screen to help track the high and low volume numbers affecting the trade. At the bottom of the chart is a bar histogram that tracks the cumulative buying and selling for the day allowing one to monitor the cumulative buy and sell pressure in the market. The greater this number the harder it is to reverse a trend.

F4 Screen

In F3 and F4 we have developed a library of proprietary studies for potential trade recognition (location). These indicators capture the trade setup, the phenomena that trigger a trade and the entry. The four indicators show the following:
1. The letters L and H show whether the market is trending or not.
2. The black up and down pointers isolate and show each rotational high or low for one's defined timeframe. This emphasizes rotational highs and lows that are the market's edges so the trader doesn't miss them. Furthermore, it greatly speeds up the analysis and study of history in the data base.
3. The pink/blue squares show potential turning points or edges in the market by measuring the acceleration and deceleration in market activity over the number of price increments selected; the shorter the timeframe the fewer the price increments.
4. The green circle shows when the market is retesting a previous rotational high or low within as many ticks as the user has selected to accommodate a particular market’s personality and timeframe.
Each of these studies can be adjusted to fit the user's timeframe and trade sensitivity, thereby increasing or decreasing the number of trades to be considered. The proprietary studies are real time, allowing you to take a trade in the signal bar, or after the bar closes like all other technical studies. This real time feature improves trade location over time and is usually the only way to get within a tick of the actual high or low of a rotation. These studies are not mathematical as most technical analysis studies are, but measure raw data, or what is actually happening in the market.

The Volume Map Chart

New the the TradeMaven Inside Edge charting pakage is the Volume Map Chart.
Like the F3 and F4, the Volume Map is color coded to show the Mean price and value area low and value area high. The Chart can be programmed for time periods (default is 3 minutes), tick charts, and reversal bars.

The volume distribution for the current trading session is placed on the left hand side of the chart along with the total amount of trades by price. Like other TIE "F Series" charts, Yellow represents the value area. Green is the mean of the volume and magenta is the actual high volume number of the period, when different from the mean.

Additionally, the Volume Map Chart incorporates an continuously updating value range lines. The range markers provide projected support and resistance indications based on the activity in the current trading session.

The Volume Map comes complete with the Rotational High and Low Markers (Up and Down Black Arrows), the retest markers (Green Dots) and Deceleration indicators (Squares) and "Deep Deceleration Indicators (Diamonds).

The Volume Map provides TIE users with accurate, real-time raw volume data to keep them on the right side of the market.