Inventory Grab Alert 4/30/09!
- Thread starter AMT4SWA
- Start date
- Status
Quoted from the previous thread:
"Price will NOT trade through that zone of SHORT positions held (area
of "NET" SHORT HOLDERS) from the last time price had traded in that
area, until those net short holders go neutral."
A few of questions on the above:
(1) Wasn't the run up to 957.50 today qualified as a "trade through zone"?
(2) Would you consider the 946-948 short holders that didn't bail out as "reckless" or "unfortunate" (although lucky in retrospect as price plunged through the zone later on)? Would they bail out if they could? Was it out of choice or lack of opportunity (AH, limited liquidity, etc)?
(3) Would you consider staying in the 947/948 short position like the 946-949 inventory that didn't bail out? After all, if you missed the 955+ short entry after bailing out at 948 (at b/e), you'd incur just as much agony as exiting at 942 on the 947 entry (or even more agony, because you'd at least collect 5 pts at 942, but get zlich if you missed the 955+ entry).
Have a great vacation!
AMT saw your two charts, absolutely artwork, really!!!!
A clarification/question: price break above the 49s was rejected, so the 46 area on the low side was defended as you mentioned at the 47 and 46 touches. I do not see that large an inventory in the 57-53 area, but becomes sizeable if you account for the "defends". I'm I calculating it correctly in that there's about 10K inventory in the 57-53 zone and just under 30K between 57-46 zone?
A clarification/question: price break above the 49s was rejected, so the 46 area on the low side was defended as you mentioned at the 47 and 46 touches. I do not see that large an inventory in the 57-53 area, but becomes sizeable if you account for the "defends". I'm I calculating it correctly in that there's about 10K inventory in the 57-53 zone and just under 30K between 57-46 zone?
1) - The zone was traded through in price but the inventory held (during a somewhat rare AH session news release with lower volumes than during a cash session type new release, and price right at the base of a major pocket of held inventory) so this is not the norm by any means (but it can play out like this on occasion). Price has magnified short term reactions in lower overall volume environments like we had pre-market today at 08:30 CST. Sometimes price will be "allowed" to stretch a zone if there is the ability for "holders" to price improve on their holdings......I think we saw that today.
2) - Along with question #1, I do think commercials were already willing to let price trade to a certain level (while they took advantage themselves with price improvement) before they would initiate new selling to cap off the short term price reaction. From what I have seen in the past, you could say the commercials "allowed" price to trade to a certain distance from their core holdings....that would be the better phrase imo. Also, those same commercials probably had some remaining held LONG inventory from lower levels which they finally expended to weaker hands with the news reaction pop. I know some call these type of moves "wash-n-rinse" as a dramatic price reactional move will be used to catch breakout traders and turn them into the weaker hands (while you expend your profitable held inventory into their hands). Once this inventory transfer is complete, then new opposite positions are initiated to drive price against those new weaker hands.....next as the weaker hands dump out of their breakout trades, they end up adding order flow to push the price even more in favor of the "drivers" creating a quick wash-n-rinse move.
3) - The reason I let go of my 947's/948's entries as price traded to 947.00 just before news release is, I don't already know what the commercials were going to do....so I had to play it safe. Commercials had the obvious advantage of already knowing what their plans were for the news release reaction. Not knowing what they were going to do specifically, leaves me in a non-optimal situation if I had just held all positions through the news release (what if I held all and then commercials bail on all inventory as we traded through the 955's......heck, price could have made a move to 965's easy).
The smart play in my situation was to just bail at b/e on held inventory, and then hope for a good spike in price to find a new entry with price improvement (if the commercials were going to fade the move....which they did). On the other hand, I would have been screwed if the number was real bad today and price would have dumped 8 to 10 points on the news. From all indications leading up to the actual news release, it sure seemed someone (hahahaha) knew that number was going to be decent today
I felt very assured today giving up my previously held inventory that I would get a new opportunity to re-enter with some price improvement (and start off fresh with new full sized scale in entry levels). All in all, the day worked out well as the news spike was faded hard followed by that excellent breakdown sell off to the lower 930's Correct.....the core holdings are still concentrated at the lower zone. The new net short inventory at 957.50 to 953's is not as significant, but this new inventory is located at the HOD area so I will track it (at the "edges" of our current range and at our high of a multi week rally).
Quote from AMT4SWA:
Last time I was out there, I busted "riskfreetrading" on the "Delta Crapper" ride.......poor guy, he should have wore his "depends" :eek:
You're actually a funny guy (don't ask me "funny how, do I make you laugh?", you know the scene) . . . . go figure a star trader with a funny guy inside . . . never seen those kinds before . . . "traders" always seem agitated/nervous/paranoid . . . I've seen quite a few over 9 years . . . but proly all the shitty ones
Anyway thanks for the time and for your insightful explanations. I hope you have a good vacation . . .
Quote from AMT4SWA:
We be havin dem rotaaaaaashaaaaans maaaan!
http://www.charthub.com/images/2009/06/05/ES__CD.png
I've been reading this entire thread so I thought I generally understood what was going on with determining zones, but then I see this chart.....and realize I have no idea at all.
The chart shows 2 'new delta zones' on it. What makes those a zone? I just can't see it
With regards,
MK
It is real simple.......those were two zones that formed UNDER current price as a result of Friday's distribution (remember that delta zones most often form at the "edges" of a days distribution.....like a HOD or a LOD). These are minor levels or what I would call "speed bumps" if the market were to start selling off (price may bounce off these type zones once before the uptick was sold again and price would drop down through.Quote from MidKnight:
The chart shows 2 'new delta zones' on it. What makes those a zone? I just can't see it
With regards,
MK
The zones I noted on Friday's chart are not at all significant like all the resting inventory ABOVE current price......but the first zone and then the second zone formed Friday did contain price throughout the day (first zone was neutralized by strong LONG covering on the markets second leg down which looked like a LOD test run). The second zone from Friday which formed is the unique situation when you have a zone that is not exactly at a LOD or HOD volume distribution (the zone formed on a retest of a HOD or LOD run.....this is exactly what we had on Friday with the higher low volume distribution).
In our current market environment, the MAIN zones I am paying close attention too are the upper zone of 946's to 949's (with a sub zone at 953's to 957.50), and the lower zone of 880's to the 876.75 level. These are what I would call our bigger picture OVER / UNDER Delta Zones........at this point, if price breaks through and neutralizes either of the zones then price will range extended imo (a minimum of 20 points extension imo for our current scenario). Price is range bound now in roughly a 75 point range, and eventually we will breakout one way or the other with some order flow energy!
- Status