Inventory Grab Alert 4/30/09!

[fearless9]

Quote from stoneface:

He might be in a different time zone than the ET board itself. That's nothing to grill a man over the fire for...
.Stone

Oops, planet earth does one revolution every 24 hours, or so we are lead to believe.

Logic would suggest that the 17th of this month cannot be discussed in a post on the first day of this month, otherwise we would be the richest and most forewarned of all people to adorn the planet.

regards
f9

 

[SoCalTrader619]

Quote from fearless9:

Oops, planet earth does one revolution every 24 hours, or so we are lead to believe.

Logic would suggest that the 17th of this month cannot be discussed in a post on the first day of this month, otherwise we would be the richest and most forewarned of all people to adorn the planet.

regards
f9

f9,
If you go to "Your Account", then "Edit Options", you can change the timezone and whenever someone posts, it will reflect that timezone.

I'm in Los Angeles and AMT's 1st post in this forum shows-

04-30-09 10:22 PM

So... no need to worry about when he posted what. Lets get back on subject and talk about using Cumulative Delta.

 

[fearless9]

Quote from SoCalTrader619:

f9,
talk about using Cumulative Delta.

Start with a question or two ... what do you think moves ES price and where do you think a price move starts from.

regards
f9

 

[SoCalTrader619]

Quote from fearless9:

Start with a question or two ... what do you think moves ES price and where do you think a price move starts from.

regards
f9

I've already read many of your old posts. One of my favorites was this-

"Water does run uphill .... just ask any windsurfer in shallow water or look at the rain hiting your windscreen when driving.

What is happening is an external force (windspeed) is sufficent to overwhelm gravity.
The markets are similar.
Dont give up on delta and volume, just learn to use it in it's proper context."

I would say that buy/sell pressure (size) moves the market. Size comes in by the "Big Boys" at important areas of Support and Resistance, which also happen to be the areas where AMT calculates net long/short inventory.

 

[rainman2]

Quote from SoCalTrader619:

Would you have been able to make your trade decision just by watching this chart realtime, or is there another piece to the puzzle that you would be looking at for verification?

Also, by looking at this chart, at what point would you have determined that actual "initiated selling" was taking place? Where would you have entered your short trade?

How did you determine that the short inventory pocket was between 883's and 885's? [/B]

the higher high wasn't supported by delta, creating the divergence.

hth

 

[manlycure]

Quote from rainman2:

the higher high wasn't supported by delta, creating the divergence.

hth

I posted my Cum Delta pic earlier in the thread: http://www.elitetrader.com/vb/attachment.php?s=&postid=2411295

Can you zoom in your chart for comparison to this range?

D.

 

[rainman2]

Quote from manlycure:

I posted my Cum Delta pic earlier in the thread: http://www.elitetrader.com/vb/attachment.php?s=&postid=2411295

Can you zoom in your chart for comparison to this range?

D.

here you go...

 

[piezoe]

Quote from riskfreetrading:

I was thinking in the context of futures, where a short is essentially a new contract opened. For stocks, I see what you are saying.

Yes, of course you are right. I was the one not thinking clearly as of course the discussion is about ES levels.

 

[AMT4SWA]

Quote from manlycure:

Seeing is believing. Looking forward to it!

D.

http://www.charthub.com/images/2009/05/03/ES


WOW.....had some bad weather here in TX last night that I had to deal with on the return home......that was fun!

 

[AMT4SWA]

Quote from manlycure:

My calculations (see attached pic) show that total per-tick delta for the 883-885 zone between the 887 spike and the following retest (showing as two vertical yellow lines) grew by +18k. Price drops quickly below 883 after the retest. This is a 10k/bar volume chart.
D.

You are looking for a negative divergence in the delta from 887.00 to 885.75 price highs.....you will NOT always get a delta divergence with a new retest of a recent high (as can be seen when the 887.00 high of the period in question was created during the AH session lower volume environment). Also, you want to be looking for initiated selling (SELLING that stops price from advancing.....SELLERS having more conviction within the traded volume than buyers).

You do not have to have a delta divergence every time a known resistance area (like the 887.00 area) is challenged again by price before you sell that area. While attempting to SELL a high retest, you would LOVE to see a negative divergence in the cumulative delta at that time (higher probability set ups).......you are just not going to ALWAYS get it. ....

There was very solid initiated sell activity as price action attempted to challenge the pre-open 887.00 high.....or I should say there was plenty of indications imo to take shots at selling in the 885's to 883's INTO the selling conviction. After that very good initiated sell reaction off the 885's traded, the buyers that day were UNABLE to challenge that inventory which created and rests in that zone (883's to 885's).

There are also other aspects of Cumulative Delta/Auction Market Theory which did come into play that day imo, but what I have shown here is enough imo to help for a better understanding of how I use the delta.