Inverted head and shoulders on the SPX?

Basically, for the most part you are "getting it" for what you see on your charts. Selling the downtrend in your first drawn circle area would make sense under those conditions (like selling a retest of a low pivot point with delta going negative to new lows for that day at that time - intraday type scalp play set up). Now the second area where you have a drawn oval would be an area you would NOT want to BUY. Why? Because your cumulative delta is beyond neutral from the previous day at a compromised level with most BUY inventory gone. As a result of that BUY inventory being GONE, as shown by a lower cumulative delta from the previous days delta lows, you then get a lower low versus the LOD from the day before.

In your chart example, you have a good set up now for doing intraday scalp or short term intraday position trades. What your chart does not show though for a longer term look, is what did the cumulative delta REALLY look like at those price levels if you combined all trading days for that contract back to the FIRST day the contract traded. :) So my suggestion would be......the very first day a new contract starts to trade, start tracking the cumulative delta at all times the globex is open. As each new trade day progresses, you will then have a clean and pure reference point to monitor cumulative delta support & resistance zones realtime as they relate to current traded price.......make sense? :) This is of course for intraday use mainly, which is a perfect place to start getting your trade set ups honed.

BTW.......I would have been SELLING the heck out of that 1084.00 on up area with what turned into the HOD run (on 3/8)........see the set up? :cool:
 
Quote from AMT4SWA:

Basically, for the most part you are "getting it" for what you see on your charts. Selling the downtrend in your first drawn circle area would make sense under those conditions (like selling a retest of a low pivot point with delta going negative to new lows for that day at that time - intraday type scalp play set up). Now the second area where you have a drawn oval would be an area you would NOT want to BUY. Why? Because your cumulative delta is beyond neutral from the previous day at a compromised level with most BUY inventory gone. As a result of that BUY inventory being GONE, as shown by a lower cumulative delta from the previous days delta lows, you then get a lower low versus the LOD from the day before.

In your chart example, you have a good set up now for doing intraday scalp or short term intraday position trades. What your chart does not show though for a longer term look, is what did the cumulative delta REALLY look like at those price levels if you combined all trading days for that contract back to the FIRST day the contract traded. :) So my suggestion would be......the very first day a new contract starts to trade, start tracking the cumulative delta at all times the globex is open. As each new trade day progresses, you will then have a clean and pure reference point to monitor cumulative delta support & resistance zones realtime as they relate to current traded price.......make sense? :) This is of course for intraday use mainly, which is a perfect place to start getting your trade set ups honed.

BTW.......I would have been SELLING the heck out of that 1084.00 on up area with what turned into the HOD run (on 3/8)........see the set up? :cool:
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Great explenation as allways! Thank you :p

As each new trade day progresses, you will then have a clean and pure reference point to monitor cumulative delta support & resistance zones realtime as they relate to current traded price.......make sense? :)

I think I understand this: Whenever price returns to a pivot point at a later time, I can check to see what the cumulative delta was at this level last time price traded here, compared to this time. Is this what you mean? So I will not know the exact tick level delta, but know how this support/resistance zone is doing overall, and if there is support/resistance to be expected?


BTW.......I would have been SELLING the heck out of that 1084.00 on up area with what turned into the HOD run (on 3/8)........see the set up? :cool:

I am guessing it has something to do with the negative divergence? But not shure which one. There was one big negative divergence compared to the last trading day. Shown here: http://www.sierrachart.com/userimages/upload_2/1236681243_9_UploadImage.png

But there was allso a pretty big negative divergence compared to last time price traded in the 84 area, from 3/6. Shown here: http://www.sierrachart.com/userimages/upload_2/1236683729_97_UploadImage.png
This last image probably shows how the sellers from this price area has not been neutralized because the cumulative delta beeing a lot more negative?

Thanks AMT! I really appriciate how you are answering all of these questions.

cheers, Veggen
 
Quote from veggen:

Great explenation as allways! Thank you :p

I think I understand this: Whenever price returns to a pivot point at a later time, I can check to see what the cumulative delta was at this level last time price traded here, compared to this time. Is this what you mean?
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***YES!
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So I will not know the exact tick level delta, but know how this support/resistance zone is doing overall, and if there is support/resistance to be expected?
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***CORRECT.....you do not need to worry about the exact delta at each tick level (for simple intraday trade set-ups for the most part), to see what we are talking about here for the "look" of the overall cumulative delta as compared to price in the fashion shown on your charts.
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BTW.......I would have been SELLING the heck out of that 1084.00 on up area with what turned into the HOD run (on 3/8)........see the set up? :cool:
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***Look at your chart here..... http://www.sierrachart.com/userimages/upload_2/1236683729_97_UploadImage.png

Look at the first high on 3/8 and then look at the second higher high that same day which ended up being the HOD.....now look what the CD did from the first high to the second one.... :cool:
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Thanks AMT! I really appriciate how you are answering all of these questions.

cheers, Veggen
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:)
 
Well buyers were "layering" in support yesterday after all.......they built three layers when you look at the final distribution. The last and third layer was put in stacked on top of the other two in a zone from 673's to the 677's :)

Buyers put in that third layer right after the AH session started and now they have their buy zone inventory over 20 points in the money.......not bad. Today the bulls will have to hold things up and get a run started that can stick to have any chance of a bottom holding for any period of time. What the bulls do not want here, is continuous runs down to their established and stacked buys zones for multiple retests. :)
 
Quote from veggen:

Master :p, can it be that price went higher, but CD barely got more positive? http://www.sierrachart.com/userimages/upload_2/1236694579_41_UploadImage.png
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When I thought I finally got it, you arrive with this trade :D

I do not understand: shouldn't we see lower CD at higher high in order to enter a short trade?

Doesn't it mean that at higher levels short inventory was lighting a little - not that much at the end - i.e. some of the short holders from previous highs were liquidating a bit?

Thanks for your comments!
 
Thank you so much AMT ... I was beginning to think that reading and re-reading this thread hadn't taken me anywhere.

I finally got the concept, thank you again!!
 
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