My price and volume analysis of ES (hopefully daily)

W

wiesman02

This thread is going to be my price action analysis of the ES…. Or better yet, a price action and volume analysis of the ES using 15 min chart. I am going to TRY and update this daily. I have a crazy schedule. It might not happen every day. We will see.

Purpose:
1) Look back on this days or months from now and see what I was thinking and if I was correct / wrong based upon new found knowledge.
2) Look for criticism of more knowledgeable ET members on my analysis.
3) Provide some insight to others as to how you can interpret a 15 min ES chart.

I will NOT be:
1) Giving my signals away.
2) Responding to rude remarks. If you wish to criticize my thoughts, by all means I encourage it. Please use this form, “ I disagree with your interpretation of candle # x, I believe you should be interpretating it like this ___ “

Also
1) What I am writing is what is going through my head during the trading day. I am aware that I am writing these interpretations AFTER the fact. I am aware ANYONE can do this after the day is over. Please save the arguments regarding this. My main purpose is to make me a better trader. To look back and see what was going through my head at a time X in the past, and compare that to how I look at things in the Y future. I know all the BS that I’m going to get from this. And I’m not going to respond to it. I’m gonna ask the moderators to do their job and keeping this at a minimum.

2) If you have questions or wish to get off topic, please use the PM function.

How to Read my charts:
1) I am in the central time zone. My trading day starts at 8:30am and I’m using 15 min chart.
2) That being said, Candle #1 is the 8:30am candle (830-845). The 9:00am candle is candle #3, 10:15 candle is #7. etc. I will be labeling that in my discussion as 1) blah blah blah… therefore ‘1)’ stands for candle 1. I don’t have time to label all this shit on my chart so don’t ask.
3) You will see lines on my chart. I will usually not be referring to them at all, but if you are curious, the orange line is the 200ema, blue is 20ema, and black is 50ema. My charts are 15 min charts.

I will be providing my last 3 trading days analysis to see if this is a thread you’d like to continue reading. If its not, I don’t need to hear about how much it sucks, or how stupid of a trader I am. I know I'm a stupid, terrible trader compared to the post replying to this thread. I bow to you.

Lets repeat: 1) I know you're a better trader than me 2) I know you make more money trading than me 3) I've only been trading 2 years full time, 4 years total, so you have more experience than I do. Oh, and I'm not spell checking. So tough shit.
 
November 23rd analysis

Based upon the pre-market up trend, it’s reasonable to assume that this market will continue up and that the ‘herd’ will think this also. Let our assumption of the heard thinking this market will go up guide our analysis of the day.


1) Wide spread up bar finishing at the highs. This is a bullish candle. No reason to assume we won’t see new highs.
2) Another up bar, but on decreasing volume. Demand is starting to fall, but supply has not come followed yet. Distribution might commence.
3) Down bar (just barely) on increasing volume. This bar confirms our suspicions that distribution has started. The increased vol tells us the big money is now distributing to the heard. Normally we see distribution occurring in wide spread up bars. Unfortunately, candle #2 was on lighter volume so we can reasonably assume distribution did not commence yet. Supply and demand are about equal.
4 and 5) Down bars on light, decreasing volume. Supply is still overtaking demand here, but due to the light volume it is reasonable to assume that distribution is almost over. We look to see for an increase in demand for the trend to continue up.
6) down bar closing near the lows on increasing volume, almost engulfing the rest of bar #2. Demand does NOT show forth on this bar. Supply resumes. This tells us that big money is not looking to buy these levels right now.
7) this is bar is a test, imo. It tells us nothing other than demand is not showing forth. Supply continues to dominate.
10) Down bar finishes on the lows on average volume. Because volume did not spike very much, we can assume that accumulation did not take place on this bar. Demand is not poking its little head forth, supply runs the show. We wait for lower prices.
13) Many call this a reversal candle. Big spike in volume with open / close about equal near the highs. This is a sign of strength, although the range on this candle is a tad small. Demand is coming in. The big money is unloading to the herd here.
14) No demand up thrust on decreasing volume. Guess there’s no interest in higher prices from the $ that counts. Chop chop choppy BS til cose.
 

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Nov. 24th
Pre-market thoughts. Price is clearly pushing up in an uptrend. I expect prices to continue moving up based upon the trend.

1) No demand down bar closing at the low. Lots of stop triggered on this bar I’m sure locking in longs, and making it tough for those who want to go short to get in. Price is bearish right now.
2) Another down candle with price finishing about 50% from its lows on higher volume. This tells me demand is starting to rush into the market here.
3) News driven wide spread bar with the open / close prices roughly the same. This is telling us that supply and demand are about equal now. The big money is accumulating / covering shorts while the herd is selling.
4) Narrow ranged down bar on low volume tells us that there’s no supply and that a rally is possible.
6) No demand up thrust from the traders that count on decreasing volume. With the previous up bar being wide spread up, it is reasonable to assume the big money was distributing to the herd here.
7) Down bar on no volume confirms our suspicion that there’s no demand, and that prices might continue down.
11) No demand up thrust on increasing volume here with open and close the same. This tells us demand and supply are about equal now. The herd is being chopped around, and direction is unclear.
12) No demand down bar on decreasing volume. Expecting downward action again in part b/c demand is lacking, and the trend of the day.
14) The chop continues. Open / close are equal here. Supply and demand are equal, and volume is low. Low volume at a pre-market support point tells me we could bounce here, but at the same time, this could be a test before new lows. Not something I’d want to gamble with.
15) increased volume up bar finishing near the highs tells me demand is starting to filter on in, and that support area could show more highs.
16) This is not a no demand up thrust bar like the previous 2 waves. It’s a down bar on low volume and very little supply We don’t see new highs on this candle. Therefore, our interpretation of this candle is it’s a test.
17 and 18) still don’t see new highs. Volume still decreasing. We are not seeing supply come into the market, so it is possible we have finished distribution.
19) Up bar, wide spread, increased volume. Stops got taken out here. Based upon our analysis of the previous candles, it’s a reasonable assumption that there’s not enough supply to continue to drive this market down. This is an increased demand up bar.
 

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Nov 26
Premarket action is giving us higher highs and lower lows. Gee, what does that tell us ? I expect bullish price action.

1) Wide spread up bar on high volume finishing near the highs. Sure this smacked a bunch of stops, but also trapping shorts that wanted to get out, and making it difficult for those wanting to go long to get in. All in all, bullish bar, expect higher prices.
2) Wide ranged up bar on lowered volume testing support and support. It is clear that supply here poked its little head but there’s strong support in this area and prices want to go up.
3) Move is getting tired here. Up bar on similar volume closing off the highs. Distribution is beginning to take form here. I say beginning because we should have seen a big spike in volume for clear distribution to be taking place.
4) No demand up thrust here on low volume here. Now we just wait for more supply to poke forth for lower prices to continue and big money to unload to the herd.
5) Supply does not show up, price is still very bullish. Wide ranged up bar closing at the highs on increasing volume tells us many things. Price is bullish. We don’t see a large spike in volume which usually denotes distribution. This move is partially fueled by a short squeeze. We are seeing exaggerated bullish PA, which to me, is a short squeeze.
6) We see another up bar here with prices closing well off the highs. This is an up thrust on similar volume. Supply is CLEARLY showing up here unlike in bar #4. Notice how demand is unchanged but supply has commenced ? In Bar #4 we saw no demand but also no supply.
7) New highs, same as bar #6. Following bar is a down bar. Distribution is in full force. Expect lower prices.
10) Down bar on decreasing volume. Demand is not showing up. More distribution is possible.
11 + 12 ) down bars on increasing volume closing off the lows tell us there’s not enough supply in this area to continue a push down. Price has NOT flip flopped bearish just yet. We don’t see signs of a reversal.
14) Getting towards the end of the day, and the big money pulled a classic move. Pushed it up, hitting thousands of stops only to have it come crashing back down. This is why many pro’s tell the newbies to not trade near the end of the day. Lots of big movement, but tough to trade.
 

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Quote from wiesman02:

Nov 26
Premarket action is giving us higher highs and lower lows. Gee, what does that tell us ? I expect bullish price action.

1) Wide spread up bar on high volume finishing near the highs. Sure this smacked a bunch of stops, but also trapping shorts that wanted to get out, and making it difficult for those wanting to go long to get in. All in all, bullish bar, expect higher prices.
2) Wide ranged up bar on lowered volume testing support and support. It is clear that supply here poked its little head but there’s strong support in this area and prices want to go up.
3) Move is getting tired here. Up bar on similar volume closing off the highs. Distribution is beginning to take form here. I say beginning because we should have seen a big spike in volume for clear distribution to be taking place.
4) No demand up thrust here on low volume here. Now we just wait for more supply to poke forth for lower prices to continue and big money to unload to the herd.
5) Supply does not show up, price is still very bullish. Wide ranged up bar closing at the highs on increasing volume tells us many things. Price is bullish. We don’t see a large spike in volume which usually denotes distribution. This move is partially fueled by a short squeeze. We are seeing exaggerated bullish PA, which to me, is a short squeeze.
6) We see another up bar here with prices closing well off the highs. This is an up thrust on similar volume. Supply is CLEARLY showing up here unlike in bar #4. Notice how demand is unchanged but supply has commenced ? In Bar #4 we saw no demand but also no supply.
7) New highs, same as bar #6. Following bar is a down bar. Distribution is in full force. Expect lower prices.
10) Down bar on decreasing volume. Demand is not showing up. More distribution is possible.
11 + 12 ) down bars on increasing volume closing off the lows tell us there’s not enough supply in this area to continue a push down. Price has NOT flip flopped bearish just yet. We don’t see signs of a reversal.
14) Getting towards the end of the day, and the big money pulled a classic move. Pushed it up, hitting thousands of stops only to have it come crashing back down. This is why many pro’s tell the newbies to not trade near the end of the day. Lots of big movement, but tough to trade.
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good to see wiseman im sure you'll benefit. looks like you got it pretty good.

1) wsb on very high volume. Be wary after this bar because of the high vol.
7) up thrust
13) no demand
14) reversal, clearly aggressive sellling by the pro's.
 
Quote from speres:

good to see wiseman im sure you'll benefit. looks like you got it pretty good.

1) wsb on very high volume. Be wary after this bar because of the high vol.
7) up thrust
13) no demand
14) reversal, clearly aggressive sellling by the pro's.
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seeing as though I'm working graveyard shift this morning, I've got plenty of time to respond !

1) Lets see, I do agree that its a wide spread bar, but the vol was give or take around 150k. I guess its a matter of opinion whether you think its high volume. To me, 150k on the open is not high vol. Now compare that 150k to the last few opens, and yes, its high volume. Also, I do agree to be wary of this bar somewhat. It is not a perfectly clean bullish bar, as if it was, we'd have seen a continuation bar follow. But I do think it was enough to expect higher prices. Does it warrant a trade ? All depends on your risk factor. Definitely wouldn't be maxing out my lots on that.

7) agreed.

13) Lets take a look more in depth. previous bar #12, we see an increase in volume compared to bar #11 with a narrower range (just slightly, but it matters ). This means more supply is required to push this bar down an even narrower range than #11. This also means more demand is showing up in order for the range to be narrower and price to still push down. Therefore, when we see bar #13 as a wider spread up bar with decreased volume, its telling me 2 things. First of all, for bar 13 to end at its highs, supply has dried out significantly. And #2, buying volume has increased relative to the previous bar. So i suppose, in relative terms compared to the morning hours, demand is low. But on a bar by bar time period, demand has increased. IMO, bar 13 gives us no clues as to direction other than demand has temparily overtaken supply and distribution COULD be over. Looking back in time and seeing bar #14 reverse, its easy to say no demand. But if you were trading this at the time, there was nothing telling me that.

14) Agreed.
 
My pre-market thoughts: I'd be surprised to see bullish action today in part due to the pre-market chart. With supply drying up early this AM and forming a nice little base, and lack of support for higher prices with a little doji star deal around 730ish cst, I'm not expecting the bulls to strike full force. Although, it would not catch me off guard. Just dont expect it, but I dont trade off expectations :). Perhaps we see a no demand failed upthrust on the daily chart (candle). That might look like consolidation on the 15 min chart today. I will also be on the look out for continued distribution. That does NOT mean we sell off. Although, if the right pattern occurs, perhaps the distribution could turn into some stronger bearish PA with the longs from yesterday getting trapped.

Stay tuned for my analysis after the trading day !
 
Great day today huh ? We had some consolidation today like I thought, and I did see an upthrust and pullback, unfortunately, it was not on no demand. Not sure whether this was b/c it was the monday after a holiday, or what, but nonetheless it gives some good clues as to tomorrows activity ! Tomorrow during pre-market I'll tell what.


1) wide ranged candle here eating up any supply left in the market, but finishing off its highs followed by a down candle on decreasing volume again finishing well off its lows. These candles tell us two things. First of all, big money is not interested in lower prices as supply is gone. And 2nd of all, they are hesitant about higher prices as confirmed by premarket activity. and these 2 candles. All in all there is price confusion among those that matter, which further confirms are theory that we could be having a consolidation day

3) Up candle finishing making new highs, but finishing well off its its high with a considerate drop in volume. No demand here, but little supply also. This is a weak push up ! Big money is not convinced in the strength of this move so we are hesitant to get in.

4) The range of this up candle narrows and volume continues to decrease. Distribution has not reared its ugly head yet, but we are patiently waiting for it. This candle is telling us all it will take is supply to start coming into the market in order to see lower prices.

5) Ahhh, no demand down candle upthrust. Love these especially when the market is so very weak ! We hit new highs, and immediately retrace.

6) Wide spread down candle on slightly lower volume. 2 things to keep in mind on this candle. First of all, yes, there was a decrease in volume.....slightly....but a decrease. Since it was wide spread down finishing just off its lows due to support, on its immediate descent, demand was nowhere to be found. Supply strongly trumped demand. 2ndly, at the bottom of this candle, we have a strong support area. Wouldn't it be wise to assume if prices were supported at these levels, more demand would come into the market, and the volume of this candle would be considerably higher ? It wasn't, so we assume demand is still weak and lower prices are still possible.

7) Continuation bars. wide spread down on increasing volume.

8) Similar to #7 except we see a slight drop off in volume. Big money is NOT accumulating here like we'd normally see on WSD bars near an exausted move. Instead we see decreased volume, which tells us supply is drying up and we might see some support at the 1086 premarket lows.

9) Many people like this candle as they consider it a reversal candle. Notice it is on increased volume but not a HUGE spike. Usually for these reversal candles to be great signals, they'd need a huge spike in vol. Due to the previous candles actions, that is prolly why we dont see a spike.

10) supply thinning.

13) Big money not interested in higher prices yet.

19-22) Nice little flag or penant forming here after a really pathetic move up. Notice how each bar is very narrow ranged with low volume. While the move up was pretty pathetic, the distribution thats occuring here is equally as pathetic and is almost done. We wait.

23) Nice up bar finishing near the highs on increased volume. Dont see any supply here.

24) continuation bar. Wide spread up finishing on increased volume. One can argue we are seeing distribution here, but I saw this as a continuation bar.

25) Another up bar on similar volume finishing off its highs near a resistance area. Move is getting tired, and some supply is filtering in. Distribution is beginning.

26) Typical upthrust at resistance on super high EOD volume. If you weren't shorting here..... ( shrugs shoulders)..... I dont know what to tell ya

27) distribution.
 

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sorry for not posting earlier. Hectic day. After I got through w/ the trading day, I immediately went to bed. I work graveyard shift.

I have to get ready for work, and I get internet there, but I won't be able to upload the chart while at work so I'm doing everything backwards.

Here's today's chart. In 2-3 hours I'll have my comments up in my next post
 

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Quote from wiesman02:

Not sure whether this was b/c it was the monday after a holiday, or what, but nonetheless it gives some good clues as to tomorrows activity ! Tomorrow during pre-market I'll tell what.
More...

Boy do I wish I gave you guys this info premarket instead of afterwards ! Perhaps it would have been better used in somenoe else's hands instead of mine. Market certainly was tough giving definite signals today !

If you look at 12/1/09 candle, it was on increasing volume with a small range and the intraday activity was clearly consolidation. Well ladies and gentlemen, when you have a high volume, consolidation day, more often than not that means we are going to rally. Now whether that meant we rally 12/1/09, or 12/2/09, its tough to say. BUT, looking at 12/1/09's premarket activity, we are clearly in an uptrend. So that means we more than likely continue that trend. Combined with 11/30/09's chart, we have some good indicators that are telling us bullishness.


1) Wide spread candle closing under 50% of its highs. Big money is not looking for higher prices at the moment.

2) no demand up candle. This certainly is not the PA we are looking for if we are going to continue a bullish run. Warning signs should be going off in your head. You should be looking for supply to come into this market now. And if you are looking into going long, we need to see signs that supply DRYS UP.

3) Very wide ranged down bar on a big spike in volume. This bar will confuse many newbies. They aren't sure what its telling them. But its plenty clear. Distribution is in full force (supply has reared its ugly head), and demand has not really dried up compared to the previous candle.

4) Classic reversal type candle without a large spike in vol..... This makes this candle formation unreliable. lets analyze: Open and close are roughly the same finishing near its highs with a huge push down and then up. This tells us 1) demand does NOT want to go away. 2) Due to the lowered volume, supply is drying up. We are seeing warning signs of a rally but we need more info.

5) Ugly candle. Certainly confused me today. No demand upthrust. Supply shows up. We are led to believe big money is not interested in higher prices right now, but.....

6) This negates the signal on #5. narrow ranged bar on decrease in volume. If this bar showed up on light volume after #5 at the top of an uptrend, this would be confirming lower prices. Due to the fact this is occuring during distribution in a pullback, a narrow ranged up bar on light volume is telling us a rally is possible.

7) Another narrow ranged up bar on light volume....well similar volume. not a very definitive candle to get a reading on PA.

8) Up bar finishing abought 50% off highs on a decent spike in volume. 1) We can see distribution is starting to occur. Big money is unloading their longs to the herd. Higher prices are not supported here. We look to the next bar to give us a clue on direction now.

9) This is a test. Open / close are similar, demand and supply are equal here on light volume.

10) Light volume narrow ranged up bar. Distribution is almost complete. What do we usually say about light volume narrow ranged up bars during distribution ? We expect a rally to commence

16) wide spread up bar on increasing volume finishing near the highs.

17) No demand upthrust seeing new highs. Prices are not supported at higher levels here. This marks a potential top / temporary top in the uptrend. This is important as this is a key resistance area if you pay attention to s/r levels. Distribution is starting, supply is flowing into the market.

18) narrow ranged down bar on light volume. Remember what i said about narrow ranged bars on lighter volume during at the top of an uptrend ? Well, i said it for narrow ranged up bars on light vol, but the same principle holds. Light volume narrow ranged bar immediately during a potential top means lower prices are possible.

21) Down candle..... Failed thrust up. Supply is flowing here.

22) Confirmation of pullback in uptrend. Finally we get a pullback. We should have seen higher prices following candle 20 for bullish action but we didn't. This is when you need to turn 'expectations' to your advantage, IMO. I expected to see higher prices after candle 20 but I didn't. that tells me higher prices are not supported yet. Down we go.

23) Reversal type candle without high spike in vol. Certainly is at a good area to go long, but the lack of a spike in vol makes me hesitant. I'd need confirmaton. Instead, this candles serves as a continuation down.

25) here's that spike we need for a reversal candle to be fairly reliable. unfortunately its at the end of the day where we've got a lot of order imbalances, so its pretty much like a shit show.
 
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