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With regard to today's last hour, there are several good reasons to anticipate buying, but for the technical traders, one easy way to understand is to use basic statistics....long story short you simply construct volatility bands based on the previous close....For today, the 2nd standard deviation from that close occurred at (you guessed it) 1382.50...for those who understand basic stats the 2nd standard deviation should include the majority of price action intraday...in other words 1382.50 is the place where you might expect a reversal.

 

Hang on Steve, if the 2SD is likely to contain 95.4% of the trading samples during the day doesn't that mean that there will be extention beyond those limits at some point? 4.6% or 2.3% in terms of volume could account for say 46-92k and 23-46k. Maybe you were talking about price. It seems to me that whilst statistics can play a part, using them in isolation is not a good idea. The 82.50 also happened to be a low volume rejection point and then we did see a good reaction there. Combined, anyone going long or exiting a short had some good information there. Looking back, it was noted by others that the area might be a good one to watch for.:2c:

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Closed this final one 87.25 .... pretty stupid at the end here really... I was in sync with the market all the way until the last 40 minutes.... I did NOT see that buying coming..... I hate getting pissed off, but when the market makes NO sense to me that's how I get. All day it made sense. Now we get tens out thousands bought at 87s, and then bids hold like crazy in 87s? wtf man.... geez

 

There was NO buying on the way down to 83, and it didn't even test a tick below the low... surprising that whoever's buying here is confident that this will be some kind of strong double bottom...

 

A take on this. I wasn't watching, but these might have been my thoughts. Market gapped down and just didn''t have the legs to close it or even get to the 91.50 area. Wasn't surprising to then move lower and a number of us did take a short. The market then stopped at possible support at 1382.50, 8.25 points from high but only 4.50 points lower than the open. A failure to then get back above 89's gave shorts some confidence yet new lows were not put in. OTF shorting here? Probably not. So in a day that could have ellicited greater activity, perhaps day traders were the most active. No break lower in this case = shorts cover.

 

Could be wrong but it's a thought.

 

attachment.php?attachmentid=28127&stc=1&d=1332494225

2012-03-23.thumb.jpg.7f25759bd7ca136d35485feb95c2fca6.jpg

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This morning I see that we tested the upside of the range 1395.25 and are on the other side @ CLVN 1382.50 which held yesterdays low...

 

Question this morning are we going to stay inside this range or breakdown to the next levels:

 

Key levels down 1377.00 NVPOC & CLVN 1376.00.. those are my eventual targets for this move though "when/if" is the question...

 

Based on the selling in other markets we should continue to see more exploration on the downside..wheather we will get more today of course is the question... I suspect we will especially if 82.50 is breached... :2c:

 

 

New Home Sales: 9a cst

 

I am going to try to pick my levels more carefully today since I flip-flopped (political term) around yesterday and turned a good day into poop... I started chasing my P&L to bring my day back to where it was after my morning shorts... Got to trade what the market offers..

 

When my brain starts reversing it's view and I don't have outside locations the odds go down for me... sometimes I get caught up in the micro and lose sight of the macro... Longs yesterday were not the play...the close was a bitch... CLVN at 82.50 is important - if we breached it 77.00 was possible but trade location for that was not good for me... otherwise the short was a reasonable play... the rejection of 82.50 was not anticipated and a long off there would have paid well, however, I for one cannot switch my view on a dime... especially when I am geared to working a short.. a double bottom was not on my list of probabilities and by the time I knew it was not going to breach - the ship had sailed without me...

Edited by roztom

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Could be wrong but it's a thought.

 

Well it's not wrong or right, just your interpretation of what you saw in retrospect. I was absolutely on fire yesterday with my read of the market, and I was only shocked because the last few minutes threw me for a loop.

 

The reason that I expected more downside was that even though there was supporting volume at the very bottom on the first push to 82.75, and then a low volume touch of the low at 82.50 -- a classic buy for me -- there was just not much sign of buying on the way down... it seemed odd to me that it would push back up so high, so fast, with no sellers along the way really trying for one more push at the low. And with not too much buying from the low of 82.50 into the closing minutes, we then see a huge surge of volume all the way up at 87.50 -- and then THAT area is supported heavily by bids when sellers tried to short it. It just seemed out of place to me, all the way around.

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Yeah I think there's a chance we'll see lower prices again today. Poor low yesterday Notes up and up and the chance of a VPOC shift for the week. Not the be all and end all, just interesting. Here's a chart of what I am seeing:-

 

attachment.php?attachmentid=28129&stc=1&d=1332506979

 

I think there's still a chance of a rally too. Getting back towards 1399 area and back above Monday open would surely be something to look at to the upside if we were to get going. New Home Sales is likely to me anyway, to be a distraction if anything to the structural changes right now. But we'll see! :missy:

2012-03-23_2.thumb.jpg.b75fc50d55aace7ae167cfc24521fecb.jpg

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With regard to today's last hour, there are several good reasons to anticipate buying, but for the technical traders, one easy way to understand is to use basic statistics....long story short you simply construct volatility bands based on the previous close....For today, the 2nd standard deviation from that close occurred at (you guessed it) 1382.50...for those who understand basic stats the 2nd standard deviation should include the majority of price action intraday...in other words 1382.50 is the place where you might expect a reversal.

 

Well, 82.50 was the prior low of the day, so it was no surprise that there were buyers there... That was a scenario in my mind I had planned for, but I simply didn't see the level of buying I would expect to take it that high.

 

You say that you construct SD bands based on the previous close. Speaking of basic statistics.. volatility can't be based on a single value (a close in this case) -- so, what is the data set on which you are measuring volatility?

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Well it's not wrong or right, just your interpretation of what you saw in retrospect. I was absolutely on fire yesterday with my read of the market, and I was only shocked because the last few minutes threw me for a loop.

 

The reason that I expected more downside was that even though there was supporting volume at the very bottom on the first push to 82.75, and then a low volume touch of the low at 82.50 -- a classic buy for me -- there was just not much sign of buying on the way down... it seemed odd to me that it would push back up so high, so fast, with no sellers along the way really trying for one more push at the low. And with not too much buying from the low of 82.50 into the closing minutes, we then see a huge surge of volume all the way up at 87.50 -- and then THAT area is supported heavily by bids when sellers tried to short it. It just seemed out of place to me, all the way around.

 

Yes..not what I anticipated either... I read it in a similar fashion after my long higher up got taken...

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Poor low yesterday

 

I'm surprised you call yesterday's low a poor one -- is that because of the DB? I would think the swift fashion with which it bounced off the low to qualify for your definition of a "good low" .. no?

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I'm surprised you call yesterday's low a poor one -- is that because of the DB? I would think the swift fashion with which it bounced off the low to qualify for your definition of a "good low" .. no?

 

Indeed and yet why did it need to test a swiftly rejected level twice?

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I'm surprised you call yesterday's low a poor one -- is that because of the DB? I would think the swift fashion with which it bounced off the low to qualify for your definition of a "good low" .. no?

 

Josh: I got to go with the poor low also... It is a Double bottom but there is no tail.. In MP terms I think it is called a "local" bottom... which means it will get tested and probably taken somewhere down the road...

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Indeed and yet why did it need to test a swiftly rejected level twice?

 

Thank you... duh! :doh:

Yesterday, I mentioned the buying tail being negated by further trading into that area, but I did not think about this fitting into your definition of a "poor low" ...

 

Isn't your 3/19 high a poor high as well still?

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Thank you... duh! :doh:

Yesterday, I mentioned the buying tail being negated by further trading into that area, but I did not think about this fitting into your definition of a "poor low" ...

 

Isn't your 3/19 high a poor high as well still?

 

I think it is, which means after they wash the longs out we will eventually make new highs.. :2c: Upside not done..

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Isn't your 3/19 high a poor high as well still?

 

I think it is, which means after they wash the longs out we will eventually make new highs.. :2c: Upside not done..

 

Yup.

 

I think 1389.00 on open could be an important test. Yesterday afternoon high(89.25), Overnight VPOC(88.50), Vol VA high(88.75), VA high(89.00) and MP "ledge"(89.00) could act as a useful pivot.

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Hang on Steve, if the 2SD is likely to contain 95.4% of the trading samples during the day doesn't that mean that there will be extention beyond those limits at some point? 4.6% or 2.3% in terms of volume could account for say 46-92k and 23-46k. Maybe you were talking about price. It seems to me that whilst statistics can play a part, using them in isolation is not a good idea. The 82.50 also happened to be a low volume rejection point and then we did see a good reaction there. Combined, anyone going long or exiting a short had some good information there. Looking back, it was noted by others that the area might be a good one to watch for.:2c:

 

Actually there are some who use only statistics to trade, and they do so fairly successfully. To each his own I imagine....I consider this data (calculating volatility bands) whenever price moves beyond my local time based pivot range (beyond the range of the previous day & week).

 

In this market moves of 2 standard deviations are often areas where reversals take place. At the very least I can count on a reaction there that is worth a few points. In a market populated by other professionals with similar training I am probably going to take it if it shows up...and looks good on the tape.

 

The other consideration is how it is calculated. Most folks are math challenged and don't make the calc correctly....

 

I agree with your assessment, I also think of it as just one input....

 

Good luck today

 

Steve

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Yup.

 

I think 1389.00 on open could be an important test. Yesterday afternoon high(89.25), Overnight VPOC(88.50), Vol VA high(88.75), VA high(89.00) and MP "ledge"(89.00) could act as a useful pivot.

 

95.25 1 pt ovr CLVN 94.25 looks like they squeezed some more shorts up there... CLVN key obstacle for longs, IMHO

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Yup.

 

I think 1389.00 on open could be an important test. Yesterday afternoon high(89.25), Overnight VPOC(88.50), Vol VA high(88.75), VA high(89.00) and MP "ledge"(89.00) could act as a useful pivot.

 

Did you forget to add "Yesterday's Close" (89.00) to the list...?!? :D

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Took scale 84.50 holding balance... CLosing Swing Low 84.00 ...I look at those as obtacles :missy:

 

If we get through yest low I am targeting 77.00 area as prev posted..YMMV

Edited by roztom

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