ER Analysis 1/24/07

[TinGull 10]

Let's take a look at the ER and Market Profile. First of all, you can see that we've had some serious indecision longer term by the following profile:

 

 

We're stuck in a range from 773 to 806. 780 is providing some serious support for the ER as it 805ish. The interesting thing about the ER in this sort of range longer term, is that it still trends like heck during the day. So, let's look at yesterday's and the day before yesterday's profiles:

 

 

The day before yesterday we saw the TPO count at 119/221 favoring the buyers by a nice margin. Then...yesterday...we saw nice buying for almost the whole day. ER follows the TPO count pretty darn well, which is really nice. On 1/9/07 the TPO count was 197/253, and we went the entire range from 772-805 in 4 days. Then on 1/16 we had a TPO count of 284/35 HEAVILY favoring sellers, and we dropped to 780 over the next couple days.

 

Where was the TPO count yesterday? 195/129 favoring sellers by a small margin. We had a value area placed above the previous days, showing us that we want to move up, and TPO counts favoring sellers by a little...some indecision intraday? Perhaps.

 

Price as we sit now is right in the middle of value. We opened like this yesterday. The moves to look for are value area pivots. ER loves that stuff. Look for opportunities of a bounce off of 787.50 to the upside or a bounce off 793.10 to the downside. If we hit one of these, chances are pretty darn high that we'll go through the value area in the direction of that bounce. That could yield lots of points...5.60 to be exact. ER loves to make this move. Also...ER doesn't seem to discriminate which value pivot it chooses to use. Always keep the last 3-4 days of value in your mind, but primary importance on, of course, yesterdays value area. Highs and lows on the ER almost always occur on a value pivot be it yesterdays or be it 3 days prior. Just something to keep in mind.

 

Also, we're averaging 11.5 point range for the 10day ATR. If you're able to see that we're bouncing from a value pivot, chances are very good for a very decent trade. How will I be approaching the day and a trade? Here it is:

 

 

The ER is showing us some downside possibilities right now. We fell below the 34ema and failed to close above it on Friday, and fell back from it Monday, and rallied above it, but couldn't close above it yesterday. The 34ema is a good way to judge value of the Russell. Any close below 780 is a red flag for me. I will be looking at a bounce off of the VAH to bring us possibly lower. At that point, I'll follow the 34ema and when price starts to breach that back to the upside, I'd let go of the trade. I'm going to practice holding on to this bad boy. Vice versa for the upside if the market decides it wants to go that way.

 

Enjoy!

[Anonymous 11]

Very Nice. Thanks for the detailed post. I'm a bit surpirsed to see MAs and indicators on your chart. I guess I'm just biased against them. Never the less, keep up the good work. Learning a lot.

[TinGull 10]

Thanks That daily chart was just me fudging around with Fib stuff. I think it's strange and love to see fun shapes! I dont use it by any means...I've got no idea how to trade with that stuff. As for the moving average...the 34ema is a good judge of value at the moment in the ER2. Works like a charm.

[TinGull 10]

Also, looking at this profile I didn't even SEE the potential for the bounce today:

 

 

We had our low right at POC from yesterday (obvious) and also the high from 1/22, and VAH from 1/19. Very important support there.

[willd 10]

Great stuff Tingull