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ES Wednesday 10-5-11


Very interesting finish today which hopefuly will helps us expand our knowledge of the bell curves. At the end of today we blew right through the high volume node of 1102.75 and then preceeded to blow through the low volume nodes ( LV1 and LV2 zones from yesterdays chart) that comprised the 1107.5- 1112.50 area. The market then stoped at our high volume area of 1120.

The rules as I have stated them say that we will come back to test LOW volume and that is why I choose to be more agressive in the low volume zones. They donot state that we will retest high volume and that is why I donot trade at those areas for retests once broken. Like all trading methods this has it's losses and trading at the end of the day is more prone to trend then in the morning. So if you were trading this afternoon it would have been most challenging but here is the interesting part. As soon as the Overnight opened the market dropped like a rock to come back down to test all the way down to our 1107.50 and retest the entire zone...like it should.

here is how the overnight looks as I type...the point of all this babble is that we can count on Low volume being tested but not so much the high volume nodes once broken.
Click image for original size
over
that is low to high volume transition point developing today
Richard..as per my email last night...do u see how I use the low volume that was created today as a target? Some are good at buying / selling at those but I am not....so it is better as a target for me..

Hopefully all can see how we are chopping inside the distribution 1 from Mondays trade...we donot blow thorugh those too often in morning trade except when a report hits and even then it doesn't happen much.....but we are done with the reports....

So far we have spent more time below Mondays high volume price today...so price is still being challenged and bears are trying to stay in control...this is important!!
Yes i see that it did act like a magnet .I saw the 16.75 as a low VOL 12234 contracts were traded there very low conpared to above and below at first it didnt get there it hit 17.00 then boused but came back to it I missed the trade from 22 but thats ok Thank you
I will wait till 07 or 28.00 till 30.00
lets see if fails here at 23.00 3 times it hit
still LV at 16.75...really need to see that O/N high and into the 26 before I attempt any shorts now...they may not give us the chance.....we'll see
on 24.50 and keeping it tight,,,may need multiple tries up here
now we are in that Low area
got 25.. before out 21.75
Looking at LV friday and monday
short 29..alll failures will try to push it up to 1133 if we are wrong today
Thanks Sandoxe, I missed your reply & just found it when researching the posts, what formula would I use to calculate these previous 3 days S/R levels?
regards Brent.T