Supply Zone
USD/JPY SHORT Hello traders
The price has reached a strong reversal area on the frame today, but the size of the area exceeds 60 points, so we will only look at the liquidity gathering area, which is 133.200. If we get confirmation from this point, we sell the dollar against the Japanese yen. The target is the 131.350 area.
Amaraja batteries Swing trade
Buy amar raja batteries at CMP
Buy 40% of capital at current levels
If comes at 549 to 543 buy 50% another
Sl at 535
Rest keep 10% for avg
Tgt 603 650
Ask your financial advisor before buying
Only for educational purposes
DGSTACC: US500 MACRO ANALYSIS / DIAMOND FORMATION / REVERSAL???In the chart above I have provided textbook matching example of a diamond formation that was entered with bearish sentiment and if followed should indicate a market reversal.
Points:
1. With a Higher Low (HL) being confirmed at the moment next leg to follow should be to the upside.
2. A cross Below 3750 would invalidate this setup.
3. A cross Above 4150 would validate this setup.
CURRENCYCOM:US500
Gold possible pullbackHello Traders
Happy Holidays!
Gold started the week with a bullish move and gap up. The next critical resistance is seen at the Fibonacci 23.6% one-week at $1815, which if broken can lead gold to $1820.
The previous week’s high at $1825 is the level to beat for gold bulls for further gains before the end of 2022.
$1804 offers immediate support to gold buyers. A firm break below would allow commodity sellers to test $1800 and $1797. The next downside level is seen at 200 Daily Moving Average (DMA) at $1782.
We are considering selling gold as long as long as it is below $1820 - $1825 supply zone. Slow movement and consolidation are expected due to thin liquidity in the market this week.
LTHM | Oversold EV Battery Play | LONGLivent Corporation manufactures and sells performance lithium compounds primarily used in lithium-based batteries, specialty polymers, and chemical synthesis applications in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. The company offers lithium compounds for use in applications that have specific performance requirements, including battery-grade lithium hydroxide for use in high performance lithium-ion batteries; and butyllithium, which is used in the production of polymers and pharmaceutical products, as well as a range of specialty lithium compounds, including high purity lithium metal, which is used in non-rechargeable batteries and the production of lightweight materials for aerospace applications. It also provides lithium phosphate, pharmaceutical-grade lithium carbonate, high purity lithium chloride, and specialty organics; and lithium carbonate and lithium chloride for use as feedstock in the process of producing performance lithium compounds. The company was incorporated in 2018 and is headquartered in Philadelphia, Pennsylvania.
Dock price actionDock has been moving in the top trending assets recently so keeping an eye on it i think we need to retrace to have a chance of breaking resistance it could be as little as 3 % see green box on chart red is TP .... we could however revisit major support 6% down
Microstructural phenomenons: option strikesThere's no such thing as round levels , instead:
1) You open the option chain of given vehicle;
2) You notice the step between the strikes that have significantly higher volume/OI than the other ones;
3) for example on ES dem would be xx50.00 and xx00.00;
Without further analytics of the option chain, the very general rule is that these levels usually stop & repel the sharp jumps in prices, and allow the average activity to pass through em with a little stuck around em.
Again the reason is microstructural, some of are hedging current & anticipated option positions on good prices. Usually market allows to do it right after economic releases.
About the example, if you have any platform that offers a liquidity heatmap, try to find that reversal on ES & correlated assets, that moment in time that I market with a circle, you might be surprised.
Microstructural phenomenons: re-positioning 4 real, levels can't be re-positioned, but there's a lil detail.
As explained in "Real levels: positioning and clearing", positioned levels can't switch direction, ie once a level was positioned as support it can't become a resistance, once a level was positioned as resistance it can't become a support. A positioned level can only be cleared with time, price or volume.
However, there are things that do exist and not based on the ways of the system behavior, but rather on some lil details how the sub-systems and the super-system work.
Aye aye, easy, a level can switch directing for a very specific and short period of time, but not due to the principles of how things work, rather by a microstructural reasons. The reason is all of us & common sense. When we scale in near a positioned level, but shortly after it becomes obvious with evidence that a level was consumed/cleared (ie there's no more level anymore), in most occasions there's no reason to take a loss right away, it makes sense to try scaling out at around break-even.
1879 was positioned as support in the end of march 2022, the same time 1788 was discovered as a back level of 1879.
Point 1: we enter @ ~ the level;
Point 2: the level gets definitely proved as a cleared one;
Point 3: we leave at break-even, concentrating the liquidity around 1879 (~ when we've entered);
Point 4: we see the result, a pop.
If we would've dropped much deeper than 1788 (technically said, if we would've contacted another deeper level), that phenomenon would've never occurred (there would've been no1 to scale out at breakeven).
Forex can be owned and tamed...You must first own and tame yourself!
AUDCAD made higher highs until it stopped/turned/started again in the direction to create new lows. New lows started to form which broke below previous price points that had buyers interested (demand zone).
When my alert went off to signal to me that price had broken below, I set my Sell Limit and used a Stop Loss as well as a Take Profit. Merry Christmas !!! New Year next week.
Waiting...US30 - Pretty similar is USOIL, close to the 50% on the D retracement, if price holds at 33285 and gives us LTF bullish confirmation im buying, however if that level breaks ill be looking for sells with end targets back at the DL, but we have imbalances to fill above and the Daily closed strong bullish yesterday so im expecting a small pullback before another push today but lets see!
Let me know your thought!
$LABP First Supply Test and VolumeCrazy volume on this one relative to it's history and .58 supply test and rejection but stock is still hovering above .4 resistance which is promising for longs.
I'm in at .3 and holding for .7 Target, to trim some along the way.
Real levels: pivot highs & lowsThis is the main method of locating the levels that is used everywhere, it's robust & general. Instead of using the actual volumes we infer volumes from prices, the prices that include all the information about everything, prices that consider all the correlated volume.
I think many may know how to find these levels, these are simply pivot highs & lows (aka PHLs).
But aside of understanding the positioning and clearing, the trick is to choose the right resolution.
Btw, an obvious thing I haven't mentioned before: the levels are located, positioned and cleared on the same resolution. Only this way.
So, about choosing the correct resolution, basically you need the lowest resolution possible where a level origin (a PHL) can be found:
1) Choose a unique color for every resolution, start with the lowest resolution possible, like 1Y chart, mark all the positioned levels there, optionally mark the back levels as well, and maybe non-positioned level as well with a dash line. Now repeat the process on every resolution until you hit your target resolution. So if you decide to stop at 1D chart, you'll need to consider 1Y, 1Q, 1M, 1W and ofc 1D resolutions;
2) Don't forget to periodically check and delete the cleared levels.
To be efficient you need to develop a habit of scrolling through all the resolutions you use when you have a question about what's happening.
Clearing by volume with PHLs happens this way:
1) We consider volume to be uniformly distributed along the bar, so at every price inside each bar there's N volume;
2) Consequently, we can simply count the number of bars during positioning, and add 1 to it (PHL is always one bar by definition);
3) Then we count the number of bars during testing, when this number becomes equal to the number of bars during positioning plus one, the level is considered cleared.
On the chart you see I got (almost xd) all the positioned levels from 1M in red, yellow from 1W and gray from 1D.
Live Long and Prosper
Real levels: pivot volume modesA fully serious disclaimer from the beginning: every analysis based on volumes is very unstable and unreliable on most of the assets, hence this way of locating levels is very specific and should be used with care. It can be used if:
1) you trade an asset that concentrates most of the volume (+80%) of all its "correlees", maybe traded only on one exchange, doesn't have liquid option market and OTC volume is not there. Examples are "standalone" stocks that are not part of any indexes, don't correlate with anything & and traded only on on exchange;
2) you trade all correlees together. Example: you trade both Crude and Brent futures, monitoring several active expiration, not only the front contract. Another example: you trade Gold & monitor the ETFs. Or you trade all the bond futures together (with EU as well).
So, if you trade ES futures looking at volumes, and unless you also monitor SPY, NQ futures, QQQ, all the sector ETFs, individual leading stocks like AMZN & APPL etc etc, all the option markets, darkpools & OTC trades. Unless you trade all of em together (prolly at least 100 assets), you need a reality check in terms of relying on volumes.
Not gonna talk a lot about these PVM levels, but anyways:
1) Instead of bar chart you use a footprint/clusters/whatever you call it, and locate volume modes of every bar;
2) A mode that is lower than the previous one and lower than the next one is a level;
3) A mode that is higher than the previous one and higher than the next one is a level;
4) Positioning happens as explained in "Real levels: positioning and clearing";
5) Clearing by volume happens this way: first you need to check the amount of volume that was built at the level since it's origin till the end of positioning. Second, you monitor how much volume builds at the level during the tests. When second volume exceeds first volume, the level is considered cleared by volume.
Real levels: positioning and clearingFrom where the levels originate & about the proper resolutions we'll discuss later. Soz again for the order xD, but I decided to do that in order to highlight 2 of the most important concepts most people seem to miss for centuries. A level can not be broken, switch direction or suddenly stop working. A level:
1) Can be positioned first as support / resistance;
2) Then it will be cleared.
Positioning
After a level finishes it's formation (it's origin becomes well defined and confirmed), regardless of it's type, at this point of time this level is just a level, it's only a potential support/resistance or supply/demand, whatever you call it. In order to become a confirmed support/resistance, a level must be positioned . In other words, a level becomes supply & demand only after its positioning is over, until that it's only a potential supply/demand.
So:
Price comes back to the not yet positioned level for the first time.
The first bar that touches a level initiates positioning, which ends with the first bar that doesn't touch the level (a free bar).
One free bar above the level means your level just got positioned as supply/support.
One free bar below the level means your level just got positioned as resistance/demand.
A positioned level has two prices: front and back.
If it's a supply level, the front level will be the original level, the back level will be the lowest low of all the bars participated in positioning.
If it's a demand level, the front level will be the original level, the back level will be the highest high of all the bars participated in positioning.
All the pictures show literally the same - positioning of levels as supports/resistances. Dash lines are level themselves, which will become front levels after positioning, dot lines are theirs back levels. Circles are the hypothetical origins of the levels.
Case 1: after completion of the 5th bar the level got positioned as demand, high of the 2nd bar is the back level.
Case 2: after completion of the 3rd bar the level got positioned as supply, low of the 2nd bar is the back level.
Process the other cases yourself just to get a feel.
Clearing
After a level got positioned, later it might be tested or not, regardless, eventually it will be cleared either by:
1) Time. Can be elaborated further, but as an "ok" general rule, when the distance in bars between the level's origin and the current bar is higher than 256 bars, almost surely the level has expired some time ago;
2) Price. When price tests the positioned level deep and touches the back level, or a new free bar forms past the front level. Chances the level got cleared;
3) Volume. Depends on the type of a level, gonna explain later.
In essence, clearing of a level means removing the responsive activity from it: limit orders, MIT orders etc.