All indicators have better and worse days and today has been a really good day for the XBP Indicators. With clear signals and easy reading of the market action. Let’s review the key moments and levels of the day.
(1.1) We knew from our weekly review or previous posts that 1940 was a key volume level. Today during the opening session (08:30 to 09:00 CMT) the market bounced twice from that support at 1940 and the second time, right after 9 o’clock with a green high volume bar. Once the market forces found support, as seen by the red horizontal line from the XBP BB SR Levels indicator, the market rallied.
(1.2) Reading the indicators during the day we knew that 1950 was a key level. It was the Intraday Session (before the open) high and as well the Open Range High (both seen with the help of the XBP Key Market Levels indicator). It was obvious to the clever trader that many stops were placed behind that level. The big volume is seen entering the market (that cluster of blue high volume bars) and then a key action happens, the market forces flip to the bull side, as seen by the flip in the XBP BB SR Levels indicator, from a resistance (white horizontal bar) to support (red horizontal bar). Immediately after the market rallies 5 points.
(1.3) Then at around 1955 the break comes signalled by a big volume blue bar and the change in market forces to the bear side, seen with the resistance white horizontal line plotted by the XBP BB SR Levels indicator.
(1.4) This moment, the break below the VWAP is a trade that is based more on experience that anything else. It’s easy to see that the retail traders that now flipped to the long side, placed their stops behind the “”safety””of the VWAP level. Easy money again! Big volume blue bars are seen breaking below that VWAP and pushing the market all the below 1940 and reaching 1930, which was the bottom of the Intraday session as well.
Unfortunately today doesn’t give us a clue of what will happen tomorrow. I consider today’s action a “by the book” trading day, where the big guys went after the stops of the small ones. So eyes wide open tomorrow.
The important take away of today is that the XBP indicators allow you to see the action clearly and with the knowledge of how the market operates (basically big guys chasing each other stops) you could have profit so much from the action.
Good luck tomorrow!