2020-06-22: Intraday ES Review

The big picture at close:

The setup

The above screenshot is the main intraday screen that I use. On the left panel is a ticks chart where each bar equals to 4181 ticks (Fibonacci number) while on the right panel is a 2 minutes chart. I use the ticks chart to plot computed indicators:

  • ALMA moving average with a window of 40 (yellow moving average line)
  • ALMA moving average with a window of 20 (white moving average line) + trigger ALMA moving average for buy/sell signals (light blue moving average line)
  • Bollinger bands (out-of-the-box ThinkOrSwim indicator)
  • XBP Efficiency Ratio (first lower indicator) that calculates extreme oversold and overbought levels.
  • XBP Tape Speed (second lower indicator) that calculates the speed in which each tick bar has been completed

I use the 2 minutes chart to plot non-computed indicators. We can understand them as market evidence or direct interpretation indicators:

  • XBP Key Levels which plots different significant price levels from the current and the day before intraday action such as: yesterday’s high, low and close; overnight high and low; today’s high and low; and Fibonacci retracement levels.
  • XBP TICK which plots the high and the low of the $TICK market internals indicator
  • XBP Advance Decline indicator which plots the Advance/Decline All Markets market internal indicator

Both charts share the following indicators:

  • XBP Price Bars which turns blue those price bars that have a significant higher volume and yellow those that have a significant lower volume
  • XBP Vertical Time Line which plots vertical time lines every 30 minutes and identifies with different colors the opening, the end of the opening session (30 minutes after the opening), noon and close

The analysis

There are 3 key moments worth our attention. At (1) the market has recently completed the first 30 minutes of the day, what is known as the opening session. We can see that in the right chart, the time based chart, price is approaching a key level, the overnight high (dashed purple line). On the left chart, the tick based chart, the XBP Efficiency Ratio indicator is giving extreme overbought signals with readings in the +80 mark. Once price starts the downtrend, confirmed by the early signal given by the crossing of the ALMA moving averages (red dot on the left chart). It is safe to enter a short position. The only indicator that is missing for confirmation is $TICK but extreme reads on this indicator are not that common (these days are becoming more common but it is not the norm).

At (2) price finds support in two key levels that can be easily seen on the right chart; yesterday’s close (dashed white line) and 50% Fibonacci retracement (dashed yellow line). At the same time $TICK prints and extreme oversold read. Meanwhile, on the left chart, we see 3 blue price bars with high speed readings (purple dots) which signal a sudden an important volume occurring at that price level. Also, the XBP Efficiency Ratio indicator prints an oversold bullish signal. With all our indicators showing a bullish opportunity is time to close the previous short position and open a long position.

Finally, at (3) we can trade the price reaction to the strong support level at the overnight high (dashed purple line). We saw previously that this level acted first as a resistance at (1) to be later broken with a violent move at noon time (dashed yellow vertical line). Normally, price levels that are broken with long strong bars tend to act as good support/resistance levels when retested. At (3) we can see an extreme oversold read in $TICK as well as a good number of time bars trying to break the support. Once price gives up the attempt to break below support it raises again for our last long trade.

There were more trading opportunities than these 3, there is one between (2) and (3) where we have an extreme overbought $TICK reading plus an overbought print in XBP Efficiency Ratio. This could have been a good short trade as well. There was lack of key price levels, so it was a bit out-of-context for my liking but nonetheless a good trade.

Getting the XBP Indicators

If you are interested in using the XBP indicators, simply send me an email and we will complete the transaction using PayPal. The price of all indicators for a life-time license is of USD 100, just 2 E-mini points.

PayPal link: paypal.me/xbptrading

Why there is no a “Buy” button in the site? Well, because I’m not a company. I’m just a trader. My business is not to sell you an indicator. The $100 is just an appreciation token for all the time that I dedicated to craft the indicators and to write this blog 🙂

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