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Lock's Cable Corner

  • #4,281
  • May 12, 2017 9:10am May 12, 2017 9:10am
I am out. There was a clear bear pressure until the bad news from the US came in. Going long is also risky now, as British fundamentals aren't bright either.
"Don't lose your cool, and you will fare well".
  • #4,282
  • Edited 11:21am May 12, 2017 11:11am | Edited 11:21am
Quoting Lock
If you will not see these back to back poor highs taken out quickly watch out for liquidation: remember that a poor high could also be read as a lack of buyers. So the only way to find new buyers is to go somewhere lower. So monitor carefully current situation. As a personal note: I'm long currently.
Quoting diana91
I am out. There was a clear bear pressure until the bad news from the US came in. Going long is also risky now, as British fundamentals aren't bright either.
Bear & bull: two definitions very unclear for me. Also bad or good news are uncertain terms.
What market generated information are telling us seems to be the more reliable way to evaluate current market conditions. So let's riassume the information provided till now:
pit session opened inside yesterday pit session range: when a market opened inside previous balance the first information we got is that we still are in balance and that no change occurrded from yesterday. The kind of market participants we could find in such environment, generally, are day timeframe traders, meaning the weakest hands possibly. Weak hands generally have a responsive approach to balance range, meaning that they tend to sell at higher range limits and to buy at lower range extremes.
So what happened at yesterday pit range high? Weak hands sold there.
price location close to major levels: as written yesterday and today practically in any posts, we are just above some major references. If, as assumed before, we have weak market participants, is it licit to imagine a break of these major references? Is it possible that these weak hands could find the needed force to break them? I do not think so. And in fact those references are there, ubroken.
current major trend in a top down perspective: we are in an attempted breakout above lower monthly bracket, trying to establish a possible acceptation back inside upper monthly bracket. Then we are in a weekly uptrend with a onetimeframing higher action in the last 5 weeks including current one. On daily we are in a balance environment where the last 3 daily brackets overlap together. What could we have in such environment? First of all we could have a liquidation in order to rebalance too long inventories. And we got a partial liquidation of long inventories yesterday during GB session. Then we could continue in the liquidation if inventories remained still too long from yesterday. A major reversal of current weekly trend up will need time and volume. As written yesterday the liquidation has space to continue lower down to 27745: more than this is possible but in this case it will morph into someting different, meaning new money selling and not only adjustment of inventories become too long.
Ubi maior minor cessat
  • #4,283
  • May 12, 2017 12:05pm May 12, 2017 12:05pm
Note price bounced at yesterday pit low (weak hands buyers) that was also very close to major pit reference 28637. It is the low of the upper monthly bracket and as you see weak hands participants tend to have a responsive behavior at major references and/or previous balance extremes, as written in the previous post. They continue do do what they are able to do. They sold at yesterday pit session range high (2895) then they liquidate, leaving a very bad poor high cluster, then they bought again at yesterday pit session range low(28615), leaving downside a weak low.

And this shows again the importance of market generated information.

Now, as they are both almost perfect tag of previous references the high and the low of current session are both weak levels. So we could remain between them balancing, considering that it is Friday. Or we could see one or more retests of these weaknesses.
Ubi maior minor cessat
  • #4,284
  • Edited 8:18am May 14, 2017 7:44am | Edited 8:18am
Hi Lock, I'd like to have your own opinion on this question.
Below a series of generic profiles with a very mechanical identification of poor extremes (high and low), and I know that mechanical in MP is not a good practice but anyway ...
The doubt is on the last one, the yellow one, when a poor high/low is no longer poor, what is the bound?
If I'm not wrong I noticed that sometimes you consider a vertical 3TPO extreme as a poor one, sometimes not.
Since the context is important, the rule I have given to me to label extremes is that if a vertical 3TPO extreme is also weak (ie tag another reference) then it's poor, otherwise it is not poor (exception: if it's the last period i'll consider it a poor extreme).
What do you think about it?
Attached Image (click to enlarge)
Click to Enlarge Name: TPOpoor1.png Size: 13 KB
  • #4,285
  • May 14, 2017 5:17pm May 14, 2017 5:17pm
Quoting thetail
Hi Lock, I'd like to have your own opinion on this question. Below a series of generic profiles with a very mechanical identification of poor extremes (high and low), and I know that mechanical in MP is not a good practice but anyway ... The doubt is on the last one, the yellow one, when a poor high/low is no longer poor, what is the bound? If I'm not wrong I noticed that sometimes you consider a vertical 3TPO extreme as a poor one, sometimes not. Since the context is important, the rule I have given to me to label extremes is that if a vertical...
Maybe your consideration comes from the fact that sometimes I call an high a "weak" high and sometimes I call it a "poor" high. But the important thing to understend is that these two terms define different concepts. The last 2 profiles in your list are both "good" highs as they are both more than 1 single print. So they are not "poor". At the same time in your example as you said we have not a context in which we could evaluate them as weak or strong. If for example the last one was a perfect tag of a previous exact reference like an other session high, in that case we could describe it as a "non poor" high but at the same time as a "weak" high.

Btw, what is it a "poor" high? Initially the market established an high, then price went up again and bounced at this previous high exactly or a single pip below or above it: so, following the description given for "weak" high, a "poor" high is also a "weak" one.

But a poor high could also be read as the impossibility at that moment in time to find new buyers above a certain level, meaning day timeframes inventories become too long.

So, let's imagine these two different behaviours of market participants:

In the first case we have market participants who decide to sell at an exact reference (the previous high) because for them it is a good and easy to see level at which they generally tend to sell (as day timeframe operators). So this high will be considered as both poor and weak as the following activity downwards will be ruled by weak hands sellers (those who sell at exact references).

But in the second example instead we have market participants who went too much higher and who have built inventories too long, so in this second case they will not sell at an exact reference because they "want to" but because they "need to". (in order to readjust their inventories).
So in this second case (a liquidation of long inventories) we could consider the new high as technically poor (as it has no excess above and there is no new money selling at that level) but not "weak" (from a day timeframe perspective) because in order to continue higher (above this new poor high) price need to go lower enough in order to let invenotires return in balance and in order to find new "fresh" day timeframe buyers (or other timeframes buyers).

It is important to note that what is weak for a particular timeframe operator could be considered good for an other different timeframe operator. So a confusion could occur when I write about a particular level as weak without describing the perspective from which I'm considering it.

This discussion is extremely complex, so excuse me in advance for this synthesis where I try to show you a lot of arguments and topics all together in a so small and brief description.
Ubi maior minor cessat
  • #4,286
  • May 16, 2017 12:12pm May 16, 2017 12:12pm
I don't know if momentum traders who are leading current action will be able to reach the composite poc at 2968, but take note of the fact that A period low is exactly at yes pit unch 2893 while D, E and F periods' lows are all at previous half back 2906. It is possible to take out the yesterday poor high at 29205, eventually trying to fill the old gap up to 29275 and then liquidate the entire weak action. A fail inside or above the old gap will be a clear signal for liquidation. An acceleration above it could insted lead price to composite poc 2968.
Ubi maior minor cessat
  • #4,287
  • May 16, 2017 12:21pm May 16, 2017 12:21pm
Note also that today GB and Pit sessions' initial balances are the smallest of the last months.(10.5 pips for GB and 11 pips for Pit) Clearly this market is currently "boycotted" by major timeframes.
Ubi maior minor cessat
  • #4,288
  • May 16, 2017 1:25pm May 16, 2017 1:25pm
Quoting Lock
I don't know if momentum traders who are leading current action will be able to reach the composite poc at 2968, but take note of the fact that A period low is exactly at yes pit unch 2893 while D, E and F periods' lows are all at previous half back 2906. It is possible to take out the yesterday poor high at 29205, eventually trying to fill the old gap up to 29275 and then liquidate the entire weak action. A fail inside or above the old gap will be a clear signal for liquidation. An acceleration above it could insted...
So they managed to take out yesterday pit poor high at 29205 and fill the gap up to 29275. Now if we will not see acceptation above them (in which case we could continue higher to composite poc 2968), watch out for liquidation, considering who carried price up here and from where..
Ubi maior minor cessat
  • #4,289
  • May 17, 2017 5:30am May 17, 2017 5:30am
Quoting Lock
I don't know if momentum traders who are leading current action will be able to reach the composite poc at 2968, but take note of the fact that A period low is exactly at yes pit unch 2893 while D, E and F periods' lows are all at previous half back 2906.
Quoting Lock
It is possible to take out the yesterday poor high at 29205, eventually trying to fill the old gap up to 29275 and then liquidate the entire weak action. A fail inside or above the old gap will be a clear signal for liquidation. An acceleration above it could insted lead price to composite poc 2968.
Momentum traders failed yesterday during pit session above the filled gap (above 29275) and liquidated a bit but without removing the weaknesses stressed at 2906 and 2893. This is significant because it means that momentum traders are still in controll of current market from yesterday and that their stops are still in place below those levels. Note also that tonight Tokyo bounced exactly at 2906 and this has been followed by an other bounce by GB session exactly at the same level 2906. Carry this information forward if something will go wrong upside below or above composite poc 2968. The absence of major timeframes in this action upside could force weak hands to liquidate if this absence will continue.

If instead new money buyers will pile on this momentum we should see some acceleration above composite poc. And this could be supported by a new gap upside from yesterday pit session high at 29295.

Finally note that we are very close to 2968 that was underlined as possible target in the absence of a significant liquidation.
Ubi maior minor cessat
  • #4,290
  • Edited 2:58am May 18, 2017 2:36am | Edited 2:58am
17/05/18 THURSDAY 09:36+1GMT
MORNING REPORT

Monthly trying to evaluate acceptation back inside upper monthly bracket whose lower limits are 2795 (Tokyo absolute low), 2845 GB, 28637 Pit.
Weekly mid term trend upwards with the last 6 weeks in one timeframing higher (including current one). Daily in one timeframing higher in the last 3 days and in a bracket environment.

So current major timeframes perspective is clearly up. At the same time we saw the last 2 daily brackets overlapping one each other and this could signal an aging of current trend upside. The aging of a trend does not mean it is over, but could anticipate a major liquidation in order to readjust inventories become too long or eventually a full reversal up to come before or after.

Current GB session opened inside yesterday GB range 29055-29775. So initial acceptation of this range is expected and eventually tests above and or below its limits. Note that we are up and down the major composite poc 2968 about which we wrote so much in the last days. It will tend to attract price and without substantial volume will be difficult to evade.

Major references for GB are clearly the highest GB level of current year at 29865 (mid term reference), the highest GB close level at 29405 and the yesterday GB close at 29427. Then we also have yesterday unch level at 2902. In order to have continuation upside we need acceptation above all of them. Without this acceptation upside continuation will be impossible.

Do not forget to check USDX because it left upside a 3 pass GB gap and 2 pass GB gap during yesterday break.
Ubi maior minor cessat
  • #4,291
  • May 18, 2017 3:02am May 18, 2017 3:02am
In case of failure upside or in case of shake out during news remember the 2906 level where yesterday GB tagged previous Tokyo low and that was also a weak level from previous day (Tuesday) left by pit momentum traders. At the same time note the 2 back to back poor highs currently upside at 2976 (tonight Tokyo) and 2968 (current GB).

Note also B inside period of A.
Ubi maior minor cessat
  • #4,292
  • May 18, 2017 3:09am May 18, 2017 3:09am
TYPO
Quoting Lock
17/05/18 THURSDAY 09:36+1GMT MORNING REPORT .... Major references for GB are clearly the highest GB level of current year at 29865 (mid term reference), the highest GB close level at 29485 (not 29405) and the yesterday GB close at 29427.....
Ubi maior minor cessat
  • #4,293
  • May 18, 2017 3:14am May 18, 2017 3:14am
Quoting Lock
17/05/18 THURSDAY 09:36.... Major references for GB are clearly the highest GB level of current year at 29865 (mid term reference), the highest GB close level at 29485 and the yesterday GB close at 29427. Then we also have yesterday unch level at 2902. ....
Quoting Lock
....At the same time note the 2 back to back poor highs currently upside at 2976 (tonight Tokyo) and 2968 (current GB). Note also B inside period of A.
Note A period low 1 single pip above 29427 yesterday GB close and C period low 2 pips above highest GB close 29485 and exactly at 2950 even. C period attempted below inside period B, failed and here we are at the opposite side of B and the poor initial high removed at 2968.

Note price attracted by composite poc 2968 again.
Ubi maior minor cessat
  • #4,294
  • May 18, 2017 3:19am May 18, 2017 3:19am
2976 (tonight Tokyo) taken out too.
We are testing above yesterday GB high 29775: watch out here. We need acceptation above it for continuation upside. And remember all time GB high at 29865: mid term ref for GB.
Ubi maior minor cessat
  • #4,295
  • May 18, 2017 5:28am May 18, 2017 5:28am
30628 is the low of a very important inside week (the third week of july 2016) weekly acceptation above this level could lead price up to the other extreme of that range (meaning up to 33136)
30536 is the 26.09.16 Tokyo poor high, so it is a weak level. We are around 3039 composite poc. Above current price locattion we have an old pit double pass gap up to 30648: in order to correct it we need to wait pit session open.

Note that we got acceptation above all our GB references underlined this morning in the report: highest GB level of current year at 29865 (mid term reference), the highest GB close level at 29405, the yesterday GB close at 29427 and yesterday unch level at 2902. And we wrote that acceptation above these levels was the needed condition for continuation upside.

Note E inside period of D. And F inside period of E. This is an other attempted breakout upside from balance.

Nota also that current price action is building a new gap upside for upcoming pit session open (15:30 +1GMT) from yesterday pit session high at 29905.

Next composite poc upside is at 3084. It is just below a big GB gap downside (3086-3159)

Finally note that we are inside a previous pit gap lower (30265-30648): again, in order to really fill it we need to wait pit session. So consider this if you will see price higher from here before pit open.
Ubi maior minor cessat
  • #4,296
  • May 18, 2017 5:35am May 18, 2017 5:35am
31637 is the upper monthly bracket half back: it will be a major mid term reference in case it will be reached.
Ubi maior minor cessat
  • #4,297
  • May 18, 2017 5:40am May 18, 2017 5:40am
As a final notation consider that 30465 has been a very important go/no go level in the upper monthly bracket. It was the upper limit of the minor daily bracket from 06/04/16 to 11/07/16. It has been highly considered by short term traders in the past and it is not so strange to see that they still use it as reference today: note infact current high at this level.
Ubi maior minor cessat
  • #4,298
  • May 18, 2017 8:47am May 18, 2017 8:47am
Pit session opened with a gap higher from yesterday pit high 29905. If the gap will not be retraced quickly we could attempt the fill of the old gap downside, up to 30648 and eventually up to composite poc 3084. If the new gap will instead be retraced we could be remain attracted by the lower composite poc 2968, returning in balance there. A liquidation is possible considering the structure below. But remember that all timeframes are up, from monthly to daily.

Note that for now the big reference go/no go level 30465 worked once again after months. (at least for now)
Ubi maior minor cessat
  • #4,299
  • May 18, 2017 8:51am May 18, 2017 8:51am
If the liquidation will fail and the gap preserved also remember that we are leaving upside today GB poor high at 30473.
Ubi maior minor cessat
  • #4,300
  • May 18, 2017 9:00am May 18, 2017 9:00am
Now, because pit session has new market participants remember that we have different major refs to consider for it: we opened above the previous highest yearly high 29905 (yesterday pit high) and above the highest pit close 2978. Acceptation is needed above these refs for any meaningfull continuation upside. A rejection from current location down below them with relative acceptation below them could change the environment and stop at least for some time the current rally.
Ubi maior minor cessat
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