Been squawking on any media I could to anyone who would listen this last week that we have an interesting, if not historical phenomena showing up on the EminiEdge HeatMap Indicator, and by implication, the ES market. Professional interest is showing up on the daily chart on the retrace to the all time highs recently posted. A lot of traders I talk to will argue this point and question my interpretation of what I see, and that's okay with me. I don't normally make long term "calls" but simply try to let others know one more piece of information that may be available to them. That being said, "Kaboom" comes to mind. If this means what it looks like then we can expect another run to new highs soon. This of course ignores the "Trump factor" where some wild-ass news drives the market wild...
The most common question (or arguement) I receive is "how do you know these are professionals? This is just volume..." or something to that effect. Well, first I'd mention that the HeatMap indicator does not measure simply volume but trades size. Professional traders trade in size where the retail or small trader trades smaller,, maybe one or two lots. This isn't a criticism but an observation. If you want a more detailed explanation take a look at the HeatMap Indicator section on EminiEdge.com. Second most popular "question" is "...how do you know they're buying and not selling it down?" Well, professionals are always looking for value and buying lower and selling higher. This area isn't exactly at the low or high, they have too many contracts to liquidate overall so it's done over a range, on falling prices on the WAY to the low or rising prices on the WAY to the high. Not even the professionals know where the exact low or high is. However they don't typically buy high and sell higher (like a breakout, but of course there are some exceptions to this based on the timeframe being traded). One exception to this worth talking about briefly is when the professionals capitulate. This happens when the professionals are wrong (say what?), and yes, professionals are wrong time to time, and when this occurs they may start liquidating a t lower prices and accelerating price lower. This is not a pretty sight and fortunately not that common of an occurrence, but it does happen. Going with the odds however lets us make the assumption that the professional presence on falling prices is most likely accumulation not distribution. THIS is what the HeatMap is identifying.
So I leave you with this observation to ponder and add to your trading toolbox. In my world, trading with the professionals and not against them is a better bet. Keep in mind this happens across all timeframes and we can use this to make decisions real time. This daily chart is something I'm betting on for some of my longer term investments, but I'll be watching my day-trading tick charts for my intraday trades.
Hope this is helpful to you and as always, if it is, please feel free to share this on any site or post you like. A few suggestions are down the side of the site but hey, go crazy and surprise me with posting somewhere else. Who doesn't like surprises?
Anyway, Thanks and Good Trades!
Guten tag traders!
Well, well, well. All time highs hit today and what a fun day to trade it. Nice couple of long setups and quick profits. Love it when a plan comes together! Sometimes even a blind squirrel finds a nut now and then...
For those that gave me a hard time and even ridiculed my comments (you know who you are)... it's not about right and wrong. It's about reading a chart and making the best assumptions you can based on your trading strategy.
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"Trader Joe" trades the Emini S&P exclusively and is the main influence behind EminEdge.com.
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