MAPPING THE MARKET PART 1

To understand the mapping of the market for Wednesday,you have to go back to the prior evening.  The market flashed a long hold at 1311.5.  This is a point where the market dynamics went from a short bias to a long bias.  Institutions will use these points to enter, and as implied, hold long or hold short.  These point  are one part of their investing strategy, and additional spread entries can occur above or below the initial flash.  hey will accumulate at varying points, and distribute  in a similar manor.  It is not in their interest to load the market and cause a large swing. All swings will be managed, and over time.


MARKET OPEN:

Market mapping is a technique of determining where the PA is most likely to be contained, or break out.  Our long and short brackets were in place.  The first trade actually came in pre-market and it helped to determine an additional setup for the day; we would look for additional failed breakouts.

Price had moved some six point from the hold point, and price seems to return to check important inflection points.  The market does not know this, it merely reflects the psychology of the trader that KNOWS certain points are important.  After all, the financial media has made it a point to convince you these numbers are important.

That test of the hold point was a long entry, and it led to another failed break out.  But this FBO was also a lower high, suggesting a move lower.  With our map "in hand" and a cooperative market, shorting became fashionable.

The market made an important double bottom in the 1306.5 area.  With the break of the EMA, we ended the day with a long.