04/10

Yesterday I wrote:

holding above 1371.5 – what is in the way? lvn 1380.5/1382.5

Current market picture is below and nothing has really changed from what I said yesterday. I have added something to show balance to imbalance. Speaking of imbalance, look at the imbalance between the volume in value area high and low.

(The drop on Friday was during the overnight session so I continue to use 24 hour in this range).

RTH session yesterday:

Look where yesterday balanced – around the high volume node 1377.

YdayLow was 1373.25, YdayHigh was 1382.75 – range was 9.5 (as I noted +10 from the lows was likely as it is every day).

Todays high is 1380.75

As I look at this I am remembering the words of Larry Williams:

Large ranges give way, most often, to small ranges. Your objective is to establish a position in advance of large price change. It is a classic sucker play to see a market that has been hot, with large ranges for a day or two, pull in the public just before a sideways or congestion move. Most short-term traders are losers. The reason they are is that they go from one hot market to the next because they have no understanding of how the drunken sailor swaggers, how prices move across the great wasteland of their chart books. On the other hand, we who are the knowledgeable few, play just the opposite game. We look for markets that have been volatile in the past and are known for large daily ranges, but have recently produced small daily ranges because we know a large-range day is out there not too far away!

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