ELV buying opportunityNYSE:ELV buying opportunity, in my opinion.
Elevance Health, Inc. (ELV), formerly known as Anthem, Inc., is a health benefits company that provides medical, pharmaceutical, dental, behavioral health, and other insurance-related services to its members. It operates through affiliated health plans, primarily under the Blue Cross and Blue Shield brand, in the United States.
Key Information:
Ticker: ELV
Sector: Healthcare (Health Insurance)
Market Cap: ~$100 billion
Business Focus: Elevance Health provides a range of health insurance products and services, including individual, group, and government-sponsored health plans. The company serves millions of members across the U.S. and is focused on improving healthcare outcomes while reducing costs.
Recent Developments:
Elevance Health is one of the largest health insurance providers in the U.S., playing a key role in the managed care industry. The company has been focusing on digital health and data-driven solutions to enhance patient care and outcomes. Given the increasing focus on healthcare technology, they continue to invest in improving access to healthcare services while managing costs.
This stock is considered a relatively stable investment in the healthcare sector, benefiting from the growing need for healthcare services and insurance coverage.
Centered Oscillators
It can potentially drop to the equilibrium of last weekIt can potentially drop to the equilibrium of last week
I will be looking to position myself with my students and followers as highlighted on the chart if we get the confirmation.
Accumulation / Manipulation / Distribution
- No liquidity raid = No trade
- Never buy high and never sell low
“Adapt what is useful, reject what is useless, and add what is specifically your own.”
Dave FX Hunter ⚔
Nvidia Is waaay too hotEven though it is possible for price to go beyond the 3rd STD, It usually doesn't remain there for long before it has to cycle back to test lower levels. However, hype stocks can lead people to keep buying in fear of missing out. We all know that is a rookie mistake. That's why, even though NVIDIA is an awesome company, I would instead prefer to buy at a discount.
No one knows what price will do tomorrow. But it's best to have the odds on our side. And when a situation seems risky, even though it's promising, it's usually the best just to step back. Even if you have to let go a great opportunity where price rises, you will still be better off. Because a strategy consisting of chasing the trend will inevitably end poorly. The correct approach is trying to find opportunities where the price isn't too hot, and you believe in the future of the company.
One must look for ways to determine if a new trend is forming. Not trying to catch the current one. If the price is already in a clear trend, it's best not to jump in right away, but look for a cool off before taking a position. Also, when considering individual stock's it's important to study the related indices as they will give more context to where the stock is in contrast to its pears with similar situations.
By looking at the CME_MINI:ES1! and CME_MINI:ES1! It's noticeable that these indices are also overheating. Just to be clear, I don't believe we are at the peak yet, but we will soon be there. Just be patient, don't tell price what to do, let it hit you about its next move and prepare for all scenarios.
Is Bitcoin's Breakout from Accumulation Channel a Sign of FurtheBitcoin, the world's largest cryptocurrency, has recently surged past the $68,000 mark, setting a new local high and confirming its bullish uptrend. This significant breakout has ignited excitement among analysts and investors, who are closely monitoring the cryptocurrency's next moves. As Bitcoin continues its ascent, many are speculating about the potential for further gains and the factors driving this momentum.
One of the key factors contributing to Bitcoin's recent price surge is its breakout from a long-term accumulation channel. This technical pattern, which has persisted for over seven months, indicates a period of consolidation and accumulation before a potential price increase. By breaking out of this channel, Bitcoin has signaled a shift in market sentiment and a renewed bullish momentum.
Analysts and experts are closely examining various indicators to gauge the strength of Bitcoin's uptrend and identify potential resistance levels. The Relative Strength Index (RSI), a momentum oscillator, is currently hovering near overbought levels, suggesting that a short-term pullback may be necessary to consolidate gains before further upward movement. However, the overall trend remains bullish, and a break above the previous all-time high of $69,000 could signal a more extended rally.
In addition to technical analysis, fundamental factors are also playing a role in Bitcoin's price appreciation. The growing adoption of cryptocurrencies by institutional investors and corporations is driving demand for Bitcoin as a store of value and a hedge against inflation. Moreover, the increasing use of Bitcoin for payments and remittances is contributing to its mainstream acceptance.
However, it is essential to approach the current Bitcoin rally with caution. The cryptocurrency market is highly volatile, and prices can experience significant fluctuations. While the long-term outlook for Bitcoin remains positive, short-term corrections are a common occurrence. Investors should be prepared for potential pullbacks and have a well-defined risk management strategy in place.
As Bitcoin continues its upward trajectory, several key factors will likely influence its future price movement. The regulatory landscape, particularly in the United States, will play a crucial role. Favorable regulatory developments could further fuel Bitcoin's adoption and price appreciation. Additionally, the macroeconomic environment, including interest rates and inflation, will also impact investor sentiment towards risk assets like Bitcoin.
Furthermore, the competition from other cryptocurrencies cannot be overlooked. While Bitcoin currently dominates the market, the emergence of new and innovative projects could potentially challenge its position. The development of scalable blockchain solutions and the introduction of new use cases for cryptocurrencies could impact Bitcoin's market share.
In conclusion, Bitcoin's recent breakout from a long-term accumulation channel has ignited excitement and speculation about its potential for further gains. While the overall trend remains bullish, investors should approach the current rally with caution and be mindful of potential risks. By carefully considering technical analysis, fundamental factors, and the competitive landscape, investors can make informed decisions about their Bitcoin investments.
Halliburton’s Potential DowntrendHalliburton tried to rally in late September and early October. However, some traders may see evidence of a downtrend.
The first pattern on today’s chart is the bearish-flag breakdown early last month. The oil-field service provider hit a 23-month low soon after, contrasting with the upward path of the broader market. That’s a potential sign of negative sentiment.
Second is the $31.38 level where HAL closed immediately before breaking to the downside. Prices tested and failed at that location last week. Has new resistance been confirmed?
Third, the stock has slipped back below its 21-day exponential and 50-day simple moving averages. That may indicate weakness in the short and intermediate terms.
Finally, stochastics are sliding from an overbought condition.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. If you're born to trade, we could be for you. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
Natgas - Pending RSI Failure SwingThis is an idea of what to look out for if natgas continues to rally into overbought RSI territory and tops out as it did in May and June of 2024 (current year). Look out for overbought RSI divergence followed by a failure swing as shown and outlined in further detail in the idea linked below, probably confirmed by MACD divergence as well. Look out for an approximately 40-day duration of top formation once RSI enters overbought territory, plus or minus 20 days. Be prepared for a max draw down of 2.14% if you short the close of the day the failure swing is confirmed. The previous gain was 29.16%. Due to the high draw down %, it may make sense to short a QG micro which is 1/4 of an NG contract, possibly adding more on the way down at your discretion. The trade entry may happen later this year, approximately mid November.
Also something to watch out for is a much sharper rise with a much shorter RSI failure swing pattern as was formed at the start of the year 2024 (current year), also shown on the chart. The drawdown was much smaller and the target much greater (50% gain) but the short duration made the failure swing more suspect. It’s better if more than just 5 days form the top and a deeper valley is formed.
This is all very hypothetical, but these are the types of swing trades I watch for and it’s good for me, if no one else, to note these potential trades as they approach. Please feel free to ask questions.
Previous failure swing idea with additional explanation:
Apparent Downtrend in 10-Year Treasury YieldsTreasury yields have been sliding since April. Now, after a two-month pause, some traders may see further downside.
The first pattern on today’s chart is the series of lower highs since mid-July. TNX could be stalling at the same resistance, potentially confirming the downtrend.
Second is the December low around 3.785. Yields tried to hold that level in August but remained mostly below it in September. Is the level breaking?
Third, stochastics have reached an overbought condition. (Notice the white arrows on the lower study.)
Next, TNX is still about 50 basis points above last year’s low. That may cause some chart watchers to see space for a move lower.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. If you're born to trade, we could be for you. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
LOOKS token to print a 10,000% move?On the above 4-day chart price action has corrected 99% since January 2022. A number of reasons now exist to be long, including.
1) Price action and RSI resistance breakouts.
2) Multiple oscillators print positive divergence with price action. The higher the time frame you go the stronger the divergence.
3) While the market has been in full panic mode volume has only increased on this token. I don’t know why. Every sell off is met with a large volume increase.
4) Not listed on major exchanges. Get in before crowd.
5) The falling wedge forecast. The forecast is measured from the highest to the lowest touch points. (Red circles). This is how a target from a wedge is forecast.
Is it possible price action continues correcting? Sure.
Is it probable? No.
Ww
Type: trade
Risk: <=6%
Timeframe for long: Yesterday
Return: 100x
UnitedHealth Broke Out. Now It’s Pulled BackUnitedHealth broke out to new highs in July. Now after a pullback, some traders may see potential for a continuation to the upside.
The first pattern on today’s chart is the pair of bullish moves after the last two earnings reports. That kind of price action may reflect positive sentiment toward the health insurer’s fundamentals.
Next, the second jump propelled UNH above its previous high from October 2022. The stock has remained there since, potentially confirming the breakout.
Third, prices are trying to stabilize near the rising 50-day simple moving average (SMA). The 50-day SMA also had a “golden cross” above the 200-day SMA about two months ago. Those signals may be consistent with intermediate and longer-term uptrends.
Finally, stochastics are trying to rebound from an oversold condition.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
Chevron May Be OverboughtEnergy stocks bounced last week. However they remain the worst-performing sector this year and now some traders may see downside risk in Chevron.
The first pattern on today’s chart is the March low of $147.67. CVX knifed through this potential support level in early August and peaked near it a few weeks later. Now it’s stalling around the same level. Has old support become new resistance?
Second, a peak here would represent a lower high versus late August. The stock also made a lower low in mid-September versus mid-August. Lower highs and lower lows are potentially consistent with downtrends.
Third, the 50-day simple moving average (SMA) had a “death cross” below the 200-day SMA last month.
Finally, stochastics have reached an overbought condition.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
Marvell Pulls Back After Earnings RallyMarvell Technology surged on strong results last month. Now some traders may think the chip stock will continue higher.
The first pattern on today’s chart is the bullish gap on August 30 after the quarterly numbers. That may reflect positive sentiment in the name -- especially given its potential datacenter AI exposure.
Second is the series of lower highs since March. MRVL has remained near that falling trendline recently, which could suggest resistance is breaking.
Third, listless sideways movement this year has produced close proximity between its 50-, 100-day and 200-day simple moving average (SMAs). Does that create potential for prices to expand?
Finally, stochastics could be turning up from an oversold condition.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
(SOL) solana "resilient"Solana appears to be holding a strong flat pattern throughout the duration of the trending cycle of moving averages with the holding pattern reaching a resolute moment where the unknown may prove to be postively received, or negative if the MACD lines fall beneath the 0 neutral measurement. Solana is not immune to losing in price; it is capable of gaining too though.
QQQ sold off today and plummeted in after hoursQQQ started to finally show selling with momentum for first day in nearly a week of slowly selling.
It looks as though distribution phase has passed and selling with momentum has begun.
After hours etf continues to slide dramatically
Bulls have lost with bears firmly in control at the moment
The after hours sell we are experiencing now could possibly cause it to gap down on open then get filled in the morning before selling continues.
Amazon.com May Be OverboughtAmazon.com has rebounded from a drop, but some traders may think the e-commerce giant will give back some of its recent gains.
The first pattern on today’s chart is the $181.87 level. It was the low immediately before earnings came out and represented the approximate high last week. Has old support become new resistance?
Second, Wall Street wasn’t thrilled with the quarterly numbers. (Revenue and guidance were light.) AMZN had its biggest drop since April 2022 as a result. That could make some buyers wait for retests.
Next, stochastics are dipping from an overbought condition.
Fourth, this month’s low and last week’s high could be mapping out the early stages of a falling channel.
Finally, the 8-day exponential moving average (EMA) could be getting stuck below the 21-day EMA. That’s a potentially bearish short-term trend signal.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
Amgen: False Breakdown and Uptrend?Amgen has been fighting higher this year, and some traders may think a longer-term uptrend is in place.
The first pattern on today’s chart is the move under $310 after mixed quarterly results. The drugmaker quickly recovered as Wall Street focused on its pipeline. The resulting drop and rebound could be viewed as a “false breakdown,” which is potentially bullish.
Next is the price zone between the closing highs of February and June. AMGN has stayed above that area for almost two weeks. Has old resistance become new support?
It’s also holding the rising 50-day simple moving average. That could reflect a bullish intermediate-term trend.
Finally, Wilder’s Relative Strength Index (RSI) just crossed above its 14-day average. Similar crossovers have preceded moves in both directions. (See arrows.)
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
Is Pfizer Trying to Turn?Pfizer has struggled for years, but some traders may see signs of a turn.
The first pattern on today’s chart is the pair of positive moves after stronger-than-expected earnings reports. Those may reflect improving fundamentals for the drugmaker.
Second, the 50-day simple moving average (SMA) had a “golden cross” above the 200-day SMA last month. Has the longer-term trend improved?
Next, PFE made a lower low on Tuesday versus Monday and a higher high. That “outside day” may be viewed as a potentially bullish reversal pattern.
Finally, stochastics turned up after hitting an oversold condition.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
Decoding Money Flow within Markets to Anticipate Price DirectionI. Introduction
In the intricate world of financial markets, understanding the flow of capital between different assets is paramount for traders and investors aiming to anticipate price movements. Money doesn't move haphazardly; it often follows patterns and trends influenced by a myriad of factors, including economic indicators, geopolitical events, and inter-market relationships.
This article delves into the concept of money flow between markets, specifically analyzing how volume movements in one market can influence price directions in another. Our focus centers on two pivotal markets: the 10-Year T-Note Futures (ZN1!) and the Light Crude Oil Futures (CL1!). Additionally, we'll touch upon other significant markets such as ES1! (E-mini S&P 500 Futures), GC1! (Gold Futures), 6E1! (Euro FX Futures), BTC1! (Bitcoin Futures), and ZC1! (Corn Futures) to provide a comprehensive view.
By employing the Granger Causality test—a statistical method used to determine if one time series can predict another—we aim to unravel the nuanced relationships between these markets. Through this exploration, we aspire to equip readers with insights and methodologies that can enhance their trading strategies, particularly in anticipating price directions based on volume dynamics.
II. Understanding Granger Causality
Granger Causality is a powerful statistical tool used to determine whether one time series can predict another. While it doesn't establish a direct cause-and-effect relationship in the strictest sense, it helps identify if past values of one variable contain information that can predict future values of another. In the context of financial markets, this can be invaluable for traders seeking to understand how movements in one market might influence another.
Pros and Cons:
Predictive Power: It provides a systematic way to determine if one market’s past behavior can forecast another’s, helping traders anticipate potential market movements.
Quantitative Analysis: Offers a statistical basis for analyzing market relationships, reducing reliance on subjective judgment.
Lag Dependency: The test is dependent on the chosen lag length, which may not capture all relevant dynamics between the series.
Not True Causality: Granger Causality only suggests a predictive relationship, not a true cause-and-effect mechanism.
III. Understanding Money Flow via Granger Causality
The data used for this analysis consists of daily volume figures for each of the seven markets described above, spanning from January 1, 2018, to the present. While the below heatmap presents results for different lags, we will focus on a lag of 2 days as we aim to capture the short-term predictive relationships that exist between these markets.
Key Findings
The results of the Granger Causality test are presented in the form of a heatmap. This visual representation provides a clear, at-a-glance understanding of which markets have predictive power over others.
Each cell in the matrix represents the p-value of the Granger Causality test between a "Cause" market (row) and an "Effect" market (column). Lower p-values (darker cell) indicate a stronger statistical relationship, suggesting that the volume in the "Cause" market can predict movements in the "Effect" market.
Key Observations related to ZN1! (10-Year T-Note Futures):
The heatmap shows significant Granger-causal relationships between ZN1! volume and the volumes of several other markets, particularly CL1! (Light Crude Oil Futures), where the p-value is 0, indicating a very strong predictive relationship.
This suggests that an increase in volume in ZN1! can reliably predict subsequent volume changes in CL1!, which aligns with our goal of identifying capital flow from ZN1! to CL1! In this case.
IV. Trading Methodology
With the insights gained from the Granger Causality test, we can develop a trading methodology to anticipate price movements in CL1! based on volume patterns observed in ZN1!.
Further Volume Analysis with CCI and VWAP
1. Commodity Channel Index (CCI): CCI is a versatile technical indicator that when applied to volume, measures the volume deviation from its average over a specific period. In this methodology, we use the CCI to identify when ZN1! is experiencing excess volume.
Identifying Excess Volume:
The CCI value for ZN1! above +100 suggests there is an excess of buying volume.
Conversely, when CL1!’s CCI is below +100 while ZN1! is above +100, it implies that the volume from ZN1! has not yet transferred to CL1!, potentially signaling an upcoming volume influx into CL1!.
2. Volume Weighted Average Price (VWAP): The VWAP represents the average price a security has traded at throughout the day, based on both volume and price.
Predicting Price Direction:
If Today’s VWAP is Above Yesterday’s VWAP: This scenario indicates that the market's average trading price is increasing, suggesting bullish sentiment. In this case, if ZN1! shows excess volume (CCI above +100), we would expect CL1! to make a higher high tomorrow.
If Today’s VWAP is Below Yesterday’s VWAP: This scenario suggests bearish sentiment, with the average trading price declining.
Here, if ZN1! shows excess volume, we would expect CL1! to make a lower low tomorrow.
Application of the Methodology:
Step 1: Identify Excess Volume in ZN1!: Using the CCI, determine if ZN1! is above +100.
Step 2: Assess CL1! Volume: Check if CL1! is below +100 on the CCI.
Step 3: Use VWAP to Confirm Direction: Compare today’s VWAP to yesterday’s. If it’s higher, prepare for a higher high in CL1!; if it’s lower, prepare for a lower low.
This methodology combines statistical insights from the Granger Causality test with technical indicators to create a structured approach to trading.
V. Case Studies: Identifying Excess Volume and Anticipating Price Direction
Case Study 1: May 23, 2024
Scenario:
ZN1! exhibited a CCI value of +265.11
CL1!: CCI was at +12.84.
VWAP: Below the prior day’s VWAP.
Outcome:
A lower low was made.
Case Study 2: June 28, 2024
Charts for this case study are at the top of the article.
Scenario:
ZN1! exhibited a CCI value of +175.12
CL1!: CCI was at -90.23.
VWAP: Above the prior day’s VWAP.
Outcome:
A higher high was made.
Case Study 3: July 11, 2024
Scenario:
ZN1! exhibited a CCI value of +133.39
CL1!: CCI was at +0.23.
VWAP: Above the prior day’s VWAP.
Outcome:
A higher high was made.
These case studies underscore the practical application of the trading methodology in real market scenarios.
VI. Conclusion
The exploration of money flow between markets provides valuable insights into how capital shifts can influence price movements across different asset classes.
The trading methodology developed around this relationship, utilizing the Commodity Channel Index (CCI) to measure excess volume and the Volume Weighted Average Price (VWAP) to confirm price direction, offers a systematic approach to capitalizing on these inter-market dynamics. Through the case studies, we demonstrated the practical application of this methodology, showing how traders can anticipate higher highs or lower lows in CL1! based on volume conditions observed in ZN1!.
Key Takeaways:
Granger Causality: This test is an effective tool for uncovering predictive relationships between markets, allowing traders to identify where capital might flow next.
CCI and VWAP: These indicators, when used together, provide a robust framework for interpreting volume data and predicting subsequent price movements.
Limitations and Considerations:
While Granger Causality can reveal important inter-market relationships, it is not without its limitations. The test's accuracy depends on the chosen lag lengths and the stationarity of the data. Additionally, the CCI and VWAP indicators, while powerful, are not infallible and should be used in conjunction with other analysis tools.
Traders should remain mindful of the broader market context, including economic events and geopolitical factors, which can influence market behavior in ways that statistical models may not fully capture. Additionally, effective risk management practices are crucial, as they help mitigate potential losses that may arise from unexpected market movements or the limitations of any predictive models.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Microsoft: More Oversold than During Covid?Microsoft has declined along with other AI names in the last month. How big was the pullback? Some traders may be surprised to know its intensity.
The first noteworthy signal on today’s chart is Wilder’s Relative Strength Index (RSI). The oscillator hit 24.69 on Monday. That was the lowest reading since August 2015. In other words, MSFT this week was more oversold than March 2020 -- at the depths of the coronavirus selloff.
Next, the software giant tested and held its April 25 low around $388. That may suggest support remains in effect.
Third, MSFT is trying to hold its 200-day simple moving average for the first time since March 2023. That could indicate the presence of a longer-term uptrend.
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XAUUSD Gold to 4KTimeline is 6 months - 2 years
The crash has already started. At some point everyone will start to sell thier treasury bonds, yields will go up proportionally to inflation until the dollar loses it's status as the global currency and dramatic measures are used to stop inflation resulting in stagflation and yield recovery. Else hyper inflation and the dollar is replaced entirely.
I see the momentum indicators shifting in various markets. Below is a brief summary of each, relevant indicators/markets. see charts.
US1YRBILLS
WTI CRUDE
SILVERUSD
BONKCOIN
TSLA
BTCUSD Weekly Inflection pointWhat I have here are a bunch of momentum channels piled on each other on the keltner channel oscillator. (weekly light blue, daily green, 3hr light purple) I didn't bother hiding lines from the diff time frames, which helps put into perspective each zone in accordance to the keltner channel TF price is in. IE on the weekly we're above the KC Mid Line. Same with each TF all the way to the 1 Hour where we're consolidating. A shift on the 1 hour makes for a potential shift on the 3 hour, and judging by our position in the relative channels on the various time frames I expect consolidation on the 3 hour with the potential to consolidate on the daily and weekly.
This is what I call an inflection point.
Weekly:
Daily:
3 Hour:
Here is a previous chart with a daily inflection point:
Which direction it goes on the inflection point is a guess, unless watching every timeframe to see the inflection points on the lower TF's develope in real time. Momentum shifts mark a point where momentum consolidates; from which it could break out or break down.
When I start to see shifts on the smaller time frames, they tend to consolidate, and push thier final peaks of emotion (price peaks) until the larger time frames develope a shift and consolidates as well.
My first chart uses a weekly inflection point/momentum shift and the keltner channel to determine that price would drop to 20k from 60k...
Maximum Hypothesis TestI still believe Tesla is a great company with a lot of future ahead. However, seeing how aggressive price action has been lately, it would be wise to consider taking some profits. This would allow for the trade to keep going, and the previous winning trades will have room to grow into strong investments. It's unlikely that price will continue to uptrend in this manner, but it's great to finally see some life signs out of this company. I'm sure their future will be bright, but as of now we must stay realistic and expect price to uptrend in a normal manner and not in a bubble like form.
I believe it would be best to lay back and wait for more buying opportunities and look to dollar cost average the dip. If price does keep increasing then the unliquidated stocks should keep capturing returns and if it drops then dollar cost averaging would create a great scenario for catching a possible long term uptrend.
Will the dollar recover its recent losses?Looking lately at the Peso/Dollar relationship, it has seemed as if the high prices for the dollar are here to stay and the super peso has come to past. It was surprising to see that the upward trend that price was on broke. However, price as of lately has been struggling to push downwards. This is because of the 25MA is acting as support on the daily chart. Additionally, seeing the 25MA acting as resistance in the monthly chart put this trade in an uncomfortable situation. Mainly because even though there is an uptrend in important time frames, this trend is being tested on a way larger time frame.
On the other hand, the movement that brought price to these levels was very solid and has a lot of support under it. Considering 18.00 pesos per dollar to be quite a good deal, I would believe that many more people will see it this way and would rather be investing in dollars. In conjunction with the main Mexican index BMV:ME which has failed to recover from the down movement caused by the victory of the newly elected Mexican president. It's officially been a month since the index hasn't been able to break above the 25MA. If price fails to create an uptrend soon, this could lead to another 8% fall in the Index. This would create great buying opportunities in the Mexican market but could also cause investors to panic.
Waiting to see if Mexico is in the verge of collapse makes me think that dominoes may be starting to fall. Meaning there could be something much more serious lurking under the water. This in combination with the high risk that the USA will enter a crisis makes me believe that if price of Mexican stocks doesn't begin to turn around, we could be on the verge of a new recession. The USA still seems to have some fuel left in the tank, which could help the Mexican index recover, as also the recent rainfall has been a blessing for many communities that were affected by the severe droughts all over the country.
Meaning there is a possibility that Mexico will recover, but if it doesn't then this should be a red sign for the USA as your market is overextending. Meaning, if USA enters intro euphoria and Mexico into crisis, then we would have a severe economic divergence in two countries which economies are interconnected. Expect the best, prepare for the worst.
Does the USA sill have something left in the tank?With the recent news of the FED being close to a new rate cut, it's important to start considering the possibility of the market going even higher. However, it's hard for price to keep pushing up when it's already overextended. Not saying this doesn't happen because it does. Price does tend to break the rules of statistics, given the irrationality of people. However now that most stocks are currently in an uptrend, it's hard to believe this performance will continue for much. It's likely that several stocks will begin to start forming downtrends, pushing the percentage of stocks in an uptrend down. When looking at the chats, the cyclicality of growth spurts is quite notorious. However, not every time that a down turn in the index is followed, the vast majority of stocks being in an uptrend.
Although this does tend to happen, as I've circled here in many examples. However, other examples don't show this same pattern and instead see price move even higher. This is because using the percentage of stocks in an uptrend as an indicator is not painting a full picture. Even if many stocks being going into downtrends, the force and extent of which these trends form is what actually drives price action in the index. So we should expect several stocks to begin underperforming in the next couple of days. But if the stocks that have just recently entered an uptrend keep providing strong results, it's still possible for the index to keep on going higher. The direction of the index will depend on the strength of the new form trends and the soon-to-be formed downtrends.