NASDAQ FUTURES
RUSSELL
ES FUTURES
ES FUTURES – PRESSURE
RUSSELL WAVES
You can see here that price is coming back to backtest the breakdown to the left and it has broken above the prior point of control wave. (will it hold as support?)
NASDAQ WAVES
Waves 1 and 2 broke down targeting Wave 3.
ES WAVES – ALL BULLISH FROM THE 4 HR VIEW.
ES – 1 HOUR VIEW OF PRESSURE.
ES FUTURES – HIGH-PRESSURE SELLING FOR BOTH PRESSURE WAVES – REGULAR (Institutional Sellers) AND HIGH IMPACT (Retail Selling)
Interim – Active Pair Extremes
3 MINUTES TO NEWS
USD Initial Jobless Claims 261K 235K 233K Legend
2 min USD Initial Jobless Claims 235K 232K
Getting the hang of any trading system does take some time and effort, especially when it comes to understanding price action. But don’t worry, the system we’re using helps ease the process by color-coding probabilities and market pressure. For instance, a yellow swingarm signifies that sellers are in the driver’s seat. And when all indicators point to a bearish market, it’s clear that sellers have the upper hand.
However, there can be moments when the price is caught in the middle range squeeze of higher timeframes like it is right now in the 1-hour and 2-hour zones. At such times, the price tends to be stuck, waiting for the pressure to build and break out to reach the desired zones. Even if the overall trend leans bearish, this squeeze can keep the price within a certain range. Just remember, patience is key here for pressure to build and hit those perfect entry points.
By the way, this week I hosted two Zoom sessions totaling three hours, and guess what? Only two folks turned up. Well, what can you say, right? Keep going and happy trading!
Wondering what an ideal entry might look like? High-probability entries with a great reward-to-risk ratio often come from higher timeframe zones. Consider the 15-minute timeframe as our base level for market pressure. Now, let’s say we have a bearish two-hour zone. Ideally, we would want to see the 15-minute trigger also show bearish trends during the US Session. Combining this with the reaction of a higher timeframe and swingarm pressure presents a powerful profit opportunity.
These setups, however, require patience. They can take days to form and play out. For instance, check out the ES 2-hour chart from May 24th at 2 PM. There, you’ll spot a perfect high-pressure swingarm (marked in green), aligning with long-term wave support. An entry at 4120 could have ascended to a peak of 4305 by May 5th. Opportunities like these come quite often. Day trading also offers good opportunities from time to time, but these require more experience and a keen awareness of potential risks. Curious about what typically occurs when swingarms break?
Usually, they’ll be backtested if the initial break lacked sufficient momentum or trending energy to continue forcefully in the direction of the break. For example, if both the 30-minute and 1-hour zones break down, targeting the two-hour zones, could potentially lead to a backtest of the 30-minute and eventually the 1-hour zones. It’s these higher zones that tend to offer the best opportunities. Trading in the squeeze or middle range can be riskier and more demanding. The bottom line? I aim to have extreme zones to trade and keep the probability of pressure on my side. It’s all part of the game!
Right now, we’re looking at bearish probabilities and a high-pressure sell swingarm that’s already on a downward trajectory, targeting those 2-hour extremes. If the 15-minute level holds, then we’re on track to hit those 2-hour extreme zones. But here’s the thing, jumping into a trade after it’s started trending can up the risk, unless it’s at just the right time and during a significant pressure release, like the market opening hours.
Thinking of shorting the 15-minute extreme zone? That could totally be an option! Just keep in mind that it’s prone to breaking as the price tries to backtest. So if you go short on the 15-minute zone and the swingarm breaks, it’s time to step back. Then, you can patiently wait for the next extreme zone to pop up on your radar. The key here is to manage your trades effectively and aim for minimal stop-outs. Just to give you an example, I was recently stopped out of 1 ES (the smallest possible quantity) at a loss of -2.5 points. (by the way, I proactively closed the trade as the swingarm confirms broken up.)
By the way, I just activated the extreme zones for you, in case you’re still finding it hard to grasp that these zones are indeed the optimal entry points for a swingarm trade. Let’s keep learning and trading smart!
There is no need to allow the full size of the stop to trigger if the setup failed.
Notice that the setup did provide a few opportunities to profit from if day trading.
Buyers confirm taking control –
So, do not fight pressure.
Newer traders are often drawn by the allure of fast cash and immediate rewards. The fear and emotions that come with the territory might lead them to trade too frequently or fuss over stopping management more than necessary. Plus, they might not always have the patience or understanding to identify the best entry zones. That’s where the swingarm steps in and makes things a whole lot easier by pointing out the extreme zones for you.
Why not start by picking a timeframe, like the 15-minute and higher zones? And if the swingarm is showing pressure going your way, that’s even better! You can often trade within the zone multiple times, reaping profits before it eventually breaks down. And remember, learning is a part of the process, so don’t fret about the bumps along the way!
I did not pay attention to the triggers on the 1 minute that I am showing on your charts.
Notice how the probabilities alert as well after the initial 1-minute signals.
As traders, we absolutely can keep an eye on the 1-minute chart, provided it’s showing us the key data from those higher timeframe zones that are currently in play. This way, we’re keeping track of the quick, minute-by-minute changes while also staying in tune with the broader market trends.
SUMMARY OF PREVIOUS NOTES:
Here’s a summary of the key points we’ve covered about the Swingarm Pressure System, and learning about price action, trading opportunities, associated risks, and the emotional challenges that often come with trading.
Understanding Price Action:
In trading, it’s crucial to grasp the concept of price action, which refers to the movement of a security’s price over time. The Swingarm Pressure System simplifies this process by color-coding market pressure and probabilities. For instance, a yellow swingarm indicates sellers are in control.
Recognizing Trading Opportunities:
High-probability entries with great reward-to-risk ratios often come from higher timeframe zones. The Swingarm Pressure System helps identify these zones. However, these opportunities can take days to form and to play out, emphasizing the importance of patience in trading.
Managing Risks:
Trading always involves risk. One way to manage this is by adhering to stop-loss rules – essentially a predefined point at which you’ll close a trade if it doesn’t go as expected. Also, it’s crucial to understand that jumping into a trade after it’s started trending can increase the risk unless it’s at an opportune moment. Managing size is an easy way to manage risk.
Emotional Challenges:
Trading can be an emotional rollercoaster. New traders are often drawn to the prospect of fast cash and immediate rewards, which can lead to the overtrading or excessive focus on stop management. It’s important to be aware of these emotions and keep them in check to make informed decisions.
Patience is Key:
In the Swingarm Pressure System, patience plays a crucial role. Waiting for the perfect entry point can make the difference between a successful trade and a losing one. Remember, rushing into a trade can increase your risk. Regardless, if a trade is taken, the stop-loss rules should keep you safe by closing out poor entries.
Learning about Backtesting:
Understanding what happens when swingarms break is part of the learning process. They usually get backtested if the initial break lacked the trending energy or momentum to continue forcefully in the direction of the break.
Awareness of Market Conditions:
As traders, you need to consider the bigger picture while observing minute-by-minute changes. For example, even if the 15-minute chart holds, it’s essential to consider higher timeframe zones, such as the 2-hour zones, as they may impact your trading strategy.
Remember, learning to trade involves a combination of technical knowledge, emotional control, and practical experience. It's not about quick money, but about understanding market behavior, managing risks, and making informed decisions.
Being aware of all 3 indices can provide you insight into potential outcomes. What can you tell me about NQ?
Based on what you’re observing, the 4-hour (4H), 2-hour (2H), and 1-hour (1H) trendlines are all headed upward. This points towards a bullish market, hinting at a strong buying momentum on these broader timeframes. The price is currently targeting the weekly chart’s zones following a bounce from the 2-month extreme swingarm zone dated back to October 13th last year. This reaching of a weekly swingarm pivot has caused the lower timeframes to cycle and test their supports.
When it comes to your observation about the 15-minute chart cycling, this could suggest it’s fluctuating between bullish and bearish trends within these shorter intervals. Shorter timeframes tend to have more volatility and quickly react to short-term market changes. This behavior is usually seen when the price hits an extreme resistance zone and needs time to consolidate and gather more energy to continue the trend or turn over to discover more buyers at lower swingarm timeframe supports.
Longer timeframe charts trending higher targeting bearish territory above. Still, remember that this doesn’t mean we won’t see price dips in the short term. The trick here is to synchronize your trading strategies with your selected timeframe. If your focus is on swing trading (which typically involves multi-hour to multi-day trades), you’ll want to pay close attention to the 1H, 2H, and 4H chart trends. But, if day trading sparks your interest, the 15-minute chart will be your go-to guide. Keep in mind that successful trading involves comprehending the wider market trend (which in your case is ‘North’ or bullish on 4H, 2H, and 1H charts) and the short-term price fluctuations (as seen in the 15-minute chart).
The secret sauce here is to analyze, and identify the extreme zones that pique your interest, have a solid understanding of broader market supports or resistances, and trade in the direction of pressure. Unfortunately, when the price is squeezed, determining the potential break’s direction can be challenging. Sometimes the system can pinpoint the setup, and at other times, the conflict might be too great to make a clear call. Remember, in those uncertain times, it’s perfectly fine not to trade – being in cash is also a part of the trading journey. Keep on exploring those charts and don’t shy away from asking more questions. We’re all in this together, learning and growing.
The Dow Jones Industrial Average (DJIA) is composed of 30 large, publicly-owned companies based in the United States. The NASDAQ 100 is an index that includes 100 of the largest non-financial companies listed on the NASDAQ stock exchange. The Russell 2000 Index is a small-cap stock market index that includes the bottom 2,000 stocks from the Russell 3000 Index, which itself is an index of the 3,000 largest U.S. stocks. The S&P 500 (often referred to as ES in futures trading) includes 500 of the largest companies listed on the New York Stock Exchange or NASDAQ.
In terms of providing the best overall market view, each of these indices measures different segments of the U.S. stock market, and they each have their strengths and limitations. The Dow Jones is limited in its scope, as it only includes 30 companies, but it has a long history and includes many foundational companies in the U.S. economy.
The NASDAQ 100 focuses on non-financial companies, particularly in the tech sector, so it provides a good gauge of how that specific sector is performing. The Russell 2000 is an excellent indicator of how small-cap stocks are doing, which can sometimes move differently than the large-cap stocks that make up the other indices. The S&P 500 is often seen as the best single gauge of the U.S. equities market, given its breadth and the diversity of sectors it covers.
This index includes companies of all sizes and spans all industries, making it a broad indicator of the overall U.S. stock market’s performance. So, if you want a diverse and comprehensive view of the overall market, using a mix of these indices would be beneficial.
The S&P 500 for a broad, diverse perspective; the NASDAQ 100 for a focus on tech and non-financial sectors; and the Russell 2000 to keep a finger on the pulse of small-cap companies. The Dow Jones can also provide a historical perspective due to its longevity and focus on established blue-chip companies.
ES500:
This looks like our first go at the 1 hr zone! Chances are we’ll see it tested a few times on the 1-minute chart. Currently, the regression channel on this chart shows a strong bullish trend. However, if the price starts to show signs of tipping over (which is likely), the regression channel will gradually flatten over time. If you haven’t taken a short position yet, backtesting the 3 standard deviation zone could present a good opportunity. Keep a close eye on it!
Notice we had a couple of hours of notice before the entry opportunity.
Be aware that we have up-trending support. So taking profits is needed as the range is tight.
There is a possibility for the price to eventually reach the 1hr hour partner. Which is the 1hr partner or partners?
The SwingArm Pressure System was designed as an innovative tool for technical analysis, specifically to identify areas where significant buying or selling activity may be expected when trading indices.
Here’s a breakdown of its key components:
SwingArm and Extreme Zones:
This was the initial tool established to track ‘value area zones’. The SwingArm maps these zones which serve as potential sites of considerable buying or selling activity.
Wave Analysis Tool – Moving Averages:
This tool was subsequently developed to offer additional insight into support and resistance over time. This is critical in technical analysis as these areas can indicate potential price reversals or continuations. As probably the most utilized tool in technical analysis globally, moving averages help traders to identify trends by smoothing out price data, reducing ‘noise’, and highlighting the underlying direction of price movement.
High-Pressure SwingArm:
To address the challenge of determining who has the upper hand – buyers or sellers – and which zones are more likely to withstand and react to price action, the high-pressure SwingArm was introduced. This aspect of the system measures the pressure of buying and selling, thereby adding an extra layer of understanding regarding the potential energy contained within a specific zone.
Trendline Pressure Tool:
To offer an alternative perspective on directional pressure, this tool was created. It provides a different way to gauge and visualize the trend and its potential shifts.
Extreme Zone Alerts:
Lastly, the system employs standard deviations to generate alerts for extreme zones. These alerts assist traders in identifying price extremes, which are key areas where significant buying or selling pressure may occur. Each component of the SwingArm Pressure System plays a crucial role in helping traders understand price action better, ultimately enhancing their trading strategy and decision-making process.
NASDAQ DAILY
WEEKLY AND DAILY SWINGARMS – NASDAQ
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