The first 30 min's is Key

In the first 30 minutes the market is going through a price correcting and balance phase. This comes from the rollover of activity during the night before ....after the US market closes, Asia , Australia , and Europe are Trading throughout the night. This momentum is absorbed at the US market Open....Hence the gap will occur....there are several possibilities once the gap presents it self...
1. Gap opens within previous days trading range.
2. Gap opens above previous days range.
3. Gap opens below previous days range.

First thing to watch for is the TEST... expect that Price will always test the Support/resistance closest to where the gap opened........will it pass through or be rejected?

Here is where the NYSE Tick comes into play. The tick records the cumulative buying and selling each minute ...if above zero , there are more buyers than sellers .....if below zero there are more sellers than buyers.........

with the Tick there are significant ranges

- 500 to + 500 indicates a neutral bias
-750 to + 750 indicates a bearish or bullish bias and leans to a range bound price action.
greater than -800 or + 800 indicates a trending bias......up or down.


Volume is the next thing to watch...

now volume is a real time relative measure of the number of shares traded....

the key observation to make is how volume moves in relation to price movement.
(try to visualize driving a car and volume is the gas peddle)

1. volume moving up, more gas / price moving up the hill faster = buyers are in charge

2. volume moving up, more gas / price moving down the hill faster = sellers are in charge

3. volume moving down ,less gas / price moving up the hill slower = buyers are drying up

4. volume moving down , less gas / price moving down the hill slower = sellers are drying up


Let's pull the two above charts together.

min 1.... gap down below previous day lower range with big volume/ - 300 tick.

min 2 thru 7..... price is rejected from trend line and lower support zone...price is going up and relative volume is flat to rising ,tick is flat remaining around -300 area....

min 8 -10 .....price drops slightly with a volume spike , tick remains in -500 range (no big sellers)

min 9 - 18.... price rises with one test of lower support zone (long wick suggests strong buyers) with rising volume, tick moves above zero and up to +800 ( big buyers are moving with +800 blocks of shares per minute) also we have a rising 20 ma cross of 50ma ,, and 50 ma is rising above zero line....Potential to trend up

min 19-30.... price hugged up against pivot line (center line of daily trading range) with increasing to flat volume , tick continues to range above zero up to +800 .....Bullish

min 31...... gives us a buy signal with a break away and close above pivot and rise in volume along with a +800 tick.....

right here is the buy....with a stop just 3 points below the candle at 20 min's

Chart 6 Support and Resistance

This is a chart pattern called an ascending triangle.....a consolidation period, usually seen in the 4th wave of the up cycle...see video on triangles....this is a time period accumulation phase where price retraces sideways rather then down.....as price moves up to resistance buyers are reluctant to pay a higher price as a result the price is rejected and falls , not to a lower low but a higher low than the previous low. This means the sellers are drying up on each consecutive Dip. Eventually the sell orders completely stop and the buyers take control (usually on the 3rd attempt) pushing price thru the resistanceline and a surge to the up side begines....

Buy Sell levels Chart 5

Most likely this a continuation Triangle. Notice the higher lows on each Correction phase (they're running out of sellers) and the unwillingness of the buyers to move the price higher ...watch the 5 phases of a chart and the triangle - correction and Impulse videos and try to develop your own conclusion.......Neboxian

Buy Sell levels Chart 4

Price will almost always bounce (reverse) if it dosen't break out above or below a previous base area The technical term for these key areas is
1.Support (Low level of base)
2.Resistance (high level of base area)

5 Ema / 10 Sma Moving Average Chart D

The 5 ema (exponential moving average) and the 10 sma (simple moving average) are combined to complete the (200ma)........ (55ma / 21 ma) ................(10ma / 5 ma) .......moving average price alignment platform........the final 5ma/10 ma combo will show the momentum of the the price in relation to the 21/55ma.......this is all used together like one would sight in a rifle..once the 5/10 ma crossover and in agreement to the direction of the 21/55 ma crossover .....BANG! .....Pull the trigger..... and do what I do next......SO - HAW! (sit on hands and WAIT!)....Neboxian

21 Moving average chart C

When combined, the 21ma and the 55 ma crossover points are powerful tools to identify the short term trend reversals . In addition, shows the speed of the trend and price as it moves in relation to the equilibrium 200 ma....these Crossover points are excellent entry and exit signals. and almost perfect when aligned with the 5ma and 10 ma combo...

55 Moving average chart B

55 moving average will show the crossover and the relative seed of price as it moves away or back to the 200ma

Buy Sell Zone Chart 3

After a Long period of buying or selling , price will make a Pivot reversal because all the buy orders available are filled and all that's left are Sell orders .....price has to go down and will return to a previous low or a base . we call these areas of support . The reason price will return and rally from these areas are many but the main reason is because there are mega buyers or sellers who have huge orders to fill at a certain price and couldn't fill the entire order at the previous buy /sell session.... so....these mega buyers or sellers Wait for the price to return to these Base retracement zones.....and BANG....off we go again. ......Neboxian

Support /Resistance buy and Sell Zones Chart 2

The first thing to remember in all trading.....price will not go up forever and price will not go down forever..... price will return and test previous zones of highs or lows at least once but many times price will return to previous price zones as many as two or three times ..... In this chart the price action at the top is showing signs of exhaustion for this leg of increase .....so we can expect price to move back to the previous price zone at least one time ......so this could be a low risk high profit entry for a limited time short sell....or wait until price retraces back to the target zone for a buy entry........on this chart, since the trend is up...I wouldn't expect price to travel below target zone . But once in the target zone expect a move back up toward the highest price point but not beyond the current High. Will cover more in next post...........Neboxian

Equilibrium 200 Moving Average

The Very first Thing You do is Apply The 200 ma (moving average).....this will give a picture of the price range you're going to be trading ....the 200 ma is the Equilibrium line (price will desire to move back to this point) in addition , 200 ma will also show the prevailing Trend...The Best Low Risk.... high profit Entry point will be when price is at an extreme point with the most potential to RETURN to the 200 ma ........the next thing to do is look at least 4 time frames...
start with the weekly time frame... then drop down to Daily .... then down to 60 min.......then down to the 15 min..The safest low risk trade will be when price in all 4 time frames are pointing in the same direction..... (toward the 200 ma) ......Once all the Home work covered in this Chart School series is complete......you' ll make your entry on the extreme of lowest time frame....Neboxian

Chart School : The Buy /Sell Zone Chart 1

This Series of Charts will teach you how to Identify the High Profit / Low Risk Entry points