ReadMe.txt

News & Ideas

Coming Soon

The S&P 500 has been in a Bearish Market Structure recently and with lower-lows being created, we had a bearish bias with a hypothesis that price would make another new low.

With each lower-low (specifically on the 1-hour timeframe), protected swing highs weren’t being violated — thus making us to believe the overnight rally was on low volume. And we confirmed that theory with the Volume Profile. Making $3953 our Price Target.

We marked our 1-hour Supply Zone at $4043.50 to go short / buy Puts, with a Break of Structure and Cut Loss above $4065.50.

There was also a 1-hour and 30-minute Demand Zone below between $3978.75-$3968.75. This would also be an ideal to take Partial Profits.

Once price reached the 1-hour Supply Zone, it took a few hours before our hypothesis was validated and dropped. Price reached the Supply Zone around 2 AM (PST) and the CPI (Consumer Price Index) report was released at 5:30 AM (PST), which is when the ball dropped, hitting our 1-hour Price Target at $3947.25 (unfortunately, this happened before regular market hours, so we shorted with Futures and not with options).

The trade worked out beautifully. We identified which direction the market was going with Market Structure, where potential price targets were with Liquidity, validated which side (buyers or sellers) was holding inventory, picked our ideal entry area with Supply & Demand Zones and properly took profits with Risk Management.

On this page