 Let's go over to our mammoth to Steve Rhodes as we do each and every Monday at 20 past the hour And don't forget folks every trading day right here. Steve's got a great show One to two Eastern standard time also is a great newsletter mastering probability Now very easy to get this newsletter come over to our website at TFN You hit newsletters you hit mastering probability. You're gonna hit subscribe You can get it for one month for $149. You get it for six months for 695 Which is a savings of $199 or 22% you can get it for a year for $1195 Which is a savings of $593 or 33% they all come folks with a 30-day money back guarantee Steve Rhodes. What's going on? Such a boring day. What are we gonna talk about? It's a beautiful thing brother. No doubt. No doubt Yes, absolutely talk about volatility and that's really the first place Tom that I thought that we would start and what I want to do is It's kind of give folks maybe a view of what to be looking at this evening And really especially if you're an interday trader So I want to be able to do that so to start with here this first a chart or really set of data points that we're looking at The very top portion we've got the ES mini down 96 points right now But the spot ball utility index is what I want to focus on and it's printing right now at 2380 And the important thing is taking a look at the spot ball utility index and then all of its forward futures contracts So here I've got from March through November And what we can see is even the furthest out contract or in this case here October It's printing at 2120 in the futures contract. So we've got this backwardation We have this In what I like to do is I like to take a ratio between the spot ball utility index and take a look at what its One-year index is doing what it's three month what it's six month is on this bottom panel right here, Tom This happens to be the three month version and when it when there's a ratio that gets above one That's in essence dividing the spot ball till next by its three-month counterpart out here or vice versa When it gets above one, it's an indication of a bottom that could be forming at least a viable bottom or a Bounceable bottom so we've got these spot ball until next trading above everything and what I want folks to understand Is that is an unusual format and it provides us with a at least a a nice volatile trading opportunity or at least a very sizable Countertrend rally so that's the first thing the second thing with regard to spot ball of tunics And it's an amazing tool for us in providing us with some insight to put this together with other patterns When I take a look at trading the equity futures contracts So here Tom on this chart We're taking a look at the top panel is yes and P 500 and it has a number of blue and green arrows And the bottom panel takes a look at the one-day rate of change of the spot ball of tunics The difference between the close on Friday and the where it's trading at right now And if you look at the very bottom panel, you'll see it's printing at thirty eight point nine three So we've had a thirty eight percent nearly a thirty nine percent as we speak right now one day rate of change The blue arrows in the S&P 500 are time periods where there's a one-day rate of change greater than ten percent And what we typically see in the overnight action is some type of bounce or bottom in the marketplace So I would prefer right now just to focus on the bounce not necessarily worried about whether it's a bottom or not and on This chart here if I go to other days where we've seen these high and this is where it It's so cool because what happened what I want really what I want folks to do is I want folks selling into the end of The day here because it just isn't supported based upon looking at these technical patterns So for example back here on August the fifth there was a one-day rate of change of thirty nine percent And that's right where that blue arrow is in fact what the market was doing right then We can see that the S&P 500 was forming a bottom it moves sideways, but the following day it didn't move lower It was an inside day out there and we can we can go example after example now doesn't work a hundred percent of the time It does not it's in like that ninety percent eighty to ninety percent Category which is a wonderful thing Now I'll go from the spot volatility index to Oversold type readings out here and one of the oversold readings I like to take a look at is the advanced decline Oscillator that's a difference between the nineteen and the thirty nine day Exponential moving average of the advanced decline line and that is panel two on this chart that we're looking at when that gets down To the minus 150 you see on the bottom of my chart You'll see a yellow horizontal line when it gets down below that 150 That is true oversold territory So when I put the we're an oversold in a New York Stock Exchange to the wider market out there I take a look at the one-day rate of change in spot volatility index and I take a look at the backwardation That we have inside the spot volatility index versus its forward futures contracts All of that sets up for some type of nice overnight rally out here And I say overnight because right now we've already received the bottom signal so unless within the next 40 minutes out here we see another push lower and take out the lows the low is actually already in and this is a 30 minute Time frame chart in time what you and what folks will we'll see out here They'll see these black diagonal lines those black diagonal lines are automatically drawn by my system There's nothing here that I'm drawing and what they're doing is they're identifying. These are the tools involved with Identify what I refer to as the roads momentum indicator top and bottom they work for all time frames all instruments out here In this case here, this is showing price pushing lower with less relative energy It's like playing a game of liars poker But you already know what the numbers are that you've got on your dollar bill or hundred dollar bill would have you versus the other Person in this case here. This is the liars poker This is the this is the this is the like taking a ball in and In being in a pool and pushing it down and trying to stand on eventually it's gonna pop up Well in this case here, we already have the bottom signal now Is it the bottom signal that tells us that we have more than just a little bit of an intraday countertrend rally right now? The answer is no, why no? Because price hasn't taken out any resistance yet as you pointed out We've seen a couple of rally attempts out here in each of these rally attempts I have the roads momentum indicator signals out here, but price was never able to take out resistance So what I can do is share with folks what resistance level is right now on a 30 minute time frame But that's could change at seven and eight and nine o'clock tonight, but right now the number is 32 62 And if price closed over 32 62, we're gonna see price move all the way up to 32 94 Now we're that's 50 points from what we're at right now That's a great trade if you can if you can get that on So I would be watching for that in the overnight action What's really interesting here is if I take a look at these so the ES mini has not taken out any key resistance levels But and I'm sure you would agree with me that the Russell 2000 has been a weak link out here If we take a look at the 30 minute time frame chart for the Russell 2000 We're gonna see that the last half hour bar So at three o'clock price actually did close above the top of its profile So here is an example of a resistance level that is attempting to crack now I like to see two bar closes whatever the time frame is Above resistance or below support to tell me about the potential of a change in trend So in this case here what you're watching for as we come into 330 is about 1632 where it's 1631 40 So a second close above that 1632 level boy That's suggesting to move up to 1666 in the Russell 2000 out there And I finally put that together with all of that put together with what did the ES mini do today? And what the ES mini has done thus far I pull over the daily time frame chart and these Tom are breakout levels that are based upon a tool that I use that are part of the 9s a Tom DeMarca TD 9 set up out here And they helped me to identify where price is most recently broken out and inside the ES mini and these lines are not drawn in by me This is based upon the patterns out here Support is held which was 32 36 were at 32 41 So I want folks to be watching for overnight is some type of nice countertrend rally And folks really easy to get Steve's newsletter the way you do it come over to our website at TFNN You're gonna go into newsletters. You're gonna see mastering probability hit subscribe You are off to the races you get it for a month six months a year all with 38 money back guarantee Steve you have a great one safe one. Of course we look forward to show tomorrow. Thanks Tom. Thank you Stay right there folks come right back