 Welcome traders to this week's live market and trading analysis session with me Patrick Monthly. I'm going to be providing some insight into the E-mini S&P 500 today as we head into the cash open for New York trading. Before we get started here, obviously want to adhere to risk disclaimers. Views and opinions expressed by me are solely mine, they're not indicative or representative of those held by Tickmill UK and Tickmill Europe Limited and obviously trading carries inherent risk and you should assess your personal risk file before getting involved in the markets. So we're going to get going here in just a couple of minutes. I'm going to start off with a recap of the overnight session. I'm going to look at the trade plan heading into the cash session, identify some trade levels. I'll update you on my perspective and we'll go through the live action during the the open here and see if we can identify any asymmetric trading opportunities. Any questions you have feel free to type them into the chat. We've got a chat on Trading View and I'm guessing we probably have a live chat on the YouTube stream as well. So if you want to post questions into either of those chats, I'll jump back to them as and when I have chance during the session or at the end of the session depending upon how the action unfolds as we get going here in just over 10 minutes for the opening of the New York Stock Exchange. Okay, let's start with a recap of the overnight action before we get started actually. Just for those of you who aren't involved in the Facebook group, in partnership, exclusive partnership with Titmil, I run a strategy group, trading group, focused on futures options, forex, most markets really, and I provide daily updates, observations through the main page here as you can see. We get institutional insights and various technical observations. I provide trade setups, trade analysis, market analysis, all via this main page. But more importantly, the Titmil trader chat you can see here, you can join that once you access the actual group. This is more of a real-time environment where I post my ongoing market observations throughout the London and the open of the New York session, provide real-time trading updates, trade plans, institutional research from some of the major investment banks, which gives you a perspective on how the bigger players are positioned. I refer to it really as market intelligence as opposed to anything that you're going to immediately action, but it's really useful to have a gauge of how the bigger players in the market position because essentially as retail traders, what we're trying to do is ride the coattails of these bigger players and grab some of the meat of the move that these larger funds and trading desks are predominantly driving. So feel free to request access to the main page and then you can also access the trader chat. Let me just turn down this wire service in the background here one second. Okay, let's take a look at the trade planner from this morning to get a sense of the levels we're watching. So obviously we've got options expiration tomorrow, Friday, and I don't tend to be particularly active during options expiration. We obviously get some pre-erratic price action more often than not around that time and technical levels tend to be less adhered to. Certainly not as much on the monthly option expiry, which obviously we've got tomorrow, more around the quarterlies when you really get that impact in terms of options positioning and market makers and dealers trying to hedge out their risk. So coming into today's session we are long to neutral against this weekly bull bear zone. The bull bear zone that I am using for this week is the 4760 to 4770. Now yesterday we traded below there, we traded down to the 4740s coming just shy of the 4740 test before getting an impulse off the lows into the close last night. I did highlight to the guys in the room in the strategy group, sorry, that as we traded into that 4740, 4730 area, especially if it was late in the day I was going to be watching for a reaction there to engage on the long side. I got filled on a long through 4765 last night, managed to get half my position off plus five, so I'm risk free essentially long from 4760. Then coming into the London session today, I highlighted the potential for some resistance to come in around the 4790, 4795. That was via a voice note that I posted into the Tick-Mill Trevor chat. So guys in the group had advanced warning at that level and I watched for the reaction we got post the jobless claims where we tagged that 4795, we exceeded it by a couple of ticks and I played the reaction there off that level for a short, got filled at 4790. Again got half my position off risk free, so currently I'm running a long from 4760 which is risk free and a short from 4795 which is risk free. Now with these positions, I'll be watching for signs as we head into the cash session for one of those positions to be invalidated and then I'm going to be looking to add to the trade that that is working and at this stage my focus is on the long side. So I'll be looking for a breakthrough at 4795. The Clobex highs 47, just below 4798 and through the 4805 level to look to play long positions up, targeting a test of the expected range resistance today which actually comes in, that level on the 4801 is our expected range resistance. So if we can get through that 4801, then what I'm going to be watching for is using the market internal indicators to confirm that we have bullish momentum across the board and then we're going to be looking to add to those long positions. The target on the upside then is going to become the 4832 which is a two sigma standard deviation to the upside versus last night's closing price and technically more often than not, 95% of the time actually statistically speaking, when we test that 40, that two standard deviation move to the upside so the 47, the 4832 is 95% of the time, the market will actually close below that level and so if we pay close attention, if we get to that 4832, obviously 4825 has been significant resistance and those 4830s have held on numerous tests this year, but if we get a break there then we're going to be starting to take a look at the 4850s, 4860s and the 70s and I'll update you as to the levels if that plays out. Now the downside scenario is we start to get acceptance back below the 4780, the 4780, 85 level is this is today's current intraday ball bear zone. Let's move actually to the charts here so you can see this is a multi-time frame view, we've got the hourly chart here at the top left, four hour chart with the trade levels marked on so you can see I'm just shy of that 4801 daily projected range resistance, we've got daily projected range support down to that 4740, if we take out the 4740 on the downside 4710 should see a test and again that's a two-sigma move to the downside where once again we will be looking to play a potential counter trend long depending on the price action. So let's move to the intraday chart so this is my trading setup for the cash session, you can see this chart to the left is a five-minute chart and this is the one-minute chart, I use the one-minute chart specifically for the entity cases, the market internal tools that I use, this top pane here will be populated with what's called the TIC, the TIC highlights in every one minute iteration the amount of stocks on the New York Stock Exchange ticking up versus those ticking down, we have extreme areas that we monitor and when we trade towards this red zone so that's a thousand TICs on the upside, more often than not that will signal a pause in the move to the upside potential profit taking, a lot of programmatic trades use the TIC for profit taking and can if we're trading into one of the predefined supported resistance areas can actually act as a potential trade signal for me and vice versa on the downside of trading into the green zone here that's telling me that at least a thousand stocks on the New York Stock Exchange are ticking down as an extreme where we can see some programmatic profit taking so take less attention to the TIC and the trend I'll highlight that as we get going once it starts to populate above there we have the breadth indicator so the breadth is telling us the amount of volume the money flow into stocks going up versus stocks going down when we're when we're getting prints above the zero level that suggests there's more money going into stocks that are trading to the upside than there is to the downside vice versa when we are below the zero level that's a bearish reading suggesting more money is actually flowing into the stocks that are trading down versus those trading up and gives a bearish confirmation the top pane here is the AD line the advanced decline line so that's telling us how many stocks are advancing versus stocks declining and again trading above the zero level is bullish more stocks advancing on New York Stock Exchange than declining trading below the zero line is is a negative read and suggests bearishness so I use these these indicators or these market internals as to give me a read underneath the hood of the of the action that we're seeing at an index level when I refer to the index level obviously is the S&P 500 is the index the futures are derivative and the readings that we're getting from these market internals are actually telling us more specifically what's having happening at a stock level so at the constituent level of the S&P 500 so if the market is if the price action is moving to the upside or we're advancing but the breadth of the AD line are negative and that's telling me that underneath the hood there is there's a problem with the current trend and we're likely to see the potential for a reversal in the market the last tool I use and the one I refer to pretty regularly here is Delta market Delta so without going into too much detail here just as we're heading into the open Delta is essentially a reference to buying and selling pressure so if price is trending to the upside we want to see the Delta making new highs as a confirmation of the strength of the trend if we are seeing price move into highs as we saw with the spike here into that 97 25 in the pre-market you'll note that we didn't get a new high in Delta here we actually got what I referred to as Delta divergence so price made a new high we didn't get a new high in the Delta and that was my signal for the short trade that I'm currently in so I'll refer to Delta divergence regularly throughout the sessions over the weeks as we go ahead and you should be able to pick up what it is or how it is I use the tool but it really is a fantastic tool for confirmation or non confirmation of moves combined with the other market internals so we're a minute out from the open here and let's see where we where we open up and then I'm going to update trade levels what I'm using at the moment as we head into the cash trading session the blue and the gold line on here on the five minute chart represents the halfway back for the current trading session and the volume waste average price that's the blue line for the the current trading session that we have since the futures reopened last night in New York so so again I reference those as school session mid full session bwap and we use those throughout the session as reference points and certainly on pull backs they're very useful in confirming trends at the moment we are trading below the the daily five-period look back volume waste average price now this is key for me as it defines the the trend on the higher time frame and you'll notice here although these on a normal candlestick chart price moving to the upside we see green candles minor current colored red because we are trading below that that daily trend reference point which is 47.95 at the moment and so just to help me with with just an easy visual of where we are in the markets I have those colored with the trend for those who are in the strategy group you you can access these these indicates and my specific chart setup I share that with I can share that with you on personal request through the through the chat group so markets opening up we are positioned bullishly above the 47.80 and what I'm watching for now is as we open up let's see how these internal shape up we're getting a nice push higher here in terms of the one-minute market delta and we are trading above the full session mid full session bwap so for now the focus is to is to the upside for me personally what I'm obviously looking for is if my stock gets taken at the 47.95 that's going to be that's going to position me to the long side and I'm going to be looking for opportunities to add to my my long from 47.65 which is risk free versus 47.60 so let's see let's let these opening rotations go through and then we will we'll see where we are any questions like I say feel free to type them into the chat box and as and when I will I'll get to them as as timely fashion as possible market action allowing so we are seeing a positive ad line although we're pulling back off the opening prints here we have a positive breadth and tick opened up and an extreme obviously given the the overnight move that we've seen it's a it's a bullish reading on tick so we let the opening rotations go through to let the the internal settle out and see what we're looking for is an opening swing reference so we we opened up in that 47.86 we have the these two green lines that you can see forming here on the minute chart they are used for reference points for the initial balance measurement the initial balance is the opening hours range of price action because that has the the opening the iB high or the iB low are our reference points as the the day's trading continues so once we get through that opening hour those areas certainly if we're trending pullbacks to the iB high connect to support pullbacks to the iB low if we're trending to the downside connect to resistance and also we have a use for the the initial balance in terms of days when we gap up or gap down in terms of price because statistically there's a hyperability scenario that if we gap up and we don't we don't test the halfway back of the gap in the overnight session the gap from the close of the prior day and we break the iB high that's what we call a gap and go trade and those can be again really useful trading tools on on trending days obviously we we have opened with a small gap to the upside here at at the moment versus yesterday's settle price so we have a half gap let's draw that in so we've tested overnight we've traded in so the half gap comes in at 4782 and traded there yet in the full session now like i say because the gap versus last night's settle is is just about 10 points i prefer to trade the gap and go trade we like to see gaps that are bigger than 10 points to give a a decent signal but we do have that gap so watching for that that gap area 4782 to get filled we have just below the full session full session vwap so those are going to be some initial key references to suggest strength in this in this recovery to the upside but as as highlighted before in terms of the higher timeframe we have traded into the high volume on the alley timeframe 4792 trend channel resistance and currently have been rejected and hence the current short exposure that i'm running versus my my mom from yesterday's close so if we can get some if we can get a break of this 4800 4801 which is the anticipated range resistance for the day so if we can start to establish some value above there then what we're going to look for are these internals to be trending to the upside and we're going to be looking to play continuation trades so we look for a break consolidation and and then we look to play the break of that consolidation with the current trend to the upside i would highlight for trades my initial risk on any trade automatically through my automated trade management software means that i have a 10 point stop and that initial 10 point stop is equal to 1 percent account equity that's my pa account i obviously manage external capital as well and i have a reduced or a five more conservative risk exposure on that but personally i allocate an initial 1 percent risk and i look for more often though i'm looking for a five point move in favor of my trades to take off half that risk and reduce my exposure and then i use that five points that i've taken as a buffer for any pullbacks to my entry point especially when i'm playing continuation trends because we're playing breaks of resistance more often than not you get that well there is a tendency obviously to retest resistance as support but when markets really move you don't get those pullbacks that's why i play the continuation trades um given depending upon the the market structure and environment we're in and certainly if we start to take out that uh that hourly trend line uh trend channel resistance through the 4800s through the 4885 then we're looking at 10 15 and 24 and our two standards deviation resistance today comes in at 4832 on on the upside so those are going to be my immediate upside targets if we if we can hold the full session mid and full session b right before a for an upside extension here the alternative scenario is that we trade back down through the gap we take out the full session mid full session b wap and we uh we take another look at the 4770 from the upside now if uh if that plays out that's going to be to my mind first signal that we the elongs are in trouble and we could be seeing another leg to the downside and that then will set up those downside targets that i reference in the pre-market here we have 14 at the moment so we have uh we've traded just shy of the half gap versus that uh that 67 settle yesterday so we haven't tested the half gap yet so we're seeing the uh the ad line pullback breadth is around the zero line at the moment so no strong signal from the internals and that as you can see is replicating the price action we're going nowhere fast at the moment and uh i would highlight as well obviously we have options expiration tomorrow on Friday so it's likely that market makers are going to want to try and pin the price action to the uh the highest volume strike which i imagine is uh is somewhere around the 4800 level i'll actually drop you somewhere some confirmation on that let me see in any questions feel free to type them into the chat okay so no uh no tests so far back into that uh that half gap so this is suggesting we're we're getting some upside momentum developing here or energy building for the upside but we're not getting any confirmation from price as such at the moment so as we uh as we continue to trade uh within this opening swing TSNA has the recent index rate nine cycles that i think are actually released they're the only second right are filming in the planes i was thinking the delta starts are all over here we're pulling back uh from that 4790 let's see if uh if bids develop here into the half gap 4782 where we've got that full session mid and full session vwap sitting just above there so that's the confluence for um where you'd expect buyers to sit back in if we are going to make a make a move higher here the red gold and green lines you can see here this is the value area low for the current sessions that represents the base of 70 percent of the price action from the overnight session and so that's that's a key reference point 4775 the gold line represents the highest volume node for for the current session 4786 and the red area the red line represents the top of the 70 percent of the overnight volumes that's 4797 so those are the key reference points for then keeping an eye on throughout the day as uh as the volume profile builds currently you can see clearly we've got two distributions and up on a lower distribution we take out the lower distribution so it certainly shifts to the potential for downside price discovery at the moment like i say we're holding this key areas 4782 4780 as support for now no uh no real meaningful excursions away from that area currently for mexico which is written supporting must take a long at someone's the mexico city okay here we are 4783 tested just another 4782 you can see the blue line represents the volume based average price you're watching for bids to develop here what's the tick you're looking for strong tick prints here to suggest volume moving in uh to uh two shares ticking higher as we test those key reference points a lot of algorithms and programmatic trading models for uh large investment banks or trading desks use the volume based average price for the day as a reference point of value if they're having to execute big block orders for clients clients be watching um for that volume wasted average price as a reference point for where their trades are filled to represent that they're getting good value from their their execution desks and so if we uh if we're going to make we're going to make a strong push for the upside what we're looking for on this initial test back into the volume wasted average price you can see overnight we basically rotate it around it using it as support and resistance throughout overnight session and we're now looking as we head into cash session our first clue as to whether buyers are in control is going to be can we defend that full session mid full session vwap and uh i'll make a move higher here let's see oh in terms of the mag seven we've only got tesla and there's some pressure here 215 i'm currently running along in tesla from 218 using a 211 stop at the moment okay so there's the um the bid that's come in initially to defend the full session mid full session vwap to that 4780 has acted as initial support now see if we can take out the ibe high here as the as the next reference point to uh building building positivity here so the current ibe high of 4791 47975 so we need to see a move through there now to start to get this momentum going to the upside uh breadth is uh is neutral really and the ad line although positive is trending down from its uh from its opening print so again some big signals at the moment hence we're seeing some chop some heavy rotation in and around these uh this 4780 4790 so nothing to do at the moment waiting for uh running for a clear signal we've got a tick that is just between the uh plus 400 negative 400 print now tick is good also for confirming chops so when we're in that uh that plus or minus 400 zone that's uh that's suggesting just rotation for now not seeing any uh any meaningful trend developing the tick and certainly once if we do move out of this current ibe at the 4780 4790 want to see the tick start to move with that price trend has again there's a confirmation so it's really one of the key aspects of trading in the new session is this idea of being able to use these market internals as fantastic confirmation tools for your trades and certainly the more familiar you become with them and and and understanding how i think you know there is their movements as a reflection of the individual stocks feeding into what we're getting in terms of an index level movement you can really use them to your advantage and certainly i have for uh for a career that has now spent over 15 years again any questions feel free to type them into the chat boxes and uh and i'll get to them as and when a little bit more pressure coming in here on the downside we're seeing uh the delta start to to roll over a little bit here seeing that tick you see that push down in the tick you're seeing there at the moment now that's uh that's weighing on the market which as i said the breadth the top pan this pain here although open positive we are trending to the downside at the moment and sorry the ad line trending to the downside and we have breadth now that is just going a touch negative here so this is a bit of a concern here for um for the longs and we have now filled the half gap so uh that gap and go trade that i referenced at the beginning of the session the break of the ivy high is is no longer valid now as we've traded the half gap uh during the um the initial balance session so that trade is is off the table for me now but we are uh we're still holding in and around support we just want to see these internals improve here we'll start to pick up if we can if we can catch a uh a bit as uh as we test support for the seven eighties we've got all the uh the mag seven now in positive territory so for those who aren't familiar with the mag seven days these are the seven bigger stocks uh on the stocks exchange at the moment apple Tesla and video and microsoft google amazon and meta and again if those guys are all in the green uh you know with that set that's a positive contribution very in mind they are the majority of volume that we're seeing trade in the markets at the moment so you also use those again as another internal reference point and that's why i have them up in the screen here this watch list i have um it's basically my reference point when i open the charts in the morning i'm going to know first and foremost what the dollar's doing what yields are doing what the VIX is doing in the bond market then we look at the futures here and uh the overseas futures markets uh european bonds european markets major effects bitcoin gold crude uh the mag seven then uh below there as we move into into the cash session so again a bit of weight coming in here we're testing now 47 eighties want to see again watch the tick here we want to see some big tick prints if we're going to defend this area as as a reference we've got uh the value area low now has rotated slightly higher so we've got 47 76 as the as the value area low so if we start to trade down below there i think we could be starting to look for a um further downside price action 4770 then into the overnight lows 4763 4760 which would which would take out my my long position uh over and last night and so again if we move through there then my focus shifts to the downside and uh i'm going to be looking for downside targets and entries to or i'll be looking to add to my the short that i'm currently running from 4795 there's some uh we're starting to see some positive tick prints here develop five minutes got a nice response there and i see that one closed green strong green clothes want to see the delta flip bullish here as well if uh if we're going to defend this what you said yeah bummer index is picked back up training towards session highs 103 50s now again he's adding weight If the Doherb index more often than not is advancing, that's a risk-off indicator. VIX is picking up a little bit, 14-4 on the VIX. We were trading sub-14 at the open. So a couple of warning signs here for longs, but we are still holding in and around the full session with the full session VWAP. So again, there's nothing for me to do at this stage, and it's just the nature of the market. There isn't an opportunity, an immediate trading opportunity for me versus my strategy. So I'm just watching at this stage, I'm gathering information from other markets, using the internals to get a sense of where we may be headed. I have trade levels in mind, obviously that I've already given you pretty fine levels, where I'd looked to engage the market, but we are not testing those at the moment. And if you look at the overnight range, we're sitting right in the middle of it, and this isn't a high probability trade location as more often than not. We're just going to see chop here without any real strong rejection from that full session VWAP. When I talk about rejection, I'm talking about small impulse moves. So for me, a strong rejection from the test here into the full session VWAP would have looked for an immediate test, a pullback, and then to take out that IB high. And then that's that, if that momentum is building, and we're getting the confirmation from the internals, then obviously my focus is on the upside, and I'm looking for a breakthrough, the price cycle highs, the overnight highs, and then pullbacks to either buy on a pullback into predefined support, or first pullback, consolidate, and then play the break to the upside in the continuation trade, as long as we're getting confirmation from the internals and specifically the deltas. So if price is pushing through the high, I want deltas to be making new highs as a confirmation. And that's my trigger then to enter the trade to to join the trend. But at the moment, we are we're sitting pretty much slap bang in the middle. And there's nothing to do right now. The first 30 minutes of trade wrapping up here in a minute, if we're still sitting here in the midpoint of the overnight range, and not seeing anything meaningful developed, I'm not just going to stand here talking for the sake of talking. If there aren't any questions, then I'll allow you to join me in the Facebook group. And you can access, sorry, you can request access using using this link, facebook.com or size groups. Actually, I'll put that into the chat for those that are interested. And specifically, then you can you can access that. And then that will give you the link then to get through to the through to the Facebook, the messenger group, the trader chat. Thanks to the guys have posted the chat link into the chat on on YouTube there. Let's see where we are as we come into top of the hour. Destroyers are sitting in the midpoint of the initial balance. So we're holding 47 79 support and 47 90s resistance. So quite tight initial balance currently forming at 10 points. I've seen the AD line recover off the test of the zero line. All the breath remains neutral to negative. And the tick distribution, we haven't seen any ticks above the 500 level so far. So we're in there in terms of the tick. And currently we were seeing to try to pick up here as we as we hold the the VWAP and seeing more pressure here on the up tick. So as we try to get through the the current session mid. So the cash session mid there, 47 86, we're getting rejections. So we're still still not seeing any meaningful upside traction here. Value area low for the session has now we're testing it now at the moment. So we really want to see some demands that sort of bias start to step in here. If we're going to see this continuation move to the upside, I was still pushing higher along with the VIX game weighing on risk sentiment. Certainly bulls would not want to see the VIX turn positive on the day 29 2.6 4% but because of the level the VIX is trading at, that's kind of exaggerated. So I paid more attention really to that point 0.38. So we're not far from from flipping positive on the day in terms of the VIX at the dollar. Still trading above that 103 level reference that yesterday's technical trade setup video 103, 102, 50 area is going to be key. If we defend that, then I'm expecting the dollars to get another leg higher up into the 104, 104, 50s kind of video of that yesterday shared through the tip mill YouTube channel. Those that are interested, you can watch that yesterday's daily trade setups for what I'm anticipating. We'll see in the dollar, Tesla rolling over again, gone negative, holding, trying to see buyers are trying to defend the value area low. So you can see this green line is the value area low. This represents the base 70% of the volume traded is between 4790 and this 4780. And so buyers are trying to defend that area, build a base there to, we now have the volume pointed control for the session 4786. So that's the highest volume. That's when most of the price action has taken place since it was open up last night. So we're trading below there at the moment. So again, signals not giving any real clear reading at the moment. And we're stuck within a fairly tight initial balance for now. So I won't stay on here just for safety. We haven't really seen any significant move. Like I say, I'm currently short 4790 with a risk-free 4795 stock. I am long from yesterday to be 765 with a 4760 risk-free stock. I'm looking for potentially for my shorts up to get taken out. So if we take out the 4800, 4801, the range resistance, then I will be looking to play continuation trades to the upside. So I'm looking for a break, consolidation, then a break of the consolidation with the internals confirming. So I want to see positive AD line, positive breadth. And I want to see the deltas making new highs if I'm going to play the breakout as a confirmation. Alternative scenario is we take out the 64, the globex lows here. Then my attention is going to shift to the downside and I'll be watching for a break, consolidation and then looking to play continuation to the downside. My downside targets are the 4740, 4730 and the 4710 area, which are two standard deviation move. The 4832 is a two standard deviation move on the upside. Both that 4832 and 4740, I would look to play counter trend moves off, especially if we test those levels late in the day. But for now, I'm not too much going on. We have like I say OPEX, options expiration tomorrow. So that's likely pinning the price action in around this 4800 level for now. As always, traders, plan the trades. Trade the planner. Most importantly, manage your risk. I will run another live session next week, either Wednesday or Thursday. And I will update in terms of the confirmation of the day and access details into next week. Thanks very much. Hope you found this useful.