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2023 Mentorship Price Action Review & PM Session Reversal Model
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2023 Mentorship Price Action Review & PM Session Reversal Model

E-mini S&P Daily Chart Analysis

Overview of Market Expectations

  • The speaker introduces the daily chart of the E-mini S&P, outlining expectations for market behavior and discussing what transpired during the trading session.
  • Anticipation grows as more followers join the speaker's Twitter and YouTube channels, bringing their preconceived notions about market analysis.

Critique of Market Commentary

  • The speaker criticizes "armchair quarterbacks" who comment on market movements after they occur without having executed any trades themselves.
  • Emphasizes a commitment to genuine analysis rather than engaging with those who do not contribute constructively to discussions.

Key Technical Levels and Concepts

  • Identifies significant price levels on the daily chart, including potential targets based on closing prices and intraday movements.
  • Discusses fair value gaps and rejection blocks, explaining their importance in understanding market dynamics.

Teaching Methodology Clarification

  • The speaker distinguishes their teaching from traditional supply and demand concepts, emphasizing specific levels over broad zones.
  • Introduces the concept of "consequent encroachment," focusing on key levels within a 20-day lookback period for sensitivity in trading decisions.

Focused Trading Strategy

  • Highlights various trading setups such as order blocks, breakers, and mitigation blocks that are relevant to current market conditions.
  • Shares insights into expected price action throughout the day, including anticipated consolidation periods during lunch hours.

Intraday Market Dynamics

  • Describes how market behavior unfolded differently than expected, with significant movement occurring before lunch instead of during it.
  • Analyzes thresholds for measuring momentum energy as prices approach liquidity levels in the market.

Conclusion: Daily Range Expansion Insights

  • Concludes by reiterating a focus on expanding towards liquidity or imbalances based on bullish or bearish sentiment.

Market Analysis and Trading Strategies

Understanding Market Sentiment: Bullish vs. Bearish

  • The speaker emphasizes the importance of determining market sentiment, asking if one is bullish or bearish. A bullish outlook seeks targets like old highs or relative equal highs, while a bearish perspective looks for old lows or relative equal lows to identify liquidity.
  • For a bullish scenario, traders should look for inefficiencies (like fair value gaps) or liquidity above previous highs. Conversely, a bearish outlook focuses on reaching inefficiencies below current prices.
  • The core algorithmic approach involves identifying whether the market is likely to reach for inefficiency or liquidity based on the trader's sentiment—bullish or bearish.

Daily Range Expectations and Price Action

  • The daily chart shows key levels such as rejection blocks at 40.55 and an old low at 40.35, which are critical in formulating trading strategies based on price action.
  • The speaker notes unexpected price movements within a single day that deviated from initial expectations regarding daily objectives and potential stops.

Analyzing Hourly Chart Dynamics

  • On the hourly chart, buy-side liquidity is identified through consolidation patterns leading to smart money reversal points, indicating areas for potential accumulation.
  • There was anticipation of deeper retracement before significant trading hours; however, shallow drops led to hesitation in taking positions due to insufficient movement below established lows.

Decision-Making in Trading Positions

  • The speaker reflects on missed trading opportunities due to lack of deeper retracements during consolidation phases, highlighting the importance of patience and strategy alignment with market behavior.
  • Acknowledging that missing trades is common among traders, various personal factors can influence decision-making processes when engaging with the market.

Engaging with Live Market Data

  • The speaker shares insights into their live trading experience while mapping out charts in real-time via social media platforms like Twitter for educational purposes.
  • Emphasizing self-study and engagement with provided materials encourages traders to analyze their own charts alongside shared insights for better understanding and learning outcomes.

Consolidation Patterns in Lower Time Frames

  • In lower time frames (15-minute), specific consolidation patterns are analyzed where original distribution leads into reaccumulation phases indicative of market maker behaviors aimed at clearing out prior positions.

Market Analysis and Trading Strategies

Anticipating Market Movements

  • The speaker discusses the expectation of a market drop for a second stage reaccumulation, indicating a preference for waiting for an important low to form before entering trades.
  • Emphasizes the importance of anchoring trades to significant levels, specifically mentioning a breaker with a fair value gap as part of their strategy.

Observations During Market Hours

  • Notes that the market delivered a complete swing during lunch hours but did not provide an opportunity for participation due to prior movements.
  • Highlights the desire to see the market spike down into specific fair value gaps at 9:30 AM, which would have cleared sell-side liquidity.

Key Levels and Market Dynamics

  • Identifies key target levels (40.35 and 40.12), expressing confidence in reaching these points based on market behavior.
  • Describes how the market rallied after an initial sloppy open, eventually reaching resistance at 40.55, which is noted as an old rejection block on the daily chart.

Liquidity and Trading Psychology

  • Discusses buy stops above relative equal highs perceived as resistance by retail traders, leading them to short positions while placing stop losses above those highs.
  • Observes how the market took out buy-side liquidity before dropping back down, illustrating typical trading patterns and trader psychology.

Analyzing Fair Value Gaps

  • Explains observing imbalances in buy-side and sell-side efficiency within fair value gaps, noting shifts in candle structure indicative of potential reversals.
  • Mentions creating another imbalance after taking out sell-side liquidity, suggesting institutional involvement in price movements.

Preferred Trade Setups

  • Expresses disappointment over missed opportunities to trade down into preferred setups based on hourly charts and 15-minute time frames.
  • Reflects on personal trading preferences while acknowledging that alternative trades can still be found even if ideal setups are not available.

Understanding Market Structure Shifts

  • Introduces concepts related to PD arrays failing and becoming inversion levels; highlights manipulation within markets characterized by erratic price action.
  • Discusses bullish breakers that take out liquidity before retracing below previous lows—indicating complex market dynamics at play.

Market Analysis and Breaker Concepts

Understanding Breakers in Market Dynamics

  • The speaker discusses the sell-side levels of 3984 and 3982, expressing a preference for these levels to hold as potential support before moving back up into the breaker zone.
  • A critique is made towards those teaching market concepts incorrectly, emphasizing that misinformation can lead to ineffective trading strategies.
  • The speaker identifies a bullish breaker and anticipates a move towards the level of 4012, indicating this was communicated on Twitter during market movements.

Liquidity and Market Behavior

  • The discussion highlights the importance of liquidity at specific levels, particularly around 39.82 and a half, which serves as a midpoint for daily chart gaps.
  • Observations are made about market behavior post-opening at 9:30 AM; despite expectations for lower prices, the market quickly retraced upwards into the breaker area.

Fair Value Gaps and Algorithmic Trading

  • The speaker emphasizes their unique approach to analyzing fair value gaps rather than traditional supply-demand models, focusing on how imbalances affect future price action.
  • There’s an assertion that algorithms remember past imbalances; thus, they will revisit these areas when forming new price actions.

Bullish Sentiment and Entry Patterns

  • A bullish sentiment is established with anticipation for reaching the level of 4012. An entry pattern is discussed within the context of existing fair value gaps.
  • The analysis includes details about candle bodies closing at significant levels which indicate strong support zones leading to upward movement.

Consolidation Patterns During Lunch Hours

  • As markets rally towards key resistance points like 40.35.25, consolidation patterns are noted during lunch hours where algorithmic behaviors reflect on price action without actual breaks in trading activity.

Market Analysis and Trading Strategies

Daily Chart Insights

  • The daily chart indicates a retracement lower, targeting lunchtime lows as the algorithm adjusts downwards. Key levels include the Fairway Gap and a 15-minute favorite gap with an initial upside objective range of 40.17.5 to 40.12.25.

Reaction to Market Movements

  • A bold short block reaction occurred, resulting in a five-handle movement, showcasing effective trading opportunities.

Rejection Block Analysis

  • After hitting the rejection block at 40.55.25, attention was drawn to this area for potential bullish strategies based on previous highs.

Importance of Note-Taking

  • Emphasized the necessity of taking notes during analysis sessions to capture key levels that may be relevant for upcoming weeks, referencing past significant levels like 39.82.5.

Bullish Expectations and Fair Value Gaps

  • When bullish, traders should look for fair value gaps near old highs after breaking previous highs while considering higher time frame objectives.

Market Structure and Selling Opportunities

  • Identified a fair value gap categorized as inefficient on the sell side; expectations were set for market behavior following this inefficiency.

Potential Reversal Signals

  • A broken swing low indicated potential reversal signals; aggressive selling was anticipated upon reaching specific price points within established gaps.

Breakdown Strategy

  • Suggested using breakdown strategies when market makers initiate sudden sell-offs targeting lunch hour lows, emphasizing timing and precision in execution.

Algorithmic Trading Insights

  • Highlighted how algorithms reference specific fair value gaps for trading decisions; recommended placing stop losses strategically above these gaps.

Real-Time Trading Examples

  • Provided real-time examples from Twitter where setups were mapped out before reversals occurred, demonstrating practical application of discussed strategies.

Liquidity Targets

  • Discussed liquidity targets such as 40.38 and subsequent levels like 40.35 quarter level based on prior knowledge of market behaviors during lunch hour sells.

Order Placement Techniques

  • Explained order placement techniques around old highs with limit orders positioned just below candle openings to capitalize on expected movements effectively.

Macro Patterns in Algorithmic Trading

Playlists: 2023 ICT Mentorship
Video description

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