56. advanced pa lecture '30-may'

Market Analysis and Price Prediction

Introduction to Market Predictions

• The speaker greets the audience, expressing hope for a wonderful week and aims to enhance it further through market insights.

• Emphasizes the goal of predicting price movements as traders while introducing new concepts relevant to trading.

News Events Impacting Trading

• Discusses the significance of news events scheduled at 10 a.m. and reflects on previous news at 8:30 a.m., suggesting limited volatility from that event.

• Highlights the importance of sequential S&T (Smart Money Techniques) in understanding price movements, particularly during Q4 known for reversals.

Trading Strategies Based on Weekly Patterns

• Suggests that Wednesdays are typically more favorable for trading than Tuesdays, despite no significant news events on Wednesdays.

• Explains "delayed expansion" or "delayed protraction," indicating how liquidity engineering affects market behavior post-news events.

Analyzing Price Movements Post-Bank Holiday

• Advises traders to look for expansions after bank holidays when combined with news events, targeting major highs like monthly cycle peaks.

• Reiterates the strategy of avoiding trades immediately after bank holidays, advocating for waiting until Wednesday or Thursday for better setups.

Understanding Market Conditions and Liquidity Draw

• Discusses current market conditions being low probability due to price ranges but acknowledges potential liquidity draws influencing reversals.

Market Dynamics and Price Movements

Understanding Price Movement in Market Cycles

• The discussion begins with the importance of recognizing when prices should be moving or not, referencing the high of Q3 as a critical point in the monthly cycle.

• The speaker notes that for NASDAQ, there was an expectation to see no sequential S&T, which was observed. However, hidden sequences were also present, indicating complexity in price movements.

• A candle closing above a previous one is highlighted as a method to confirm sequential SMT (Smart Money Technique), emphasizing the need for price to push above certain highs.

Sequences and Market Analysis

• The concept of sequences is introduced; they are crucial for understanding market behavior. The focus shifts primarily to the S&P 500 and NASDAQ while briefly mentioning Dow's performance.

• Intermarket analysis reveals that hidden market sequences provide validity to predictions about price movements. High probability setups are identified based on these sequences.

Expectations of Market Weakness

• Observations show that while the British Pound took out previous quarter highs, NASDAQ failed to do so but closed above its last highest close. This discrepancy indicates potential weakness in market dynamics.

• The speaker explains expectations of fluctuations around new weekly openings and discusses why weakness was anticipated based on prior market conditions.

Key Insights on Dow's Influence

• A significant sequence is noted where price movements are influenced by trends in the Dow. It’s emphasized that understanding this relationship is essential for predicting future movements.

• When observing divergence between Dow and other indices like S&P 500 and NASDAQ, it suggests recalibration towards alignment with Dow's direction.

Anticipating Market Conditions

• The speaker illustrates how discrepancies between indices can lead to expected drops in prices when one index (Dow) shows consistent downward movement while others remain stagnant or elevated.

• Historical patterns indicate that when SMT occurs, it often leads to reversals in price trends; thus, anticipating such changes becomes vital for traders.

Simplifying Complex Concepts

• Emphasis is placed on simplifying complex data into actionable insights rather than relying solely on hindsight analysis.

Insights on Market Dynamics and Geopolitical Tensions

Understanding Market Movements

• The speaker emphasizes the importance of backtesting in understanding market movements, suggesting that historical data can clarify current trends.

• Observations are made about the Dow's sudden movements compared to the NASDAQ and S&P 500, indicating that explosive market moves often occur when these indices are out of sync.

• High probability trades are identified during periods of divergence among major indices, highlighting a strategy for traders.

Geopolitical Concerns: Taiwan and China

• The speaker expresses concern over rising tensions between China and Taiwan, noting its potential impact on global markets.

• Taiwan's significant role in semiconductor production (90% for US consumption) is highlighted as a critical factor in this geopolitical landscape.

Impact of Nvidia on the Stock Market

• Nvidia's dominance in technology manufacturing is discussed; it plays a crucial role in various sectors including Alphabet and Tesla.

• The speaker argues that Nvidia is currently propping up the stock market, with its performance being closely tied to broader economic conditions.

Anticipating Market Reversals

• A warning is issued regarding potential declines in Nvidia’s stock if geopolitical tensions escalate, particularly with China's actions towards Taiwan.

• The need for reasons behind market reversals is emphasized; understanding underlying factors can help anticipate future movements.

Broader Economic Context

• The discussion touches upon cycles within financial markets, hinting at an upcoming "Kill Zone" for significant events which could affect trading strategies.

• A reminder is given to monitor correlations between major indices like the Dow, S&P 500, NASDAQ, and other economic indicators such as currency pairs.