Beautiful pictures were painted last night and throughout today's trading day by the Zone-Trader model on both the Weekly and Monthly Profiles, alerting traders and allowing them to identify a bull trap that was set by the price action and the close of Tuesday's trading session on a daily chart.
Zone-Trader Philosophy identified a failed bullish breakout on the Quarterly Profile 6 trading days ago, suggesting a retrace or reversal of the current uptrend was developing and to expect lower prices as the ESU13 was beginning to revert back to the point of control or the Zone-Trader Pivot at 1641.25.
We then begin looking for sell signals to generate on the Monthly and Weekly Profiles, utilizing the lower time frame in attempt to pinpoint our entries on the short side, and to identify profit taking price areas, as well as to identify or acknowledge manipulation based price action in the bullish direction that derive from large speculator volume in order for them to create a better entry for themselves to go short.
The ability to identify this manipulation that the Zone-Trader provides clearly displays and alerts traders to any and all bull or bear traps that are currently developing, depending on the direction of the current trend. In this case with the ESU13 currently in a strong uptrend and a retrace or reversal of that trend underway, traders acknowledge this manipulation as a bull trap, and easily side step or spring it, which allows them to take advantage of trapped long positions and the decrease in prices that will occur do to their sell stops being triggered and converted to market orders; ultimately pushing prices lower and increasing the velocity of the bearish movement.
The Weekly Profile has told us that the bears are in control of the market on the week, and they will attempt to maintain control, while simultaneously trying to create a bearish breakout and possibly establish a downtrend on the week. The Zone-Trader Philosophy told us this due to the Persistence Zone which gives us traders our control bias falling above where the market opened on the week. If the market opens below the Persistence Zone then the bears are in control, because the Persistence Zone is a zone from the profile's that is being analyzed prior plot where the market spent the longest period time. Wherever the market trades for the longest period of time tells us that there is an even number of buyers and sellers and that this area is where the fight is the greatest between the bulls and the bears.
Today the ESU13 failed to confirm an uptrend generating a sell signal, while simultaneously the bears maintained control of the market as they began selling when prices entered inside the PZ and provided the needed volume to block the bulls from taking control as well as from establishing an uptrend. The combination of both of these auction market theories occurring simultaneously creates the ability for the market to jump start and sustain bearish price movement. The PZ is identified by the two orange horizontal price lines.
This picture being painted by the Zone-Trader Philosophy on the Weekly Profile also confirmed that our current assessment on the Quarterly was correct and that we were right to assume that the price action and closing price from Tuesday's session was indeed a bull trap and allowed us to avoid getting caught in this trap and to take advantage traders that did, by pushing prices lower and taking out these trapped traders stops, again creating that domino effect and decreasing prices further.
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Zone-Trader Philosophy identified a failed bullish breakout on the Quarterly Profile 6 trading days ago, suggesting a retrace or reversal of the current uptrend was developing and to expect lower prices as the ESU13 was beginning to revert back to the point of control or the Zone-Trader Pivot at 1641.25.
We then begin looking for sell signals to generate on the Monthly and Weekly Profiles, utilizing the lower time frame in attempt to pinpoint our entries on the short side, and to identify profit taking price areas, as well as to identify or acknowledge manipulation based price action in the bullish direction that derive from large speculator volume in order for them to create a better entry for themselves to go short.
The ability to identify this manipulation that the Zone-Trader provides clearly displays and alerts traders to any and all bull or bear traps that are currently developing, depending on the direction of the current trend. In this case with the ESU13 currently in a strong uptrend and a retrace or reversal of that trend underway, traders acknowledge this manipulation as a bull trap, and easily side step or spring it, which allows them to take advantage of trapped long positions and the decrease in prices that will occur do to their sell stops being triggered and converted to market orders; ultimately pushing prices lower and increasing the velocity of the bearish movement.
The Weekly Profile has told us that the bears are in control of the market on the week, and they will attempt to maintain control, while simultaneously trying to create a bearish breakout and possibly establish a downtrend on the week. The Zone-Trader Philosophy told us this due to the Persistence Zone which gives us traders our control bias falling above where the market opened on the week. If the market opens below the Persistence Zone then the bears are in control, because the Persistence Zone is a zone from the profile's that is being analyzed prior plot where the market spent the longest period time. Wherever the market trades for the longest period of time tells us that there is an even number of buyers and sellers and that this area is where the fight is the greatest between the bulls and the bears.
Today the ESU13 failed to confirm an uptrend generating a sell signal, while simultaneously the bears maintained control of the market as they began selling when prices entered inside the PZ and provided the needed volume to block the bulls from taking control as well as from establishing an uptrend. The combination of both of these auction market theories occurring simultaneously creates the ability for the market to jump start and sustain bearish price movement. The PZ is identified by the two orange horizontal price lines.
This picture being painted by the Zone-Trader Philosophy on the Weekly Profile also confirmed that our current assessment on the Quarterly was correct and that we were right to assume that the price action and closing price from Tuesday's session was indeed a bull trap and allowed us to avoid getting caught in this trap and to take advantage traders that did, by pushing prices lower and taking out these trapped traders stops, again creating that domino effect and decreasing prices further.
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