I received two different requests for a template on an intra-day analysis based only on Nature of Trends material. I am happy to oblige but do ask you send in your requests to the blog rather than by e-mail. Also, please bear in mind that day-trading is not my preferred timeframe. I achieve my results trading off longer timeframe charts and entering intra-day.
My first question is what is the trend of the trader’s timeframe? The second question, is it likely to continue or change? My Trader’s Timeframe for day trading is usually the 5-period swing on the 80-minute. But in this case, the 80-minute is taking precedence and that shows a sideways market between 1405 and 1257 (basis June) (1397 and 1258 basis cash). As long as the market fails to accept below 1296 basis June (1295 basis cash), we can expect at least a retest of 1405 (basis June). I say this because of the market’s failure to head South after the breakdown to 1257 (basis June). This is all I see in the Trader’s Timeframe.
If I move to the next higher timeframe, the 5-day swing, I see that the make or break level is the 1405 basis cash. There is insufficient June data to assess a June level at this stage. Acceptance above 1405 (basis Cash) indicates that my idea that we are in a downtrend is probably incorrect.
My next lower timeframe after the 80-minutes is the 15-minute. This shows two equal probabilities in play.
- Basis June, a move down to the purple rectangles in Figure 2 – they show three probable target areas: 1311 to 1313; 1303 to 1306 and 1298 to 1301. The most likely is the 1303 to 1306. Acceptance below 1296would invalidate the idea we are heading for a retest of 1405.
- Basis June, the current down move is over and we’ll experience an upmove to 1359 to 1361 today.
At time of writing, the ES is at 1332.
The above answers the trend questions. The next thing I’d do is look for a zone to take my first trade. I’d also look for a zone that would negate the strategy. This I call my preliminary roadmap.
Today, my preliminary roadmap would be this:
- We closed at 1322.
- If the day session opens with at least a 5-point open gap i.e. 1327 or greater, I’d wait to see if the market closes the gap in the first hour. If it fails to do that, I’d buy the breakout of the first 60-minute range. If it does close the gap, I’d be looking at the character of the downmove to see if I can lean against 1322 close.
I hope you appreciate that by relying only on Nature of Trend material (i.e. leaving out the Ray Wave and especially the Market Profile), I am flying half blind. The Market Profile provides information for day traders unavailable from any other discipline.
I attach two charts:
- The 80-minute ES (day session only) and
- The 15-minute ES (day session only)
Figure 1 The 80-minute ES
Figure 2 The 15-minute ES