Neutral zone. Neither side of the volatility was pushed below/above the R3/S3 level (purple line).

The champions of compression are the CTAs. Don’t seem to care right now.

The market has been finding support and resistance at the E-44, the S240 combined with outside the BB30, and outside both the BB240 and BB30 a little earlier before falling into the washing machine’s drum.

Here’s an opportunity to realize that the red and green volume bars are usually counterproductive churns, meaning, they make their own resistance zone, that usually triggers a larger reaction.

Where to from here? I would think an undercut of the lows could be bought at 1.0360-1.0350.

The bottom band (white line, 2.2x fluctuation maximum from the E9) would not be touched for several months in my opinion.

---

From The Art Of Raw Deal (Album #51)

Ay, amigo, the future of AI!
A shift in the direction of the air
A rapture of a buttered fly's
Left wing
The oral office remains wide open
You have some nerve with
That kind of a distribution curve

Current exchange level of the currency
A peg would surely keep it from falling
Your mouth from talking
And the portfolio from tanking
(I'm the great Cornholio!) 
Make a change
Liberate your chains
Talk to the hand
I am not your friend
(I need TP for my bunghole)
The art of the raw deal
Is to shred what is confidential
Or at least take them home with you
And only sell nuclear secrets
To the highest bidder

It does not look good for Dollar Bulls before FOMC.

High volume churn down followed by high volume churn up. They are back to back usually.

The F on top was an engagement of the upside.

A Wave 3 up was gonna come from the middle line (just below the E-9) or a deeper dip to the lower guard rail which is about 40 pips lower.

They bought last week’s pivot so far. I have 1.0374 and 1.0353 on the downside as optional buys if it would come to that. I am not saying that you would see a lower low, that is not the base case.

At the moment the bulls hold the volatility edge after a brief convergence.

The down move ended at the Fluctuation Maximum limit (another No Break Extension).

…and now a pro volume print. If that’s a profit take, well, this whole thing has gone rather neutral.

Lots of professional activity today. (Cyan volume bars). Highly doubt that this was an accumulation.

Today they bought the S1 for a new high. I got out after the gap-fill reaction, leaving 3K on the table.

The move up was a thrust, albeit a slow one, 6 hours vs the typical 2.5-3 hours.

By understanding the concept of consolidation and measuring fluctuation maximum distance, you can see how far the market can fluctuate. Within this range, no breakout occurs; hence, I sometimes call this move a No-Break Extension (NBR).

The price is reacting to the 14-week SMA. The weekly S1 is at 1.0283.

The Weekly Pivot is at 1.0393

The bear market ended when there were 3 hourly closes above R3.

The start of the bull market was 3 hourly closes below S3.

A Yellow volatility divergence normally prompts a pullback to the other end of the 30-sample BB.

F3 is approximately the same as S3.

The buy zone should be around 1.0426. The 7-sample MFI should also get down below 15.

A yellow divergence does not make for a safe top. The break out must be bought once the price has consolidated (CI>53, not far now).

The yellow divergence would have been gray if it took one more hour for the price to get back below the 8 EMO. Not enough separation is the difference.

Since they have purchased every undercut of the S2 and accumulated at S3, there is no reason to think that this behavior has changed.

---

Album #50

3 things to talk about, and they contradict each other a bit.

The first thing is the driven thrust sequence. The drive part (acceleration+ HH) was made, but the thrust is missing.

At the same time the market maker has squared the longs (red box).

So, I think the thrust would come from a lower low. In fact, I want to see two hourly fractals on the downside first. Also, the S30 should be exceeded at least.

The current pending fractal would get an override on the open merely by the expanding spread.

Now, the third interesting thing is again market maker behavior. They did not square the shorts upon the price cracking back inside the BB, which would have acknowledged a prolonged stay in the new zone above the previous high.

In the previous picture, you can see that there were more than 3 candles that formed completely outside the 30 BB. When this happens, normally there would be a crack and square upon re-entry.

Two recent examples:

X marks the crack.

The fourth thing is the F print on the upside. Volatility is still on the decline, putting the low out of reach.

We should see a reaction here, but the most severe kind would not likely get beyond the 3rd line, which is 1.0330 or so.

The 5h thing is Kissing The Ring.

The 6th thing is me writing politically charged lyrics lately for album 50, called Consilium – a sign of times.

From the European Election-Season

From far left to mid right
Torys wearing wigs
Clown carnival with an opening
For a bloodhound running 
Mate, you better be quiet from now on
Don't you be cute, I'll put you on a mute 
Put up or shut up
Choke on that pear-shaped
Cucumber sandwich
You have tried forking
But I have developed a 
Skewer skill, and I intend to stick it

From Dinsdale On The Perk

Moved by an aristocrat
You build a telescope inside
A dark-ass tunnel
To find your own living standard
You would need to probe down
Further with a periscope
Cartoon villains running
The show in this dispensable
Existence 

[Chorus]
Oil up and parch
You can already guess that
The refrain is going to be 
Oligarch

The climate has gone strange
It seems to be undergoing some 
Change
It's wild, these fires
Losing your home -
That's interesting
At least that's the official
Stand
Before the stampede shall commence 

[Chorus]
Wishing on a rainbow
You can already guess that
The refrain is going to be 
Overthrow

From Transfer Of Power

[Chorus]
Pretty big heap of it
Oh how I wish for it to burn down

Cross bun on the autobahn
It is fortified & endangered
Bone spurs don't disqualify presidents
A new Chapter from Chapelle
Flush it real good
Capital capitulation
Almost on time
Meanwhile at the Capitol
In the Capital there's almost no crime 

Pip squeak on a short fuse
On seat C-4 in the stadium 
The mood is about to explode
As the power gets transferred
From Ghengis Khan to
Kuk-Lux Khan

I have 2 recent examples for a net short market maker having to put on a hedge by traders forcing the price outside their squared longs limit.

One was at the end of a leg and yielded less, the other was at a beginning of a move with much more to be had.

Consider the following. Plot the 32 EMA in yellow, the 16 EMA in dark blue and the 30 SMA in light blue, all over median prices.

After a two-line dip put on half size for early position. The other half at the top of the last squaring.

The price has to get back above both breached lines and maintain, otherwise the attack is not working.

Aim for 16 pips beyond the squaring if the leg is coming to its end. Aim for 56, 66, 76 pips or starting the 120-sample BB if the leg just started.

First, about the blue circle. It has been puzzling from the beginning. The market maker was responsible for the gap up. But the blue thing that would be a crack and square is completely out of character for an MM, as they do lift and square when buying. The conclusion is that this was active trading, new money.

Now, with the mindset of market makers reacting and squaring, the initiating moves had to be made by non-MM players. The purple fractals seem to have one thing in common: they utilize those market maker lines that were long squaring prints (coral-colored lines) and they hold their palms out 4-12 pips lower. The traders seem to ignore the green, short squaring lines.

The other conclusion is that a top is missing. The squaring at the recent top made no impression on the pendulum, it was a divergent close to a leg. The MM stronghold would see an overrun since the oversold level was just purchased.

Particularly because of the head and shoulders looks.

If the traders are still interested, they should buy below the 1.0405 line (minus 4-12 pips zone).

The aim could be as high as 1.0528 and with the consolidation mean being moved higher a little extra on top of that.

The bottoming sequence was a W3C getting a Support beat after a new consolidation.

I often fall into the trap of faith I put in filters that are not yet settled (if there was no signal no change has transpired attitude). A Money flow overbought peak is not the end on the upside according to my thinking, and a divergence sequence must play out first.

I could not be more wrong. The market maker can use this luck-found pocket of liquidity to square holdings into, thus there would be nothing more to look for on the upside

The sane mistake others make with drawing lines thinking any crossing to be a break and they must be repellant, well I commit the sane ctime when I exclude from BB shortfalls where price has gone over the line a bit. So some extra allowance is a must. 8 pips I added.

So I have this coworker reciting mindless sentences like “structure is king”.

The problem with discressionary trading that it has no rules, and it is not replicable. I cannot write a binary code for “I don’t like this long” and which side of the bed you woke up on is not a valid premise.

I chose not to exist in a world of narratives, I don’t like having no definitions for things, I want computers to stay binary. Maybe is not an answer to any question.

Undestanding market making however could make you a king.

As for tangible advice, the market maker is now net short. Align your holdings accordingly. Use a move up to dump longs, i.e. towards 1.0430 or upon approaching the 30-sample BB.

The pause/difficulty here is the sudden overbought condition (RSI, Stoch).

At the same time, there is an hourly 200-sample new high made with an acceleration. That is not bearish, at least not in the short term, because a higher high and a thrust are missing.

A bottoming process is underway, and this is going to go back down for sure, possibly making an F3 print with a lower low.

There is a 28-hour allowance for the HH beat (expected to be 6-16 pips higher than the current one statistically).

If the HH is only made beyond 28 hours, the final thrust would only be a lower high.

I believe there will be a thrust when the MA ribbon is lower. The daily 50 EMA is likely going to be hit. 1.05 or so would make sense.

The main curve ball is the behavior lately starting 1 hour after the US close. They have been moving the market regularly, starting with the 2C low.

The least likely outcome would be a stochastic embedding (hanging out in the overbought for 3 days+) and starting to churn higher.

This is a pullback after a new high, that feels like a start of something new but barely got beyond the statistical 35-41 pips that is the highest likelihood after a Money Flow acceleration.

The downwards constraint is over with. The swing low is in. If you want to play something, play the upside.

On the recent pullback after an FF++ move (very strong, only 20 pips away from the full tilt, we are looking at a possible FF hit at 1.0486.

They purchased the Goosing level, very close to the consolidation mean which tells you they are very bullish. Also, the purple stretch (93+ pips) condition on the downside did not receive a beat.

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Some nostalgia for those used to watch the Lost.