The closing bell has rang and here goes one million bucks new add to the VWAP rule. As I have said in my previous post, equal $tick highs do signify no continuing momentum after VWAP breakout. Equal highs means the difference between previous $tick maximum level during the session (lower high) does not exceed 15-20 points w/ new $tick high (higher high) posted while the market was breaching VWAP level.
But now it appears, that equal $tick highs do not necessarily signify bulls coming superiority, as it was considered before. Indeed, while equal $tick highs were posted, the market is likely to breakout VWAP to an upside ones before the session finish. Still, there is possibility of no bulls win. And vice versa.
That conclusion is based on the second out of two trades I made during the past tuesday session. The first position was hugely based on false VWAP breakout. According to VWAP rule that was obvious, cause there was no new session $tick low during the market VWAP breach.
As u can see on the chart below there was fresh session $tick low - minus 1126. But it was posted when SPX was only close to touch VWAP. And when the market slided below VWAP there was no new $tick low - only minus 1091.
It means there was kind of equal $tick lows under VWAP rule. In fact, the spread here is 35. But here goes some discount, cause both $ticks were placed over 5 minutes distance.
And the reason of the second trade was expectation of bears coming superiority and VWAP downside breakout, respectively. That anticipation was based exactly on previous equal $tick lows from the VWAP rule pattern, I have said before. I thought, that such kind of the pattern is a nice forerunner of coming downside leg. I have entered short position, but the market continued to climb higher.
All at all, have to say, that during the last 10 minutes of the session the market have slided sharply and during afterhours finally there was downside VWAP breakout.
But now it appears, that equal $tick highs do not necessarily signify bulls coming superiority, as it was considered before. Indeed, while equal $tick highs were posted, the market is likely to breakout VWAP to an upside ones before the session finish. Still, there is possibility of no bulls win. And vice versa.
That conclusion is based on the second out of two trades I made during the past tuesday session. The first position was hugely based on false VWAP breakout. According to VWAP rule that was obvious, cause there was no new session $tick low during the market VWAP breach.
As u can see on the chart below there was fresh session $tick low - minus 1126. But it was posted when SPX was only close to touch VWAP. And when the market slided below VWAP there was no new $tick low - only minus 1091.
It means there was kind of equal $tick lows under VWAP rule. In fact, the spread here is 35. But here goes some discount, cause both $ticks were placed over 5 minutes distance.
And the reason of the second trade was expectation of bears coming superiority and VWAP downside breakout, respectively. That anticipation was based exactly on previous equal $tick lows from the VWAP rule pattern, I have said before. I thought, that such kind of the pattern is a nice forerunner of coming downside leg. I have entered short position, but the market continued to climb higher.
All at all, have to say, that during the last 10 minutes of the session the market have slided sharply and during afterhours finally there was downside VWAP breakout.
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