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113-ICT Mentorship Core Content - Month 12 - Intermediate Term Top Down Analysis

Last modified by Drunk Monkey on 2022-10-29 06:36
1 00:00:16,650 --> 00:00:27,750 ICT: Hey folks, welcome back miss a second fourth teachings in a final delivery month of our mentorship. This teaching is ICT intermediate term top down
2 00:00:27,750 --> 00:00:30,510 analysis weekly to daily.
3 00:00:36,870 --> 00:00:48,450 Okay, again, like on the previous monthly to weekly presentation, what I'm doing is I'm giving you my personal approach, this is how I do it. And again, this is
4 00:00:48,450 --> 00:00:59,370 a model. But this is how I go through the process of taking the information I've gleaned from the monthly chart and transposing it to the weekly. Now weekly,
5 00:00:59,700 --> 00:01:12,450 information I give you here will be transposed to the daily. Now, most of this is going to be basically verbatim what we saw on the monthly chart, which is the
6 00:01:12,450 --> 00:01:25,290 reason why I've tell you, we went through 11 and a half months of content. That seems like an amazing Olympic feat to do. But you have all this information, but
7 00:01:25,380 --> 00:01:32,040 you haven't had any idea what to do with it specifically in an order. And I told you from the beginning, once you get to this month, you'll see just how easy it
8 00:01:32,040 --> 00:01:41,640 is to use the information and it doesn't take a lot of time. What element of time that is required is you're getting used to doing it. So that way you
9 00:01:41,640 --> 00:01:51,270 understand what you're looking for. And it makes your analysis quicker now doesn't mean shortcuts are the way to profits doesn't mean you have rear end
10 00:01:51,300 --> 00:01:59,940 approaches, if you will like my grandpa, he's telling me Don't don't half ass anything. If you do a half assed attempt at your analysis, well, don't be
11 00:01:59,940 --> 00:02:07,740 surprised if you get lackluster results. But once you understand what it is specifically you're doing and how you're breaking the market down. It does not
12 00:02:07,740 --> 00:02:16,710 take long folks, it does not take long, I'm actually going to spend more time talking in describing what it is you have to do than if you just did it. So the
13 00:02:16,710 --> 00:02:24,330 focus of this presentation much like on the monthly to weekly is we're going to determine the impact of the weekly perspective on any asset or market. We're
14 00:02:24,330 --> 00:02:33,840 going to identify the directional bias for the higher timeframe weekly chart. We're going to classify the PD arrays accurately to assist in key levels, and
15 00:02:33,840 --> 00:02:36,960 read complete and institutional analysis on a weekly basis.
16 00:02:42,270 --> 00:02:52,290 Okay, folks, the first thing I start with when I'm doing a new week is I start with relative strength. Now the reason why I start with relative strength is I
17 00:02:52,290 --> 00:03:03,210 may not have a clear picture from the monthly. And to avoid any needless frustration. If the monthly charts don't really speak well to me, then I just go
18 00:03:03,210 --> 00:03:13,320 through the process of doing the relative strength analysis on the assets and the specific currencies or stocks or futures markets, I'm looking to trade.
19 00:03:17,820 --> 00:03:26,850 After I do my relative strength analysis, I go into the commitment of traders. And what I'll do is I'll go through all the currencies and commodities. And I'll
20 00:03:26,850 --> 00:03:37,920 look for extremes in the readings of the commercials. And I'll give you the specifics when we get to the breakdown on what is I'm looking for. But it goes
21 00:03:37,920 --> 00:03:49,440 from relative strength analysis. And then once I have what I believe is the EU leaders or my watch list, if you will, from my relative strength analysis. And
22 00:03:49,440 --> 00:03:59,070 hopefully the trades that I find on the monthly chart, like we did with the Australian dollar in the previous teaching with the monthly to weekly. Hopefully
23 00:03:59,070 --> 00:04:07,200 that Australian Dollar makes the cut for the relative strength analysis. And we'll take a look at that as our continuing example. But then we go into
24 00:04:07,200 --> 00:04:14,490 commitment as traders and and I like to look for what the commercials are doing. I'm gonna get a read on what those heart those hedgers are doing, because
25 00:04:14,490 --> 00:04:22,680 they're well informed and they usually make the tops and bottoms in the marketplace. So if we can get their readings in extreme bases, then we can try
26 00:04:22,680 --> 00:04:35,640 to trade in the middle where the majority of the move is made. After that, I do a market sentiment analysis. And I go through a couple of different things that
27 00:04:35,640 --> 00:04:45,240 arrive at market sentiment and I'll share that with you in this teaching as well. Once I arrive at a market sentiment, opinion, then I start breaking the
28 00:04:45,240 --> 00:04:53,100 market down in a technical fashion like we did with the monthly so there's a couple of things missing here that we saw on the monthly that is not in the
29 00:04:53,100 --> 00:05:05,970 weekly portion. We had three different and things that started off the monthly news, we have three different things before the weekly here. So I want to get
30 00:05:05,970 --> 00:05:16,890 down to a weekly chart, we're starting to look at more of opinions of others versus just technicals. and weigh them against the technical strength and
31 00:05:16,890 --> 00:05:29,040 weakness by way of the relative strength analysis. Once we arrive at our watch list, and we determine which markets are fueled by commercial hedging, and then
32 00:05:29,040 --> 00:05:36,930 we also blend in market sentiment ideas with everyone else in the retail world is thinking. Because ideally, you want to be diametrically opposed to that in an
33 00:05:36,930 --> 00:05:45,810 alignment with what smart money is doing. So market profile is the next thing I look at. And I start breaking down what the weekly looks like in terms of market
34 00:05:45,810 --> 00:05:54,870 profiling, is it in consolidation? Is it in a trending environment? Those types of things and just like we did with the monthly, the same thing applies here on
35 00:05:54,870 --> 00:06:06,870 the weekly. Okay, after I do market profiling, I look at Inter market analysis on a weekly basis. So I start comparing what the weekly charts look like in
36 00:06:06,870 --> 00:06:21,900 other correlated markets. And I compare likes and price action with positive and negatively correlated assets in markets with the market I'm looking to trade. So
37 00:06:21,900 --> 00:06:33,300 in other words, an example I could be looking at, you know, the dollar versus the Kiwi on a weekly basis and seeing if there's inter market analysis
38 00:06:33,300 --> 00:06:43,320 supporting an idea I may have for the dollar or for the kiwi. After that, I start looking at market structure. And at this point, I want to start blending
39 00:06:43,320 --> 00:06:52,410 and incorporating institutional order flow. institutional order flow, I want to be looking for down close candles supporting price, and up close candles being
40 00:06:52,410 --> 00:07:01,800 broken in up moves, or bullish market structure. And I want to see up close candles resisting price and down close candles breaking as market structure is
41 00:07:01,800 --> 00:07:10,560 indicating lower prices. So everything we mentioned in previous about the monthly applies, but now we're gonna start looking heavily for institutional
42 00:07:10,560 --> 00:07:14,610 sponsorship in by studying the order flow.
43 00:07:21,450 --> 00:07:33,900 Next is I break down the pdra matrix on a weekly and I'll do the same thing I saw on the monthly charts on the weekly as well. So everything that I would
44 00:07:33,900 --> 00:07:43,020 break down in terms of the range that's defined by now the weekly chart, any pdra that didn't exist in the monthly may now materialize in the weekly chart,
45 00:07:43,020 --> 00:07:55,410 because you're gonna get much more definition, because you going into a lower timeframe. And after that, by having the weekly pdra Matrix defined both premium
46 00:07:55,410 --> 00:08:02,220 and discount arrays, then I can start working towards calibrating my key price levels for support and resistance or buying sell areas.
47 00:08:07,860 --> 00:08:18,690 And then as a result, I come to a weekly bias and it's defined in such a way where now I can take that information and transpose that to the daily chart.
48 00:08:23,700 --> 00:08:32,790 So in greater detail, what I begin with when I start my intermediate term analysis, I start with relative strength. So if the monthly analysis is not as
49 00:08:32,790 --> 00:08:41,310 helpful as I hope and or it's not clear to me, you know, I begin my weekly analysis with relative strength analysis across all asset classes. That means
50 00:08:41,640 --> 00:08:49,260 for commodities, currencies and stocks that determine what markets lead in strength by failing to make lower lows and lead in weakness by failing to make
51 00:08:49,260 --> 00:08:58,980 higher highs. I look for stocks in the top 30 industry groups for strong stocks ranked by Investor's Business Daily or IBD. And I'm going to actually do a
52 00:08:58,980 --> 00:09:09,240 separate individual teaching as a topical study so that way you'll see how I go through and sort with IVDs resources so you can see me do it and do the same
53 00:09:09,240 --> 00:09:17,400 thing when you look for stocks as well. I look for Long's and commodities that lead their respective Futures Group with higher lows relative to the others. In
54 00:09:17,400 --> 00:09:26,700 other words, in the grains I want to find a market that doesn't make a lower low when all the grains should be bullish in dollars week. I look for Long's and
55 00:09:26,700 --> 00:09:37,140 currencies that fail to make lower lows relative to the other currencies. When the dollar index is weak. I look for leadership and laggards. So I want to know
56 00:09:37,140 --> 00:09:47,490 what the strongest is and the weakest when I'm doing my relative strength analysis concepts. Next thing I go into commitment to traders and I want to know
57 00:09:47,490 --> 00:09:56,340 what the commercial hedgers are dealing because the commercials they hedge in such a large degree of buying and selling, they themselves end up creating the
58 00:09:56,340 --> 00:10:06,240 highs and the lows or tops and the bottoms in the marketplace. Now If you know what they're most likely doing in terms of a high or low, then you know you got
59 00:10:06,240 --> 00:10:17,010 a long period of meat in the middle type move, or range expansion, that's directionally bias. So by having this expectation about what the commercials
60 00:10:17,010 --> 00:10:25,560 have already done in the marketplace, they're going to be diametrically opposed to what the large funds are doing. And since we really want to be using the
61 00:10:25,560 --> 00:10:33,840 commercials to give us the, the high in the low end of the range based on their extremes, we trade with the direction of the large funds in between the middle
62 00:10:33,840 --> 00:10:41,400 because you'll see they're diametrically opposed. So that the highs and the lows are tops and bottoms. The commercials are always right. In between those two
63 00:10:41,400 --> 00:10:48,000 price points, the large funds are accurate. They're right. That's why large funds continuously make a lot of money. But at the extremes, they always get
64 00:10:48,000 --> 00:10:55,920 their ass handed to them. So we want to know when the hedgers are calling for a potential high or potential low. And we work within the middle, I look for the
65 00:10:55,920 --> 00:11:06,570 commercials to be at a 12 month or six month extreme in net holdings. I also like to sort markets that are at two year and four year extremes. Now using my
66 00:11:06,570 --> 00:11:15,090 proprietary co2 hedging program concept, I look for signs that commercials are buying or selling in market. Now you're going to go back and look at those
67 00:11:15,210 --> 00:11:26,490 teachings. It relates to that I'm not going to teach it again here. But I like to look for when the commercials are buying when it doesn't appear. It's obvious
68 00:11:26,490 --> 00:11:34,530 like when we look at the zero line on the net traded position chart that everyone looks at, if it's above the zero line, they think they're buying. Well,
69 00:11:34,560 --> 00:11:44,490 they are but they could also be selling inside that that range also, but you have to look at the 12 month extreme time low rating. And dividing that in half,
70 00:11:44,520 --> 00:11:51,330 you can actually get a better read on what their hedging program is. And also like the sort companies that have extremely large net holding, compared to the
71 00:11:51,330 --> 00:12:01,290 futures groups or they're part of for instance, look at the grains again, if there's a huge astronomical amount of net long positions in the soybean market,
72 00:12:01,620 --> 00:12:08,550 versus then that of all the other grain markets generally that's going to be an indicative of them seeing a big move as well.
73 00:12:17,640 --> 00:12:27,450 All right, market sentiment reading. I use headlines from financial publications like Investor's Business Daily, Barron's Wall Street Journal, Bloomberg, and I
74 00:12:27,450 --> 00:12:36,900 like to feed the big story. Now the news isn't always going to be marked to market the very day it comes out. Sometimes it can. But generally when I like I
75 00:12:36,900 --> 00:12:47,100 like to see storyline start building in a consensus or a sentiment idea about doom and gloom or everything's great. It's the best bull market ever seen. And
76 00:12:47,100 --> 00:12:58,410 it's on fire. There's, I like to use headlines or stories to have real big descriptive adjectives, something that gets things emotionally charged, okay,
77 00:12:58,680 --> 00:13:09,090 the more emotionally charged or descriptive they are in, the more that they occur. Generally, that builds in a sense of an idea. And I haunt forums for
78 00:13:09,090 --> 00:13:20,040 retail thinking and to further build my sentiment opinion. So I go to all the well known forums online. And if I want to do like a trade in the cable, I'll go
79 00:13:20,040 --> 00:13:28,320 and look at what all the retail minded individuals are going to do there. It's uncanny, uncanny when the technicals are in line like I teach it, and in the
80 00:13:28,320 --> 00:13:36,750 sentiment idea, they're saying the 1% opposite of what we expect to see in price. It's unbelievable how it's it's like diametrically opposed. And as a
81 00:13:36,750 --> 00:13:46,170 technical market sentiment reading, I use it Williams percent are indicator. And yes, I said the word indicator, I use a percent are on a weekly chart in periods
82 00:13:46,200 --> 00:13:56,490 of 2014, period and 10. Now they're not all three applied. Okay, there's the three settings that I like to use. And what I do is I look for which one is the
83 00:13:56,490 --> 00:14:05,310 most accurately depicting or overlaps with the previous important highs and lows. That's done in the past. Nothing's going to be perfect. Okay, but I like
84 00:14:05,310 --> 00:14:13,530 to have a technical sentiment indicator in concert with what I'm seeing in the forms for retail thinking and what I'm seeing in the storylines in the
85 00:14:13,530 --> 00:14:27,210 newspapers or the articles or whatever I see on CNBC. So when all three of these things come together that builds my sentiment. And what profile is marketing?
86 00:14:27,330 --> 00:14:34,890 Much like we did with the monthly chart on this breeze right through it, because it's very, it's basically the verbatim is the market under consolidation? If
87 00:14:34,890 --> 00:14:44,820 it's yes, and expenses are likely to show evidence prior to a breakout, we can start seeing things that lead well to a directional bias that will move outside
88 00:14:44,820 --> 00:14:53,400 that consolidation because we want to know what the next moves gonna be. If it's not in consolidation, that trend might be reaching extreme and if it is, it may
89 00:14:53,400 --> 00:15:03,120 be a retracement not only a reversal, but I always like to see retracement first as my first choice. And it's the market under study trending. And if it is
90 00:15:03,120 --> 00:15:12,180 trending you I'm always going to be citing or looking for continuation trades to avoid the top and pick top and bottom picking. And if it's not trending I look
91 00:15:12,180 --> 00:15:21,270 for signs to support a directional breakout Matson consolidation. I use inter market analysis to do that. And is the market under a retracement? And these are
92 00:15:21,270 --> 00:15:28,830 this is the third question I asked myself. And if it's under retracement then I look for signs for continuation of the trade post retracement and think about
93 00:15:28,830 --> 00:15:35,100 what I showed you in the monthly teaching as the monthly chart was retracing. For the Australian dollar it retraced down into a bullish order block on a
94 00:15:35,100 --> 00:15:43,860 monthly basis. And that would be an ideal scenario for us to go long. But if it's not retracing, then I have to determine if it's consolidation or trending.
95 00:15:43,890 --> 00:15:52,230 And I use the above ideas to get more information. And that's what I do for market profiling on the weekly chart just like I did on the monthly. And
96 00:15:52,230 --> 00:16:02,340 everything that we saw on the monthly for inter market analysis, it's done here as well. If I have a bullish market structure, determined in my market of
97 00:16:02,340 --> 00:16:12,120 interest, if I look for inter market analysis to support the idea of positively correlated markets and opposed to it in negatively correlated markets, example
98 00:16:12,150 --> 00:16:20,760 bullet bullish pound, I'd like to see a weak US dollar technically and if it's a bearish market structure determined in my market of interest, I look for inter
99 00:16:20,760 --> 00:16:29,190 market analysis support the idea in positively correlated markets and opposed to it in negatively correlated markets, for example, be bearish, US dollar and
100 00:16:29,190 --> 00:16:39,630 strong Euro dollar technically. And after that, go into market structure. And again, I want to start incorporating institutional order flow here, looking for
101 00:16:40,500 --> 00:16:52,200 premium arrays breaking in bullish markets and discount rates supporting price and reverses when it's bearish. I want to see premium arrays resisting price and
102 00:16:52,200 --> 00:17:00,060 discount arrays breaking down and not providing any kind of support that goes in concert with normal market structure as outlined here. So I'm going to be
103 00:17:00,060 --> 00:17:09,210 defining the current market structure on a weekly basis current market structure, I look to classify every high low relative to SMT ideas, you
104 00:17:09,720 --> 00:17:18,630 comparing it to dollar or correlated pair SMT no words euro to cable, or euro to dollar
105 00:17:19,440 --> 00:17:29,010 to have USD X SMT and correlated pair SMT. On the weekly I start using it there. And like on the monthly I compare the relationship with the highs to recent
106 00:17:29,010 --> 00:17:36,930 highs to determine if that long, immediate or short term high is in control of price presently. And like on the monthly I compare the relationship to the lows
107 00:17:36,960 --> 00:17:44,970 to recent lows to determine if a low is a long term, intermediate term or short term low. And if it's in control of price, presently trade selected in the
108 00:17:44,970 --> 00:17:55,830 direction of the current market structure and monthly directional bias are going to be favored in my analysis. And obviously, like we did on the monthly, I'm
109 00:17:55,830 --> 00:18:03,690 going to be locating institutional focus points. Once I arrive at a portion of price action I wish to analyze, I break down the selected price range into
110 00:18:03,690 --> 00:18:12,060 premium and discount. Not every price range will have every possible premium and or discount array. I'm going to just note the ones that are obvious in the
111 00:18:12,060 --> 00:18:21,690 weekly range. And both premium and discount arrays are going to be identified. And I will look to build potential trade ideas based on PD arrays and referring
112 00:18:21,690 --> 00:18:33,690 to all previous analysis points just mentioned in this weekly to daily presentation. I'm going to be noting the key price levels relative to the
113 00:18:33,690 --> 00:18:42,330 premium and discount arrays on the weekly and wants to determine the portions of the market structure I want to use for my trade ideas. Like on the monthly I
114 00:18:42,330 --> 00:18:52,140 round each PD array to the nearest 10 level or five level and premium arrays above the market price are calibrated and rounded down to the nearest adjusted
115 00:18:52,140 --> 00:19:04,470 number. And discounted rates below the market price are calibrated and rounded up to the nearest adjusted number, either five or 10 level. And we end with a
116 00:19:04,470 --> 00:19:14,640 weekly bias. So after I refer to relative strength for leaders and laggards, I go into Commitment of Traders, I look for the buying and selling based on their
117 00:19:14,640 --> 00:19:24,090 standard zero line, are they above or below the zero line. And then I break it down into my hedging program concept where we can look at the last 12 months and
118 00:19:24,090 --> 00:19:33,240 look at the highest high and the lowest low of just their net holdings and disregard the zero line everybody else uses for net traded position graphs and
119 00:19:33,480 --> 00:19:41,370 split that in half and above it we'll be buying and billowing we'll be selling and I again, I've done a teaching about that. And you guys can refer back to
120 00:19:41,370 --> 00:19:48,150 that as well. If you have any more questions about after we get through this month's content, obviously we have plenty of time to go over that, that have
121 00:19:48,150 --> 00:19:58,560 determined the market sentiment based on there's three principal approaches and then I confirm my analysis with market correlation. So either USD X SMT or
122 00:19:59,010 --> 00:20:08,370 quarterly appear SMT And, or, like for instance, like dollar two commodities, dollar going down, income is going higher. Those types of things, I'm looking
123 00:20:08,370 --> 00:20:17,310 for that to occur on the weekly chart. And I select a portion of Market structure to frame a trade within. And then I defined a PD arrays to arrive at
124 00:20:17,310 --> 00:20:28,710 key levels within that range on a weekly chart. And by that time, I will have arrived at a directional based analysis and the weekly timeframe that gets
125 00:20:28,710 --> 00:20:37,830 transposed over to the daily. So what we're gonna do now is want to return back to our Aussie dollar example and break that down all the things we've done here,
126 00:20:38,190 --> 00:20:48,870 we're going to apply it to that weekly to daily principle. Okay, we're back on our Aussie dollars as a monthly and all I did was change some colors that keep
127 00:20:48,870 --> 00:21:01,290 it in better clarity, we have a rejection blocker here, and our old high knitted here as premium raise. This was our range defined by our low and our high and
128 00:21:01,290 --> 00:21:10,110 this was the discount rate it was the nearest below price action as we started June or shorter block, that mean threshold would be in here as well on this
129 00:21:10,110 --> 00:21:18,780 contract to keep it clean. And then we had the rejection block lowest close and then we have the low itself that would be identified and liquidity pool below
130 00:21:18,780 --> 00:21:35,220 it. So on the upside we had one to premium array and then we had another that will add here which is the old high here. And then there'll be another one
131 00:21:35,220 --> 00:21:50,430 should this one break the next PD array on a premium premium basis would be up here the last up close candle which will be a bullish or bought one monthly
132 00:21:50,430 --> 00:21:59,850 standpoint. And again, we're getting a little rich with the objectives in terms of premium now, but I just want to show you how you would just keep walking out
133 00:21:59,850 --> 00:22:18,180 with this and then we have somewhat of a fair value gap in here as well. So we can identify that to add that to this high here. So there's all of our premium
134 00:22:18,180 --> 00:22:18,690 arrays
135 00:22:20,670 --> 00:22:30,750 one the Australian monthly okay. So, now once we have all this now, once this range has been broken to from this low to this high, so now this range is no
136 00:22:30,750 --> 00:22:42,270 longer valid, okay. So, now we had price trade outside for external liquidity, external range liquidity and now the next range high would be up here. So, if
137 00:22:42,270 --> 00:22:53,130 this high was to be broken, then we would start looking for fair of a gap to define the range and then bullish order block and you would just keep expanding
138 00:22:53,130 --> 00:23:05,490 that up okay. And should this bullish or bucket way, we will be looking for this all this downside delivery on price to be rebalanced. But that's so far away and
139 00:23:05,490 --> 00:23:13,020 not germane to the discussion in a moment. But that's how we would do it. So now we're going to drop down into and again, this line here just delineates the
140 00:23:14,130 --> 00:23:27,870 beginning of May, in on the monthly chart. So now we had to adjust it to June, because we're gonna jump down to a weekly and we want to see all the relative
141 00:23:27,900 --> 00:23:38,880 price action. So now we have everything that was on the monthly, transposed to the weekly chart. So now we have all of our premium or a discount eraser I find
142 00:23:38,880 --> 00:23:50,790 here. And again, our initial range was defined by this high this low, once this high, was formed here, this range is no longer valid, but we do refer back to it
143 00:23:50,790 --> 00:24:02,820 as a discount array because it's below price. So we would come back down to this potentially as a support level. But we would look to justify why price may still
144 00:24:02,820 --> 00:24:20,610 reach up into the 80 threes, okay, one or 8290s from a monthly premium array basis. But I want you to take a look at how the price levels from the monthly
145 00:24:20,700 --> 00:24:34,380 are going to be used in the weekly once we go through relative strength, we were looking at the lows in here relative to the Australian dollar. And we're going
146 00:24:34,380 --> 00:24:46,770 to take a look at the dollar index the same time and we can see there was really no disparity amongst the two markets, Ozzy was calling for higher whereas the
147 00:24:46,770 --> 00:25:00,120 dollar was looking weak as well to UFC lower prices. So from a relative strength standpoint, no disparity in here. So everything is confirming it. So we have A
148 00:25:00,510 --> 00:25:10,410 weakness in the dollar is expected and strength in Ozzy. Okay, so we didn't see any cracking correlation there. So everything looks healthy for this move to
149 00:25:10,410 --> 00:25:21,030 transpire with the seasonal tendency for June to be higher, we get the higher move off of the bullish order block. Okay, from a monthly standpoint, which is
150 00:25:21,030 --> 00:25:32,700 what this level is, here's the monthly bullish order block. But notice also that price inside this range private move out right here, this low to high let's look
151 00:25:32,700 --> 00:25:45,540 at this whole entire range a little bit more detail. We have this candle here, where once it took off about this short term high on this candle, so above
152 00:25:45,600 --> 00:25:59,100 973 57, only by side deliveries offered until it came back down and rebalanced. The high on this candle comes in at 7357. The low on this candle comes in at
153 00:25:59,160 --> 00:26:10,710 7329. So more than comes down and rebalances that. So we have a rebalance point, we can take this order block now and refine it down to this level here get a
154 00:26:10,710 --> 00:26:20,880 little bit more detail in terms of where the low may form in this retracement that we saw on a monthly. So we have a more refined pdra for a discount. But
155 00:26:20,880 --> 00:26:34,260 this level here. And if we look at these two candles here, which makes a weekly bullish order block all these things help us align ourselves with a much more
156 00:26:35,250 --> 00:26:45,630 refined and calibrated level. We have equilibrium in here. So price, we don't want to see it go down to that level where through it. I shouldn't say shouldn't
157 00:26:45,660 --> 00:26:54,540 it can go down to it, but we just don't want to see it, violate it. And that's that level there. And we'll get rid of this now. So now we have a little bit
158 00:26:54,540 --> 00:27:04,890 more detail in terms of our discount arrays, price trades down, find support at the bullish order block and fair value gap on weekly. And price now trades
159 00:27:04,890 --> 00:27:15,390 through this up close candle, I'm sorry, this down close candle is violated with an up close candle. So this becomes a bullish order block. So we can anticipate
160 00:27:15,390 --> 00:27:22,440 price returning back to this. So we're incorporating
161 00:27:25,410 --> 00:27:36,690 institutional order flow in here beautiful delivery of price there. With this low body, this candle is opening and runs away and reaches for the buyside
162 00:27:36,690 --> 00:27:45,870 liquidity resting above equal highs and above the range, which is what these levels are here for the monthly. And also we're starting to see support come in
163 00:27:46,260 --> 00:28:06,180 with the down close candles in here. Okay, the bodies, the open on this candle is 7557 draw that out in time to closes 7571 to open on this candle is 7568 this
164 00:28:06,180 --> 00:28:15,810 down close candle becomes a bullish order block when this candle trades through it, we find retreated back down into it here. Price then runs away creates the
165 00:28:15,810 --> 00:28:27,000 run or for lower resistance liquidity run resting above these equal highs. Okay, so we can see the element of institutional order flow seen in the weekly chart
166 00:28:27,000 --> 00:28:39,240 now supporting price moving higher. Okay, we're looking at the commitment chairs report. And this is the Australian dollar. And I've already done the hedging
167 00:28:39,240 --> 00:28:49,260 program concept. It's unique to me, you can see the actual real institutional buying and selling when you do this. And what I did was I highlighted the
168 00:28:49,260 --> 00:28:59,850 beginning of June, you would have done this, okay. And it's hard to see with this, but it's the red line. Okay, here's red line all up here and it stairsteps
169 00:28:59,850 --> 00:29:11,400 down, goes to here it goes back up goes down, goes back up, down, stays down here and it goes back up for a period of time then it drops down again. Okay.
170 00:29:12,600 --> 00:29:24,210 What I did was at June, I went back 12 months to the previous year's June which is this line right here. Okay, and that was the highest reading since that time
171 00:29:24,600 --> 00:29:35,670 to June 2017. And I look for the lowest low Okay, and I just used this reading down here went back to the main just to make sure I got a good range to work
172 00:29:35,670 --> 00:29:47,520 within and that split that range in half, the high and the low and this is the midway point. So it becomes basically this zero line that's normally on a net
173 00:29:47,520 --> 00:30:01,530 trader position chart. I use the 12 month range and 12 month range. If you split it in half the highest and the lowest and divide it in half. You get the The ebb
174 00:30:01,530 --> 00:30:11,820 and flow type thing. Okay. And when I started doing this for commodities and looking at futures contracts and such, especially with currencies, it became
175 00:30:11,850 --> 00:30:21,930 like a huge light bulb you can't eat they can't hide from you anymore. See, I think they started messing with data, the screw up the, the presentation of the
176 00:30:21,930 --> 00:30:38,010 CRT, net position charts. And by having that like this it gives us an X I think it just took away some of the the green didn't I don't think it did. Anyway,
177 00:30:38,010 --> 00:30:46,650 this should go a little bit higher than that this should all be green in here. And I'll show you what I how I did it in a second. But the main point is in June
178 00:30:46,680 --> 00:30:56,460 right here, you can see that they were above the modified ICT hedging program concept we can see when they're hedging and buying and selling. So just real
179 00:30:56,460 --> 00:31:07,590 quick look, you can see during the buy time here, they bought the low here. And during this red time here, they sold down went long in here, we had that rally
180 00:31:07,590 --> 00:31:18,090 up and we had this selling here where they sold into the rally, then he bought it back in here at this low. They sold it again in here which is that decline.
181 00:31:18,390 --> 00:31:31,230 And they bought it up again here, which is this buy right here in June and they are Serrana. So we had in our weekly to daily procedure, we look for see the the
182 00:31:31,230 --> 00:31:42,930 seasonal influence for bullishness in June. To come into Australian dollar. We did a relative strength studies, we did see a SMP divergence on Aussie $2,
183 00:31:42,960 --> 00:31:52,290 Aussie was failing to make a lower low when the dollar index made a higher high. And that was in place that was working. So the commitment of traders report and
184 00:31:52,290 --> 00:32:02,940 graph. As we'll show the I'll show you the original one. And contrast that what you're seeing here. But co2 data and ICT hedging program. Again, you can't find
185 00:32:02,940 --> 00:32:11,010 this anywhere else, folks, you learned it here. So looking at this information it gives us when the commercial is really buying and when they're really
186 00:32:11,010 --> 00:32:22,980 selling, okay, and it is not always indicative of what you would normally see in a standard CRT graph. So we can see the real institutional hedging right in here
187 00:32:22,980 --> 00:32:25,380 what they're buying right at the low. Okay,
188 00:32:25,710 --> 00:32:35,160 there's also a happens right when they close in the gap. So the only the bias I deliver here to this candles high, right down to it right there, boom hits,
189 00:32:35,220 --> 00:32:43,800 okay, and in rallies away, all overlapping with them being net long, notice that they aren't really net long until we get above zero, if you look at the way
190 00:32:43,800 --> 00:32:53,490 everyone else looks at the modestly bullish there doesn't have to be viewed like that, we can see this is actually a big massive increase of buying. Whereas if
191 00:32:53,490 --> 00:33:03,510 you can see when they come down and close that gap, they were much longer using my way of using co2 data than that of this standard cu T graph, which we'll look
192 00:33:03,510 --> 00:33:16,050 at a moment now. So let's close this here and see what looks like in paint. And all I did was did a right click on bar chart chart once I applied a weekly
193 00:33:16,050 --> 00:33:28,410 contract, and put the CU T data on a large presentation. Okay, and I'll show you what that looks like when we go to bar chart.com. And what we do is I'm going to
194 00:33:28,410 --> 00:33:44,280 take all this off. And you can see without it all in there, it's not as apparent. Without the information, it's just looks like a bunch of squiggly
195 00:33:44,280 --> 00:33:53,790 lines. Okay, and yeah, you can see, they just modestly went above the zero line right here. But many times you're gonna find that using my way of interpreting
196 00:33:53,790 --> 00:34:06,450 co2 data, there'll be below the zero line, but it still gives you a huge massive influx of buying. Okay, and let's go over to bar chart dot coms actual chart
197 00:34:06,480 --> 00:34:15,780 without the line and about me giving you the 12 month perspective. Okay. And you can see very modest little buy above the zero line. But when you look at it, in
198 00:34:15,780 --> 00:34:24,030 contrast to how I showed it, it's a much more massive buying they did there and look at the reaction in price. That's inner circle trader stuff right there.
199 00:34:24,150 --> 00:34:35,610 Okay, that's worth the price of admission alone. So you can see how they remained below the zero line down here. Okay, for the most part, but every time
200 00:34:35,730 --> 00:34:44,340 it rallied, okay. Why did they buy up here when they're still below zero line? That is one of the things that plagued me as a trader like co2 data stuff didn't
201 00:34:44,340 --> 00:34:51,600 work. I was doing it wrong, because I was doing exactly what the book said. So I've changed it and throughout what Larry Williams said about, just look for
202 00:34:51,600 --> 00:35:00,840 this and look for that now. I looked at if they're hedging, they should be doing things from a seasonal standpoint, and I found it in the grain Mart. Okay, and
203 00:35:01,080 --> 00:35:07,710 by doing it like that seen as cyclically happening, as like, why don't we try to apply it to the currencies? Well, currencies are cyclical, just like anything
204 00:35:07,710 --> 00:35:15,150 else. Because it's because of monetary policy, because of global commerce, all those types of things. I mean, think about it. There's holidays around the world
205 00:35:15,150 --> 00:35:24,570 that happen every single calendar year, single, every single calendar date that they're supposed to happen on you, everybody has some kind of a new year type
206 00:35:24,570 --> 00:35:33,060 celebration, you'll think as people spending money? Of course they are. So if we look at these cyclical things, then why wouldn't there be cyclical things in the
207 00:35:33,060 --> 00:35:40,980 technicals with the commercials. So I think that's what's happened. They've skewed this data to kind of screw it up. And because it's law CFTC requires them
208 00:35:40,980 --> 00:35:48,810 to report this information, which I'm so thankful for. It gives us a greater insight about what's going on. And yes, you can see a net long position that's
209 00:35:48,840 --> 00:35:57,120 really, really wimpy right above here. But if you look at the readings of the low in, this is towards the high end of the range. So this is a massive buy. And
210 00:35:57,120 --> 00:36:05,490 that's where you get that big explosive price move right there. Very, very indicative of Smart Money accumulation. So then we have ideas about going
211 00:36:05,490 --> 00:36:18,840 through headlines, and using major publications and such and here's Bloomberg, and this was on May 15 2017. The Australian dollars outlook darkens. Okay, does
212 00:36:18,840 --> 00:36:29,280 that sound like it's bullish or bearish? Obviously, it's indicating that they think it's gone down hard. Now, in fairness, this is about midpoint of may. But
213 00:36:29,310 --> 00:36:37,470 this is when I want to start seeing I want to see the storyline start building these ideas about how Oh, it's doom and gloom, or it's peaches and cream, it's
214 00:36:37,470 --> 00:36:46,800 wonderful ticker tape parade, you know, exasperation, you know, everything's great, or everything's terrible, you know, when they start line start getting so
215 00:36:46,800 --> 00:36:54,930 heavily slanted on one side or the other, good or bad. It begins it begins to build in sentiment ideas, okay, and sentiment is a really strong element to
216 00:36:54,930 --> 00:37:04,350 technicals when you work with them. In diametrically opposed conditional words if market sentiment and like this is bearish, in other words, we would interpret
217 00:37:04,350 --> 00:37:10,770 this as bearish. So retail traders see this. I don't want to buy Australian dollar, I'm scared because they said it's going to go bad. It's going to go
218 00:37:10,770 --> 00:37:16,620 lower. You know, Bloomberg, you know, think about Bloomberg, they should know what you're talking about. Right? Okay, well, let's take another look at another
219 00:37:16,620 --> 00:37:24,450 person here. Here's daily FX. Okay, and I'm gonna have to block out this this guy's face and name because I want to
220 00:37:25,860 --> 00:37:35,220 be in trouble Valley and that stuff, but here's daily FX, and Australian Dollar may find itself. It's overextended. Okay, so in other words, the fundamental
221 00:37:35,220 --> 00:37:48,510 australian dollar forecast is bearish. And eventually, Australian dollar goes on alert several 100 pips higher as a result of all this wonderful insight. And
222 00:37:48,540 --> 00:38:00,630 here's another one. Aussie dollar is directionless. May 30 2017. It's directionless folks. Okay. It's the you know, the end of May, and our seasonals
223 00:38:00,630 --> 00:38:13,140 are calling for it to rally. And that's the end of May right here. And then we get this. So what we're doing is we're putting an arm wrestling match against
224 00:38:13,320 --> 00:38:23,580 the banks and the neophyte traders or this year, the stupid people the dumb money, okay. The working class hero, you traitors, guys, the guys that don't
225 00:38:23,580 --> 00:38:34,740 really know much the baby pips, if you will, okay. And if you have smart money against an entity like that, obviously, you know who's going to win at the end,
226 00:38:34,950 --> 00:38:43,290 okay? You don't want to be in the uninformed crowd. And they are uninformed, because they follow all of the crumbs that's been laid in front of them, like
227 00:38:43,290 --> 00:38:52,530 good slaves, okay, like good sheep. They're going to eat what's placed in front of them. All these news events, they're there to build in sentiment, all these
228 00:38:52,530 --> 00:39:00,480 media companies, okay? I wouldn't be surprised if they're not in cahoots to make this whole thing. Unfold just like that. Okay. It's it's conditional
229 00:39:00,480 --> 00:39:08,460 programming. So over a period of time, they start building these ideas. Eventually, you keep telling somebody, it's bad, it's bad, it's bad. They're
230 00:39:08,460 --> 00:39:15,180 gonna think it's bad, too. Okay. And then they got to tell everybody they know about the whole thing. So the sentiment, like an opinion gets shared with
231 00:39:15,180 --> 00:39:24,690 everyone. And the more it spreads, it's like a virus, it permeates everything. And since we're on a social media and technology, air, it's so easy to share an
232 00:39:24,690 --> 00:39:36,840 opinion. So once an opinion is developed, and it's shared widespread, it builds in a huge diametrically opposed condition, which is market sentiment. So by
233 00:39:36,840 --> 00:39:47,700 itself, if I see these types of things, these ads and articles and then I see it in a sentiment play, like here we have Australian dollar and we're going to now
234 00:39:47,760 --> 00:40:04,770 apply a sentiment reading with oscillator. Williams percent are and we'll start with the 20. Okay, and here we are Ideal long entry, I have it set at 80. And
235 00:40:04,920 --> 00:40:16,860 ideal short entry, or so basically if your long is 20. So this is 20. And I want to look back gave a good reading for this buy here. Didn't give me a goodbye
236 00:40:16,860 --> 00:40:33,600 there did give me a goodbye there. Okay, so 20s It's iffy. So now I'm going to change the indicator to 14. And this does look like form fitting on now. But
237 00:40:33,600 --> 00:40:42,600 you'll see what I'm doing here in a second. Okay, so now we have a nice reading here, we have a nice reading here, we have a nice reading here. So when price
238 00:40:42,600 --> 00:40:50,610 came down again, in here, this should be a goodbye. And it was. So it's calibrated the 14 period for sentiment. And we've done that by justifying the
239 00:40:50,610 --> 00:41:03,960 old lows back here, see how fast it took it. And I gave you three to choose from 2014 and 10. Now if I go to 10 period, it'll probably still do very well. But
240 00:41:03,960 --> 00:41:09,630 you really want to have a little bit more time, you'll want to always use a small, smallest one, because the smallest one will always generally give you a
241 00:41:09,630 --> 00:41:19,080 good reading regardless. And that sometimes is a little two sugar coated in my opinion. But you can see it doesn't here, here, here, here and here as well. But
242 00:41:19,080 --> 00:41:26,940 14 periods in my opinion would have been optimal, because gives you a little bit more time filter. Okay, it smoothes it out a little bit more versus these
243 00:41:26,940 --> 00:41:39,540 jagged, up and down readings you can get with a 10 period on a weekly candle. So we have sentiment, we'll put it back on 14 Certainly it stays with us our
244 00:41:39,540 --> 00:41:49,620 presentation. So we have our macro sentiment in terms of technicals down here saying we're, you know, everybody's thinks it's bearish. Bearish, bearish,
245 00:41:49,620 --> 00:42:01,290 bearish. Okay, short cover, and ideal long. Okay, towards the 80 reading. And also at the same time when all the headlines were saying it's the end of the
246 00:42:01,290 --> 00:42:09,600 world for Australian dollar, it's gonna go down or it's directionless. Nobody was saying it's gonna go up. So sentiment was what bearish? Technically, it's
247 00:42:09,600 --> 00:42:18,630 bullish, because it's an extreme reading down here. And we built all the ideas with the premium and discount arrays where we were in a discount array, bullish
248 00:42:18,630 --> 00:42:28,860 order block, fair value get closed and seasonal tendency, boom, explosion, okay. So, we had we covered the
249 00:42:30,659 --> 00:42:42,059 relative strength aspect, we looked at the CRT used both the natural use of co2 graph zero line above is bullish below is bearish. And then I used my ICT
250 00:42:42,509 --> 00:42:51,989 hedging program concept. We use the 12 month range, go back 12 months find the highest and the lowest reading on the commercials holding only. Okay, just to
251 00:42:51,989 --> 00:42:59,879 commercials, you're getting that reading and split that line in half, do it on paint, and then you can get a real, closer depiction of what they're buying and
252 00:42:59,879 --> 00:43:08,369 selling is. And we figured out by sentiment, looking at the headlines that the Australian dollar they were saying it was directly or bearish. Nothing was long
253 00:43:08,369 --> 00:43:15,719 said sorry, market sentiment was bearish and diametrically opposed to commercials which we're buying. And we have seasonal influence expecting June
254 00:43:15,749 --> 00:43:24,899 lows to occur in a rally in June. And we haven't technically also with William sort of seminar. Okay, so we can see a visual depiction of sentiment being
255 00:43:24,899 --> 00:43:35,249 bullish because it's extreme oversold. This means this is what the public thinks it's going down this thing. They think the public is extremely bullish here.
256 00:43:36,209 --> 00:43:46,169 Public is bearish. Public is bullish public is bearish. Public is bullish, public is bearish. And we diametrically opposed ourselves to that view, when all
257 00:43:46,169 --> 00:43:54,269 of our Smart Money concepts that I've been teaching you when those overlap, and then you have seasonal too. It's just like taking candy from a baby. It's so
258 00:43:54,269 --> 00:44:06,899 easy. Now we go into market profiling as well. So we had market come off this low, rally away then retrace, so we're in a consolidation but we now at this
259 00:44:06,899 --> 00:44:15,449 point we know the consolidation is giving us clues is going to break out to the upside. If that's true, then we should be looking for the profiling of a
260 00:44:15,449 --> 00:44:23,999 retracement. Even though we're in a long term consolidation on the monthly on the weekly it changes to now we're on a retracement and it's expecting a
261 00:44:24,329 --> 00:44:33,089 expansion swing. So this is an impulse swing, retracement expansion swing. Okay. Expansive swing tends to go a little bit more than the impulse swing does. And
262 00:44:33,089 --> 00:44:43,319 that's why we have their Fibonacci is usually overlapped with this to get our extensions for targets. So from profiling standpoint, we see a retracement to
263 00:44:43,319 --> 00:44:58,499 expansion and inter market analysis we already saw that the dollar index was supporting this move by weakness in the part of the dollar. And from a PDA PDA
264 00:44:58,499 --> 00:45:19,739 array matrix, stay endpoint, we have all of our discount raise the bullish orderbox. Okay. Supporting price you see buying coming in here, and up close
265 00:45:19,739 --> 00:45:31,829 candles are breaking here. Okay. And price has gone through and taken out the monthly rejection block and the old high. And that's it, these levels are okay.
266 00:45:32,459 --> 00:45:42,899 And that's an example of taking all the information from a monthly chart transposing into a weekly, and now weekly down into a daily. So we take all this
267 00:45:42,899 --> 00:45:57,869 information, okay, all this information will be transposed and placed on to a daily chart for our short term analysis, top down approach in our third teaching
268 00:45:58,019 --> 00:46:06,509 next week. So hopefully you found this insightful. Again, we'll build on these concepts and give you much more detail. But for now, this is all that it takes
269 00:46:06,869 --> 00:46:16,529 all the information you've learned. That's all we do, we take what you've been shown here from a process from beginning to end, and you do things modularly,
270 00:46:16,559 --> 00:46:24,089 you don't try to apply everything, you don't try to push all the concepts into one timeframe, and try to make it all speak to you. Because you'll never get
271 00:46:24,089 --> 00:46:32,519 anywhere, you'll be confused. None of this should be confusing to you. It's really simple, it's streamlined, there's not a whole lot of everything applied.
272 00:46:33,029 --> 00:46:41,669 Each specific timeframe has its respective characteristics, and you have to apply certain tools to those timeframes. Notice we didn't do a whole lot of
273 00:46:42,449 --> 00:46:51,779 detail with analysis with time date type things is not required on these timeframes monthly and weekly. Now, when we go into daily or next teachings next
274 00:46:51,779 --> 00:46:58,829 week, you'll get much more refined information about time of day, and a lot more indicators and tools. And that's probably what you're waiting for. But you don't
275 00:46:58,829 --> 00:47:06,899 need that stuff. This stuff here. What I've already shown you here so far, this is what everybody else lacks. So if they don't have this in a trading, and
276 00:47:06,959 --> 00:47:14,189 they'll do well, is that probably something that they should start doing. Sure, but they're not in this group. So the hint couldn't be without
277 00:47:15,540 --> 00:47:27,210 this information. If you use it, and you try not to. And you increase with taking other disciplines and applying to keep it just as I've been showing you
278 00:47:27,210 --> 00:47:35,250 here, the previous lesson in this one. All we're doing is taking the information in building and fleshing out what the institutions should do. Notice what we
279 00:47:35,250 --> 00:47:46,980 did, we applied seasonal influences that the technicals should support because of the technicals in our repeating seasonal tendencies are seeing higher prices
280 00:47:46,980 --> 00:47:57,810 and lower prices. Aussie dollar we looked for seasonal low in June. It came it came by way of institutional sponsorship insufficient orderflow. The commitment
281 00:47:57,810 --> 00:48:09,660 to commercials were net long based on both camps whether it uses my concept of the hedging program or using the standard co2 graph and sentiment was bearish to
282 00:48:09,660 --> 00:48:17,370 directionless. The words were directionless or going to hell in a handbasket. That's basically what it was. Nobody was saying in the reports to buy Aussie
283 00:48:17,370 --> 00:48:28,200 dollar nobody was saying that. They were saying it's gonna go down and it didn't go down. It rammed radon up into a level we anticipated. We talked about this.
284 00:48:28,560 --> 00:48:34,710 In fact I was looking for it in March I was wrong. We had a little bit of retracement back here. But it came down to an a buying opportunity and look at
285 00:48:34,710 --> 00:48:42,270 the nice explosive price move there. We didn't miss it here it was all we were all over it but the long and short of it is these are the components we use from
286 00:48:42,270 --> 00:48:46,980 monthly to weekly now weekly, to daily and until next time, I wish you good luck and