Suspension Block
"This was the positive balance outside efficiency with a volume bounce at the low and a volume bounce at the high which makes this a suspension block"
"Going forward and what was salient to me was the midpoint of this... that's consequent encroachment"
The Framework
"This would be the trigger. Okay, this is the framework. If we were unable to trade above that, we're going to remain bearish."
"If we go higher and use the upper half of the suspension block, it would act as a bullish scenario. If we fail to get above it and lay bodies down up it in the upper half of that on the daily chart... you can see that that we only whipped up into it."
"That daily suspension block turn inversion fair gap that's bearish. That's the midpoint of that."
Gradient Levels (Quadrants & Eighths)
"So this is how you do it for the eighths. So there's quadrant levels. There's your upper or lower quadrant consequent encouragement, upper or lower quadrant, and then you have your eighths."
"This is why I originally started with gradients because I knew by saying quadrants, it kind of makes it difficult for me to segue into eighths"
Fib Settings for Gradient Levels
| Level | Description |
|---|---|
| 0.0 | Low / Range Bottom |
| 0.125 | Eighth Level |
| 0.25 | Lower Quadrant |
| 0.375 | Eighth Level |
| 0.5 | Consequent Encroachment (Midpoint) |
| 0.625 | Eighth Level |
| 0.75 | Upper Quadrant |
| 0.875 | Eighth Level |
| 1.0 | High / Range Top |
"If you put these levels in there, you'll get levels that would be pertinent for more highly specific quadrant levels or gradient levels."
Grading Wicks
"The idea of looking at wicks... that's not something new here. We've been talking about that we grade those because they're they're gaps"
"You can see that we traded down to consequent encroachment of this discount wick and this discount wick here. We traded up into this quadrant level right there."
SMT Divergence
"So we get a SMT divergence. This is ES."
"I have this line plotted and posting the change of only the high price... this cumulative line here is showing the cumulative price of the high, not the close or the low or anything like that. It's the high because what I'm doing is I'm comparing relative price action with the highs of NQ here with the relative highs formed at the same time in ES."
⚠️ Critical Distinction
"Divergence there which is a qualifier. It is not a selection tool. It is not a timing tool."
"Same delivery contract month ESH2026 on Trading View"
Regular Trading Hours Opening Range Gap
"This is the opening range for regular trading hours today. Previous day settlement. This morning's 9:30 opening. That's your range here. Halfway point here."
- Previous day settlement (top of range)
- 9:30 opening price (bottom of range)
- Halfway point between them
Price Action Example
"Notice what happened. We opened here, traded immediately down to halfway, ripped down to a full gap closure, and then did what? Did it bounce and start to rally up? No."
Key Takeaway
"We're already in an area where we were proving that we couldn't go higher because we couldn't get above the consequent encouragement of the daily suspension block"
Gap Closure and Continuation
"We gapped up, then we gave up the gap entirely and then went outside of the range low of the gap... Traded right back inside of it once more into a gradient level and then gave up the ghost."
"My trading hours opening range gap theory, which is not what everybody else talks about, I don't use a opening range breakout strategy. You know, that's that's all chasing price. I'm not interested in that."
"I want to know what I'm looking for and then key off of a very specific price level and I'm trading against the direction of where the market's going to go."
New Week Opening Gap
"The market fell away from that level and gravitated down to the new week opening gap."
"I said, I'm studying to see if it'll get to the new week opening gap high. And just like a dog whistle, the market heard, ran right down into it, used the high of the new week opening gap, then traded to the low of it, broke below it after finding premium sensitivity to it"
"Spent some time in a new week opening gap, allowing for ES to get to its new week opening gap. And then everything started moving at a general gradual movement lower"
Market Difficulty & Trading Guidance
⚠️ Current Market Conditions
"It is very very difficult when you're inside of a range like it is here. Like this is a lot of geopolitical manipulation, a lot of manipulation on the part of the metals markets. There's so many things going on. You're being challenged by every possible opposition there is."
"The level of difficulty at the present moment is off the charts. Okay? It's very, very difficult. It's hard to stick with an idea because the volatility is so high."
Guidance for New Traders
"If you're feeling that, just take a couple months off. Just come back in the springtime. I promise you, end of March going in the beginning of April, the price action will be far more cleaner than it is now."
"Unless you know how to trade inside these ranges, it's going to be very problematic for you and you're probably going to blow your account. You're going to go on tilt. You're just going to revenge trade. You're going to get frustrated"
"That's not you being a poor trader. That's not you using poor concepts. Everybody's methodology right now, I promise you, everyone's methodology has caused a doubt or a concern or a suspicion that they may get, you know, sniped because of the volatility. That's the underlying common denominator."
Position Size Guidance
"It could go even higher than this which is why I'm demonstrating far less position size and also showcasing the micros when I'm giving you examples of trade executions"
"Let's just consider maybe one or two or three micros at most, okay? And live to weather a incorrect execution."
⚠️ Final Warning
"Gambling in these environments will absolutely have your head cleanly removed from your shoulders."
Trade Example - Short Entries
"We're trading up into that. Lots of shorts could be taken there. Shorts could be taken in here, right in here. All the inefficiencies, beautiful little segments of price action. And the market drops off precipitously."
"If I'm bearish, I want to sell short when the market's going up into some kind of inefficiency, some kind of a premium array or take out an old high."
"I want to know what I'm looking for and then key off of a very specific price level and I'm trading against the direction of where the market's going to go."
Liquidity Targets
"This level here, this level here are simply sellside liquidity pools. And the market went lower."
"Broke into the halfway point of that lower discount wick on the daily chart. That's what that red line is here. It's also that sellside right there."
"The low of that daily discount wick is obviously the next intermediate term draw liquidity."
Study Flashcards
Click each card to reveal the answer (direct quotes from the transcript).