Transcription
And sorry about missing yesterday again, right? My boy, my [Music] son, my life right now. He just like came out of the blue. It's like there was no warning or anything. Literally, like we had to like rush to the hospital, and it was like, you know, just, you know, it just took us by surprise.
But yes, today we'll be talking about a, you know, a couple of theories, if you will, or, you know, concepts which I have, you know. Well, I'm the only one that's, you're going to ever hear talk about this, and this is new. No one ever talked about this before. It's a different way of seeing, you know, order flow or liquidity.
So, yes, let's, you know, try to refresh everyone's mind, right? Remember we said that Monday and Tuesday, you know, would be low probability. You would expect movement on Wednesday, which we did have a crazy on the movement, you know, on CPI. And before we look at the charts, I want you to understand. I want you to know that, you know, the high and the low of the day, wherever day, whether it's Tuesday or Wednesday, but it will always be the second week of the month, right? Whichever day we have CPI, right? If we are close to the low, that low will have an enormous amount of liquidity below it. And if we're close to the high of the previous day, if it was CPI, then that high will have a, a lot of liquidity above it, right?
So, these highs and lows, and I'm talking about CPI because, like, after CPI, the day which follows CPI, CPI is usually the day that, like, sets, you know, the trend for the week. The actual trend is like. So, CPI is usually like manipulation, but, you know, they inject a lot of liquidity, get people, you know, induced, get people, you know, mind, minds turned towards the direction in which they push the market in. For example, right? They dropped the index futures market in CPI yesterday, and today, you know what we expected to happen, happened, right? The low of the weekly cycle so far, right? It was formed on Thursday, but on Wednesday, for one of the other pairs, which was the Nasdaq, if I remember correctly, right?
So, literally, right, to me, in my opinion, when it comes to finding, you know, one shot, one kills, like that trade that, you know, will be in, you know, your favor most of the times, um, high probability, you don't need a higher time frame PD. You could use one if you want, but you don't need one, right? You really just need premium, discount, sequential SMT, and what else? And the gap also.
So, today we will be looking at, you know, a, another type of cracking correlation, right? That is different from the SMT pair, right? Which, you know, the assets which usually, you know, cause this, you know, would be like, for example, the index futures for index futures, it would be the Dow. For for market, it would be GU. For the bond market or the interest rate pairs, right? The markets will control everything. It will be the five-year T-note, right?
So, now we will look at the interest rate pair, right? So, here, right, we're using the one-hour time frame, right? Right now, at the moment, we are focusing on the weekly cycle, right? And it's just because I, you know, personally, I love the weekly cycle, you know, just because, like, just focusing on the weekly cycle, you know, you can find a, a lot of trades if, you know, you are trading in the direction of the order flow of the weekly cycle.
So, for example, here, this high, right? These highs, you can see that price, right, traded above the high of this cycle, well, this cycle's quarter, right here, which would be Tuesday, right? So, it's Wednesday, traded above Tuesday. Then here, we had Wednesday trade above Tuesday's high again. Also, here, we had Wednesday trade above Tuesday's high again. So, here, if you're just looking at the interest rate pair, what would you see? You'd see a symmetrical market, right? And as you guys realize, I'm not using any lipstick right now, right? Because, like, at the end of the day, I want you to be seeing this, you know, this type of price action easily, you know, just waking up in the morning, just opening up your phone and just looking, or just, you know, take, grabbing your iPad in the morning, right, off of your desk, which is what I usually do, just look at it. Or, you know, if you're someone like me, you, you have a bed in the room that you trade, so you sleep there and, you know, always keep your screens on. So, I'll just wake up in the morning and I'll just literally just glimpse at the, the three pairs to see if something is there to work with, literally, right?
And it depends on which type of trader you are, right? If you're a scalper, then you would, you know, you'd be functioning with, within the 90-minute cycles. You know, if you are a day trader, then you're more than likely going to be using the daily cycles, right? You're going to want to be, you know, catching or trying to catch the high of, you know, the sessions, like, for example, you trade London at the high of London, exit at, you know, the low of New York, or, you know, something of that measure.
If you are someone that, you know, you have a bit of patience, or you don't even have to, you know, have patience, or you would just like be a person, for example, that, you know, you can't be looking at charts at the time, you know, all the time, right? So, you would be, you know, more or, you'd find more success in trading the weekly cycle. Why? Because you would just be, you know, trusting the concepts that, you know, we talk about and no one else talks about, right? You'll be trusting these concepts and you'll just be applying them to the weekly cycle, right?
So, and when you're looking at the weekly cycle, as you can see, because we're looking at the weekly cycle right now, numbers fractal, anything that happens here happens in the daily cycle, happens in the 90-minute cycle, happens on the micro session cycle, happens, you know, the yearly cycle, all, everything, the fractal cycle, all of them, right? So, right here, we're just focusing on the weekly cycle because currently that's what, you know, personally, I want you guys to be focusing on because I think that if you understand the weekly cycle, it would be easy for you to find day trades. And if you understand, you know, the weekly cycle, then, you know, it's easy for you to find one shot, one kill, as the week is the basis for all of that.
So, here, right, as you guys can see, right, higher high, higher high, higher high. Now, look at this higher high. This higher high was formed on Wednesday, right? This is the interest rate pair. They all form a higher high on Wednesday, but they're reversed. There was no cracking correlation here between them, but there was a cracking correlation between these and the Forex market. So, due to the fact that we made a higher high here, what would, you know, what should have been, you know, what would have caused symmetrical price action here, which would probably not, you know, cause price to reverse, right? If this made a lower low, and here made a lower low, and all of these three made a lower low, then we would expect price to just continue lower. But here, you can see the price made a higher high here. No, a higher low here, my bad, right? Failed to take out Tuesday's low, whereas within the, just rate pair, we took out Tuesday's high. See, right here, failed to take out Tuesday's low, right here. Failed to take out the high of Tuesday, right? Right. And these two asset classes, GU and GBP, they should be moving in the same direction, doing the same thing that, you know, this is doing on a regular day. But here, this made a higher high. These GU, G, and EU, they made a lower high. So, this was, you know, intermarket sequential SMT, and that's why we had price, you know, fall lower.
And even after this, right, if you're someone that's, you know, cheeky, right? Right here, you can see that, you know, this candle right here, before it broke down, and I will use the crosshair for this, right? Before it broke down, you can see that we, you know, made a higher high here as well, right? It's, it's, if you look at the lower time frame, for example, the five-minute time frame, you would, you would see this, right? And remember, if you're using the one-hour time frame, for example, then you would use a, you know, for a higher time frame, you know, reference point, then you would be using the 500 time frame for entry. I'm just saying that it's not necessary right now because you wouldn't, you don't really need to be going into, you know, really lower time frames, just based, just based on the fact that these made a higher high here, you could literally just, you know, you know, enter within this fair value gap and just put your stop here. And even if you entered here and you put your stop here, or you entered on the rejection block and put your stop here, then you would, you, you would, you know, still be quite safe.
So, yes, so this is, you know, the reason why the markets turned around. And then below at these lows, you know, you can see that we have, we have what you would call, you know, symmetrical lows, right? Which is any lower high or any relatively equal lower high, which were not caused by SMT, right? So, you would expect price to just gravitate to, you know, these lows right here, in regards to EU and GU, and these highs right here, in regards to the US dollar Index, right? And you can see that was, it was CPI, and price just rallied due to the fact that, right, there was intermarket sequential SMT.
So, yes, Michael teaches that, you know, stay away from this, you don't want to be trading right here. But no, once we see this, and CPI is usually, right, the direction for CPI, it's not random. It's not like market makers pressing a random button. It will, right, it will always, right, be in the direction in which we had a weekly, weekly sequential, and it's very important, right? A weekly cycle sequential SMT, right?
So, here, you can see, right, it looks symmetrical, right? But when you compare it to the interest rate pair, you realize that it's not. If we had sequential SMT between, you know, like, for example, EU and GU, or EU and the US dollar Index, right? Then you wouldn't really, you would need to look for, you know, price, you know, you would really look, need to look for anything within the interest rate pair, right? You would just, you know, stay here, and anything here would literally be confirmed by the price action that's happening here, because once there is sequential SMT here, there has to be intermarket sequential SMT, you know, between pairs. Do you understand? I'll say it again. Once there is sequential SMT between, you know, the pairs that you're, the pair that you're currently looking at, for example, if it happened between, you know, ES and NQ, or between EU and G, and GU, then you wouldn't need to, you know, refer, you know, back to the interest rate pair. Why is that? Because once, you know, price action is out of line here, there's a cracking correlation here, there has to be a cracking correlation between at least one of these asset classes and all of these ones. More times than not, you will see, you know, these moving, you know, in sync, lockstep, like literally.
And if you're someone that trades, you know, the bond market, they'll be like, "I can't find a cracking correlation." That's because the bond market, the 10-year note, the five-year note, like they are a, you know, just a, you know, just the gears which allow price to turn around, right? What happens is, within the algorithm, you have EU, right? Or the dollar, the US dollar Index, right? It does what it's supposed to do. That it just instantly reflects upon EU and GU. What happens, right? Is there a cracking correlation? No, there's not a cracking correlation. Okay, now what happens? It looks for information here. Okay, is there intermarket sequential SMT? Now, is there cracking correlation between any of these assets and this one? Is there one? Like, is there one present? If yes, then what happens? Price turns around. If no, which, what happens whenever price is not in sync, which allows, you know, whenever price isn't in sync, for example, if you have the interest rate pair is going up, the Forex market going up at the same time. Listen, if you have them going up at the same time, then you don't really want to be trading, right? They, they, they need their needs to be, you know, they need to be moving lockstep. And what I mean by that is, you need to see GU and EU going in the same direction as the assets that are in front of us right now. The US dollar, which controls the US dollar, is the link between everything, right? Literally, US dollar links the Forex market to the bond market, yes, to the bond market. That's literally how it is. It's like a bridge, right?
So, again, as I've said, just now, the only time you need to look at this is if, you know, you see price just, you know, moving in sync on these time frames. For example, right now, it looks like price is in sync, but still, it turned around. It just reversed. And to someone, you know, that will be, you know, that's learning from me, they hear me say the price only reverses when there is SMT, right? That is true because there was SMT. It was just intermarket sequential SMT, right?
So, on a regular day, days that you want to trade, or when, right, you have intermarket sequential SMT between, for example, these pairs right here and these pairs right here, right? There are times when you will have all of these assets make a lower low, and all of these assets make a, and these assets, which is the, are the US, the US dollar Index, that would make, you know, for example, that would make a, hold on, make a higher low, right? I think I'm like losing myself right here, been like so much sauce, but anyways, let's start over, right?
So, here, right, if you, the dollar Index is making a higher low, right? And you have this making a lower high, this making a lower high, and then you have this happening right here, a higher high, higher high, higher high, right? This is a, you know, cracking correlation between these two pairs, and I just need you guys to understand that. And this is why you need to be referencing, you know, the interest rate pairs whenever you're trading this. But as I said before, and I'll say it again, the only time you need to do that, the only time you open this tab and look at it is when you see nothing here. And again, right, this is for everyone that's listening, right? Everyone that's paying attention, the people that, you know, you, you haven't fallen asleep as yet, right? You're waiting for the sauce, and this here is it. Here it is, right now. You've made it.
So, yes, whenever you see, right, the US dollar, right, moving in the same direction, right? If you ever see the US dollar moving in the same direction of the interest rate pair, do nothing. That's low probability. Even if there's code and code sequential SMT within, you know, your, the current asset, you know, pair that you're working within, it will be low probability. And why is that? Why can you tell me why? Why is that? That's that's that's because, like, literally the market is, and I don't want to say too much, but let's just say the market is being unclear on purpose, right? As ICT would call it, high resistance liquidity runs. What do you expect after, you know, seeing the US dollar drop and then you have these drop as well? If that happened, what would you expect? Consolidation. You would expect, you know, price swings that make no sense at all, no gaps being filled, literally, right? Just manipulation, that's what you would expect.
So, and here, right, remember what we talked about? We talked about, and I'm talking about the, whenever we talk, what was it? I believe it was yesterday and Sunday. What were we looking for? We're looking for exactly what's here right now, right? Every week, you know, there are, you know, there are one to two, you know, sequential SMT, right? In regards to the weekly cycle, right? So, there's either one or two. More times, there, there's two. Sometimes there, you know, if you're lucky, you can find three. Are you like paying attention to what I'm saying? Look at the charts right now, and I, you know, reflecting upon your experience here, what do you, like, realize?
First of all, right, ICT teaches that, you know, I believe that this is what he says. He says that 70% of the time, the week is wrong. That's false. You can't prove that. That's a lie. Right? That does not happen. Like, who's here from ICT's private mentorship and they realize that that's bull? That is it. It does, like, and I, I don't know why he says that. I believe he knows that that's a lie, but whatever. But I'm just here to tell you that's a lie. There are no days, you know, there's no day that really has the high to low the week. You know, more times than not, it just depends on, you know, what's present on that day. But I can tell you that using these concepts right here, the day that will have, you know, or the days that will more than likely, more times than not, form the high to low of the week will be Wednesdays and Thursdays, right? Wednesdays and Thursdays, more than likely, more times than not. And this usually happens when there's like no news event on Monday, no news event on Tuesday, but then there's a news event on Wednesday, Thursday, and Friday, or Wednesday and Thursday, or just Thursday, right?
When you're trading the weekly cycle, you're focused on the weekly cycle. You need to pay attention to the economic calendar, just as though if you're trading the daily sector, you need to pay attention to the economic calendar as well, right? And I am not like hiding anything, like being mysterious. I'm telling you how it is. I'm telling you how these markets work. Like, look at this, we've been talking about sequential SMT for a while, and just look at this. Look right here, right? And once, as I've said before, once you have sequential SMT, right? Once you have sequential SMT, you know, between the, between a pair, which, you know, I would be referencing to a pair as, you know, ES against NQ, or against the Dow, or the dollar against EU, against GU. The only thing that we use the bond market for is to gauge market sentiment, is to see where we are, is to, you know, determine what kind of conditions we should expect. Will price consolidate? Will there be a range in the market? That's the purpose of, you know, that for me. I'm not going to trade bonds. Yeah, more, sometimes, you know, we know what it's going to do sometimes, but like, I'm not going to trade bonds. It's like, it's just like an actual, what an actual indicator should be, if you know how to read price action.
So, anyways, here, right, we can see that we traded below Wednesday's low. And remember what I said before? Do you remember I said that the lows, and I mean that, you know, if the low or the high, right, is attacked first, right? The low of the day, you know, wherever, you know, wherever we had CPI on the high today of, you know, whichever day we had CPI, the day after, you focus on the high and the low here. You will find real premium and discount, you understand? Real premium and discount, right?
So, if price was trading here, and, you know, we haven't been speaking about true OP that much, and that's due to the fact that I think that you already know what they are, and you already implement them every day, which you should be doing, right? It's just a basic concept, like it's kindergarten, you know, you should know this by now, right? So, you can see that right here, we're below what? We're below the true weekly open. What else? We're below the true daily open. So, just as how, right, just as how you need two sequential SMTs, right, for price action to be, you know, determined, for order flow to be, you know, intact, you know, readable, readable, you need to have price trading below at least two true opens. You've got to write that down, right? Not one, just because they're sequential. Two. Now, if they're trading below two true opens, right? And then there's sequential SMT, which, you know, that you need two sequential SMTs for it to be sequential SMT, right? For price to reverse, you need that. But when you have, you know, these two true opens, which it's say, higher time frame cycle, a lower time frame cycle, you have a higher time frame sequence and a lower time sequence. What happens then? You have price reverse. And then similar, similar, similar to SMT fills, right? We have other things that are similar, but, you know, it's not the same thing.
So, for example, right here, right? And I mentioned that we would, you know, speak about the dispersal of liquidity, right? Which happens. And this is just an introduction because, um, it's like, it's just April, right? So, this is just an introduction. Yeah. So, probably blow some people's minds, and then you'll like begin to dig and understand more things. But looking at it in front of us, right? And then we go back to the sequence of SMT that, you know, formed the low, the week so far, of course, and, you know, pay attention to the true opens and, you know, whatnot. But what, what do you realize when you look at the market right now? You can see that here, right? Today, right? It barely rallied, right? And that is totally fine. This is, this is literally what the Dow, us, you know, do more times than not, right? Whenever it's not, you know, in complete sync, or, you know, the liquidity is not dispersed equally among all three. So, for example, right, the say the market cap, and this is just, you know, me just trying to get in your head, trying to make this make sense for you, right? Trying to like explain it in an easy way. Say, for example, right, you have, um, like 100% liquidity, right? Right here, I, you could say that this just has, like, for example, 15% of the liquidity, you know, that is available to all three. You can see that this right here is like, oh my gosh, like, I'd say like 55%, 60% of all the liquidity, and then this has the rest. So, this like 50, this has 15, this would have like, you know, 35. Am I doing the math correct? But, you know, something like that.
So, and again, let me try to explain again. You have 10, basically number 10 here. You put six here, of whatever here, two, right? Or no, you put like, this will be like one, and then three here. So, the liquidity, right, should be equal. But here, it's not. Most of the liquidity is, it was pushed where? Within the Nasdaq. And coincidentally, we had Nasdaq making a higher high, which, you know, would indicate higher prices, you know, without even, you know, thinking about this, right?
And how could you know, you know, which one, you know, will expand more? First of all, yeah, right here, higher high, higher low, my bad, higher low, right here. Here, you can see that price closed below this low. We suggested already, right? And let me use this, right? Price closed below this low here, which suggested that this was weaker among all of these right here. Price closed above the low, but it closed below the close, the lowest close of the previous, right? And due to the fact that this happened, right, price rallied here, right? And when price rallied here, closed above this high, that was a shift in market structure, a real one. Here, closed above this high, right? Price fell, traded down into this. It went over, right? Dug into this daily close candle here, and I'm currently talking about the ES, right? Whereas here, we have, we had price just trade within this gap. So, price, you know, price action, and this is why I like the Nasdaq more, because whenever, you know, we have these conditions, and the Nasdaq is, you know, usually the best thing, right? So, Nasdaq traded here and turned this on, fell on a new day opening gap, right? Fell here. But look here now, right? This is like, literally what I was trying to get to, right? Look at the Dow. Do you see that? Pretty sure that you do. So, right, we have the Dow taking this low out, right? While, right, the Nasdaq was trading into a gap, this, you know, trade over the gap, but it, the close was, you know, basically within the gap, dug into this candle. So, we had what? SMT here. Whenever, right, you have a higher time frame SMT, and then you have a lower time frame SMT afterwards, whenever you have two of the three, you know, pairs that you're working within, for example, ES made a higher low, and Q made a higher low, but the Dow made a lower low. These will expand more. These will move more. Why? Because this is weaker. Why is it weaker? It, it took out the lows, you know, literally two times in a row. Like, it's like, thank God that it even took this high out, right? And this isn't a problem, why? Because we don't really trade the Dow. We focus here, right, on these two. So, whichever of these two that you like, then, yeah, this is, these are the ones that you would trade.
Also, looking here, what would even make us, you know, consider this right here? And this is probably the most, like, this day, literally this day, with the, the exact condition, CPI before Thursday, like, literally everything. Nothing is random. If we have this same news event that happened today, on the same date, you know, in another, the same day in another month, with the same conditions, then we're going to get similar results to what we got to, to, to what we got today, because prices are random. Right here, right? I am going to take the lipstick off. Look at the monthly cycle. Go to the forward time frame because I use the forward time frame for the monthly cycle. And what do you see here, right? This was the low of the previous week, right? We traded below that. This was the low of the previous week. Looking at the ES, did we trade below it? No, we did not. No, we didn't. And then, right, right. So, going here into this week, there was already, right, well, not going into this week, but like, you know, after Wednesday, you know, there was sequential SMT, right? Look at the Dow. Dow is still below that low, as you guys can see, right? So, the Dow has a bit of keeping up to do, like catching up to do, not keeping up, but catching up to do, right? The Dow has a bit of catching up to do. The highs here, right? And if you guys remember, we were actually, you know, looking for price to be drawn to these highs, looking at the E, not ESD, Nasdaq right now, NQ, right? These equal, these equal highs. We're looking for price to be gravitated towards them, right? We had sequence of SMT between, you know, the monthly cycle, between Q1 of the month, Q2 of the month, then afterwards, then this is literally the, the perfect, the thing that you're looking for, the thing that you need to focus on, right? Then we had SMT in a lower time frame cycle, you know, which occurred here. Let me, occurred here between Tuesday and Thursday, right? So, we had C SMT here on the higher time frame cycle, right? The monthly cycle. Then we had it, you know, within the week, right? Between two days, right? Look at how the Nasdaq expanded higher, taking out the previous day's high, where these failed to do so.
First of all, right, the reason why the Dow is this weak, you can see, is because the, right, Wednesday closed below the previous week's low here. We have a little bit of strength here, right? Due to the fact that, you know, Thursday closed above this low. But due to the fact that the Nasdaq closed higher than both of them, then we would expect the expansion to be here. And we could literally, you know, based on this, we could literally expect price to go higher, or expect, you know, a failure swing to form, due to the fact that this was already present, just by how price closed on Wednesday. And again, if you guys remember, like, I, I don't know, do I have to, like, clip it and post it in the group? Like, I, I hope most of you guys watch, like, Sunday, when we were, you know, doing our analysis, right? We referred to this low, and we expected sequential SMT already, and we, I pointed to this specific day, right? Literally, yes, we did. And the reason why, remember what, why I said that these lows were important is because what? Here, let me say it again, right? As you guys can see, right, this low right here, and now we're looking at the ES, failed to take out this low, right? Friday failed to take out Thursday's this low here, and this is for, like, liquidity purposes, right? You can see that price did, you know, in fact, trade below this low by a bit. You can see a little bit right here, but it did so. So, it comes right here. Price failed to trade below this low, right? So, as soon as you see things like this happen, right? And due to the fact that there was no closure, so this was obviously not, you know, the re, the actual reversal, right? This was just, you know, engineering a pathway for, you know, CPI to, you know, manipulate upwards, take out these equal highs, drop, have everyone think that price is, you know, bearish, and then just turn on them on Thursday, which happened, right?
So, here you can see that price traded below this low, which was caused by SMT, right? Right. Failed to trade below this one. Traded below this one. And then after that, we had sequence again. If you focus on these highs, they're all wicks. Whenever you see, you know, price just, you know, showing wicks like this, right? Then you know you can expect, you know, price to gravitate to them once there is sequential SMT, right? And, you know, something that you should know is, it's not just sequential SMT alone. You need to have a news event behind that, you understand? You need to have liquidity, an injection of liquidity, which are literally scheduled. You can see them, you know, weeks before, months before, even years before, because they have to do the same thing at the same time for price, you know, to be what it is. Fractal. There's nothing under the sun like this exact price action will manifest itself, you know, within the 90-minute cycles, which are ruled by the daily cycle, of course. It will manifest, manifest itself, you know, in the fractal cycle. It has, and it will, even higher time frame cycles, and it won't change. And literally, this is just the beginning. Hope that you guys found something, you know, insightful from all of this, and I hope to share more with you next week. Have a wonderful [Music] night. All you want to me is a B. OB session. I am the Mar in tent on burning the stream. How many times can I ask you? How many days can I go without you? We [Music] [Music] [Music] The distance is a kill. [Music] Of how many days can I go without [Music] a [Music] a [Music]