Last Friday’s price action showed us the power of the top of the daily profiles for the ES, NQ and RTY. The NQ made a round trip, meaning that its tested both the top and bottom of its daily profile. Also shown on these charts are the current trend lines which can act as resistance on a move higher. The NQ has not closed above the top of its daily profile for two consecutive sessions since August 16th and therefore a signal of trend change would be two consecutive closes above profile.

In summary, the ES and NQ are both consolidating within profile and even though both have bottom patterns, resistance must fail to suggest a change in trend is upon us.

As of 6:56 a.m., equity markets are rallying and it’s the 2-hour charts that show TD9 bottom patterns for the ES, NQ and RTY. Price is targeting the top of their profiles and a close above these resistance areas would suggest a further rally is likely.

From time to time, different systems generate different profile levels. The white background chart (NinjaTrader chart) shows the top of the ES profile at 3647.80, whereas the black background chart (eSignal) shows the top of its profile at 3707.10. When differences occur, we use both figures.

TAS profile market breadth for the 30-minute time frame is bullish for the S&P and NDX 100, whereas TAS market breadth for the 60 & 240-minute time frames have bearish crossovers as do the daily and weekly time frames (shown in the newsletter below).

The 30-minute equity futures charts show that price is trading above profile and without topping patterns, a further rally is likely.

Each of the 60-minute equity futures charts show that TD9 tops may form by 10 a.m. Price will need to take out its current high of the day by then to potentially generate these patterns.

As to a long trade in the mining sector, both the daily and weekly GDX charts have confirmed RMI bottoms, but what is really needed is for Gold to close above its weekly OUL for those signals to gain traction.

Terminology used throughout the newsletter and what it means: Note: you have access to workshops on your members page that also review in detail the terminology used within the newsletter.

Chart legend : The red/green line is the Oscillator Unchanged Line. A green line means that the Price Oscillator (the difference between the 19 & 39 day EMA) is above zero and when the line is red, it means that the Price Oscillator is below zero. When price is above a green OUL, it is a bullish condition and when price is below a red OUL, it is a bearish condition. When price is below a green OUL, it suggests a retracement back to support and when price is above a red OUL, it suggest a countertrend rally to resistance.

Black number are TD9 Setup counts. A 9 count indicates an impending trend change may be near. The red and green lines are the TD9 breakout support (red) and breakdown resistance (green) levels that define important trend reversal price levels.

Black diagonal lines on a chart represent Rhodes Momentum Indicator signals. When these lines are present at a bottom, it tells us that price has taken out a prior low with less relative weakness and therefore, a bullish reversal candle is what we use to identify a bottom. RMI signals that are present at a top let us know that price is moving higher with less relative strength and a bearish reversal candle would confirm a top.

TAS Market Profiles are represented by the black dash line. The top of a profile is where sellers are located and the bottom of a profile is where buyers are located. The center line, is the price point that both buyers and sellers believe is fair value within the range of the top and bottom of its profile. When the center line is closer to the bottom vs. the middle of the profile, the market profile is bullish in structure whereas a center line that is closer to the top vs. the midpoint is a bearish structured profile. A bullish structured profile simply lets us know that buying should occur between the center and the bottom. The opposite is true for a bearish structured profile.

A ”buy the D point pattern forms with an AB=CD down pattern that gets confirmed with a bullish reversal candle.

A ”Sell the D point pattern forms with an AB=CD up pattern that gets confirmed with a bearish reversal candle.

Bullish and bearish reversal candles are represented by Japanese candlesticks of which we use seven specific patterns. Bullish reversal candles include the Hammer, Bullish Engulfing, Piercing, Bull Sash, Bull Seperating Line, Rising Window (gap up) and the Morning Star pattern. Bearish reversal candles use the exact opposite which include the Shooting Star, Bearish Engulfing, Dark Cloud Cover, Bear Sash, Bear Seperating Line, Falling Window (gap down), and Evening Star pattern formation.

Many of our pattern signals come from futures charts. The S&P 500 is represented by the ES mini. The Nasdaq 100 is represented by the NQ. The DOW equity futures chart symbol is YM and the Russell 2000 futures symbol is RTY.

A market overview as of 6:42 a.m.

The daily ES chart shows a confirmed “buy the D point” and RMI bottom pattern with price consolidating within its daily profile.

The spot VIX index remains above its 50-day EMA, which is a bearish directional signal for the S&P 500.

The daily ES chart shows a confirmed “buy the D point” and RMI bottom pattern with price consolidating within its daily profile.

The daily YM chart shows a “buy the D point” and RMI bottom. A close above 30513 would signal a move to 31256.

The daily RTY chart shows a confirmed TD9, “buy the D point” and RMI bottom pattern that has led to a consolidation within its daily profile.

The U.S. dollar index has formed a RMI top with price consolidating within its daily profile.

The daily Gold chart shows a TD9 and RMI bottom with price consolidating within its daily profile.

The daily Silver chart shows a confirmed “sell the D point” pattern with price consolidating within its profile.

The daily Copper chart shows a TD9 bottom with a consolidation within its daily profile and its TD9 breakout and breakdown areas.

The daily Crude Oil chart shows a TD9 top with price testing its OUL. A close below 84.94 would signal a move to 78.36, its TD9 breakout area.

The daily Natural Gas chart shows its confirmed “buy the D point” pattern may fail today which would signal lower price.

The daily chart for T-bonds shows a RMI bottom signal that needs a bullish reversal candle to confirm a “buy the D point” pattern.

In overnight trading,

Markets in Asia were mixed last evening:

The Shanghai index has a “buy the D point” pattern and with price above its OUL, a further rally is likely.

The Hang Seng needs a bullish reversal candle to confirm a RMI bottom.

The Nikkei 225 has a confirmed “buy the D point” pattern and with price back above its OUL, a further rally is likely.

Markets in Europe are trading higher as of 6:06 a.m. this morning:

The FTSE needs a bullish reversal candle to confirm a RMI bottom. A close above its OUL will suggest that a further rally may unfold.

The DAX has a TD9 and wave 7 (g) bottom pattern with price trading above its OUL which suggests a run for its recent high.

Major currencies shows that as of 6:14 a.m.:

The U.S. dollar index has formed a RMI top with price consolidating within its daily profile.

The euro has confirmed a RMI bottom pattern with price oscillating near its OUL and is not providing us with a clear signal.

The Yen will complete a TD9 top today but with price above its green OUL, conditions are neutral.

The Great Brittish Pound has formed a TD9 and “buy the D point” bottom and with price above its OUL, a run for its TD9 breakdown area may unfold, 1.1549.

The Canadian dollar has formed a “sell the D point” pattern.

The Sweedish Krona has a completed TD9 top which should gain traction as long as price remains below its green OUL.

The Swiss Franc has formed a TD9 top but with price above its green OUL, its overall signal is neutral.

U.S. equity futures are trading higher as of 6:18 a.m. this morning:

As of 6:19 a.m., the ES mini charts show:

The monthly chart shows that a TD9 bottom pattern may form at the end of October.

The weekly chart shows a confirmed RMI bottom as a result of its “key reversal” candle session two weeks ago.

The daily ES chart shows a confirmed “buy the D point” and RMI bottom pattern with price consolidating within its daily profile.

As of 6:21 a.m., the NQ charts show:

The monthly is trading below TD9 breakout support, which brings its next TD9 support level into play, 7427.50. That being said, October could generate a TD9 bottom pattern.

The weekly chart shows a RMI signal that needs a bullish reversal candle to confirm a bottom. A TD9 bottom may form this week.

The daily NQ formed a RMI and “buy the D point” pattern last Thursday with price consolidating within its daily profile.

As of 6:24 a.m., the YM charts show:

The monthly chart shows an AB=CD down pattern in progress.

The weekly chart shows a confirmed RMI bottom with price targeting its OUL.

The daily YM chart shows a “buy the D point” and RMI bottom. A close above 30513 would signal a move to 31256.

As of 6:26 a.m., the RTY charts show:

The monthly chart shows a TD9 bottom that remains in place.

The weekly shows RMI bottoms but price needs to close above its OUL to suggest that this pattern gains traction.

The daily RTY chart shows a confirmed TD9, “buy the D point” and RMI bottom pattern that has led to a consolidation within its daily profile.

When it comes to market breadth as of 6:29 a.m.:

TAS market breadth for the NQ shows bearish crossovers for all four time frames.

TAS market breadth for the ES shows bearish crossovers for all four time frames.

Above are the TAS market breadth indicators for the sectors that make up the S&P 500.

This link provides further explanation of the speed dials & the meaning of their percentages

In summary, the wheel of the odometers represent:

1. The percentage of the market that is bullish, trading above profiles (resistance) for its time frame, represented by the amount of green on the dial.

2. The percentage of the market that is neutral, trading between profiles (support & resistance) for its time frame, represented by the amount of blue on the dial.

3. The percentage of the market that is bearish, trading below profiles (support) for its time frame, represented by the amount of red on the dial.

4. The percentage displayed within the dial represents the net percent of bulls vs. bearish. If 50% of the TAS profiles are bullish and 20% of the TAS profiles are bearish, then the percentage in the speed dial would be 30%.

The NYSE Advance/Decline Oscillator remains below its zero threshold level indicating that sellers are in control of the general markets.

The spot VIX index remains above its 50-day EMA and therefore sellers are in control of the S&P 500.

In the commodity space as of 6:31 a.m.:

As of 6:32 a.m., the Gold charts show that:

The monthly chart shows that price is trading into its bullish structured profile support area.

The weekly chart has a “buy the D point” pattern which will only get traction with a close above its red OUL.

The daily Gold chart shows a TD9 and RMI bottom with price consolidating within its daily profile.

As of 6:33 a.m., Silver charts show:

The monthly chart needs a bullish reversal candle to confirm a “buy the D point” pattern.

The weekly chart shows a RMI bottom that has led to a consolidation within its profile.

The daily Silver chart shows a confirmed “sell the D point” pattern with price consolidating within its profile.

As of 6:34 a.m., Copper charts show:

The monthly chart shows that price may be targeting the 2.42 area.

The weekly chart shows that price is consolidating within its profile.

The daily Copper chart shows a TD9 bottom with a consolidation within its daily profile and its TD9 breakout and breakdown areas.

As of 6:35 a.m., the charts for Light Sweet Crude show:

The monthly chart shows that price is trying to regain its green OUL which would be a bullish outcome.

The weekly chart shows a confirmed “buy the D point” pattern with price consolidating within its daily profile.

The daily Crude Oil chart shows a TD9 top with price testing its OUL. A close below 84.94 would signal a move to 78.36, its TD9 breakout area.

As of 6:39 a.m., the chart for Natural Gas show:

The monthly chart has an RMI top and a close below its OUL would suggest lower price.

The weekly chart has a RMI top with its recent low being a target.

The daily Natural Gas chart shows its confirmed “buy the D point” pattern may fail today which would signal lower price.

As of 6:13 a.m., soft commodity charts show that:

Wheat is consolidating wtihin its daily profile as well as trend line support and resistance.

Soybeans have a TD9 bottom with price consolidating within its daily profile.

Corn is consolidating within its daily profile.

Coffee has formed a larger AB=CD down pattern which needs a bullish reversal candle to confirm a “buy the D point” pattern.

Sugar has a RMI bottom and with price above its daily profile, a further rally is likely.

Cocoa has a confirmed RMI bottom with price consolidting within its daily profile.

As of 6:16 a.m., the chart for the 30-year Treasury Bond show:

The monthly chart has completed a TD9 bottom pattern which suggests a run towards its OUL.

The weekly chart needs a bullish reversal candle to confirm a RMI bottom. A TD9 bottom pattern will complete this week.

The daily chart for T-bonds shows a RMI bottom signal that needs a bullish reversal candle to confirm a “buy the D point” pattern.

Disclaimer: Trading in securities such as stocks, options, indexes, currencies, and futures involve risk and should not be undertaken without due diligence and serious independent study. Options, stocks, currencies, and futures trading, involve substantial risk. Subscribers may carry out their trading based on what they learn from “Mastering Probability” however all risks of potential financial losses are the customer’s responsibility. TFNN, Corp. and/or Steve Rhodes will be in no way liable for financial losses resulting from trading decisions based on this newsletter. Past performance is no guarantee of future results. Reproduction in whole, or in part, is not permitted without prior written consent. Copyright 2022 all rights reserved.