Reviewing High Resistance Liquidity Run Conditions - July 21, 2026 transcript

Hey, folks. Welcome back. So, just a brief little review. See if we can get this done about 10 minutes or less. So, we're looking at the 1-minute chart on Nasdaq for September delivery 2026. Uh just a real quick bit of housekeeping. You can see the price from Monday and then today. Okay. So, I'll get into the business here. We got a very large premium relative to settlement price here to here, rather large. Like 450 handles or thereabouts.

Um which is irrespective. And this is consequent encouragement of that gap. So, we're looking at regular trading hours. Now, we're going to electronic trading hours. And we'll zoom in to this morning. All right. And I spent a little bit of time with Caleb today explaining some of the things I was looking for. What I teach him is to aim for this right here. So, half gap relative to the regular trading hours opening range gap.

So, if we have a respectable amount of range, the initial bias for his session, which is the first hour of trading, he's looking for in this case shorts. It doesn't mean he's going to be right every single time. It's just I'm giving him something that doesn't require a whole lot of thought process, not a lot of decision-making. He's not going to argue and wrestle with it. We We got significantly higher than where we settled yesterday in regular trading hours.

So, start the session off looking for shorts. It's It's just that simple, folks. Okay? We're not complicating it. We're just simply looking for something that's going to give him a reasonable assumption to go higher or lower. And that's it. Then simply waiting for key PD arrays to be traded to. Uh the hourly buy side imbalance sell side inefficiency, which I've been using for the last few days. Um The reason why it's important is number one, it's an hourly chart.

And it's part of an old swing low in price action on the hourly chart. And if you look at that Wednesday noon Eastern time buy side imbalance sell side inefficiency, as you see in these prices here. >> [sighs] >> It's the most obvious little reference point than not just simply looking at old lows broken become resistance. Cuz I'm not a support resistance trader. Okay? Just like I'm not a supply and demand trader. Just like I don't use volume profile and all these other things.

Footprint, all that. So, the market ran up into this at 9:30. Uh I went short looking for this and then looking for these relative equal lows right here. So, again, annotate that. And then the best case scenario is to see if it can gravitate down into half gap. So, consequent encroachment of regular trading hours opening range gap. That says bias to draw towards that. What happens if he opens up and he has like a 10 or 15 handle separation from where the opening price is?

And it's a gap higher. And then the gap consequent encroachment or midpoint of the gap is only like 15 handles below the opening price. He doesn't trade. Pretty easy, isn't it? Pretty easy stuff, right? So, you want to see a large enough gap to ferret out at least 20 handles, 30 handles, something like that. And if he does it wrong and only gets half, you know, 15 handles is 15 handles, right? It beats a job. So, the opening price here, after it runs up into it, um Let's maximize this here a little bit.

Take better use of the real estate here. And then we'll go into the executions again. So, as we are pumping up into that, we're leaving a body below the low of the last Wednesday's buy side and balance sell side efficiency at noon Eastern time. The bodies were not being left in that. And when we sent it up here like this, notice that it stopped short here. The wick touched it, and then we opened, rallied up, and started coming back down.

Okay, look where my fill was. Right in here. So, what it was done what it has done rather, it opens, goes up, and then overlaps that opening price. And trades below it. So, right there's my fill. Stop goes above it. Right here. We break down, and this is a gap that I mentioned in the lecture with my son, but his first gap would be here. Now, why this one? Okay, well, we have a swing low here. It breaks lower, and it's in the direction of his model calling for mid gap of regular trading hours opening range gap.

So, consequent encroachment of the regular trading hours opening range gap, that is his draw. It must be enough of a range between the opening and consequent encouragement to warrant at least 30 to 40 handles. That way if he gets in a short or gets in a long if it's the other side of that expression he might be able to ferret out, you know, 10 or 15 handles and if it turns on him stops him out and you know, he's he's doing about 300 bucks per mini contract.

So, it's not bad. So looking at this as the first percent of fair value gap. We'll come back to that in a minute. There we got stopped out on that one contract there. And then because it hit this I figured okay, it's going to go now for the low here and then those relative equal lows they're highlighted again over here. So, right there. So, I re-entered the short. Traded lower. Took one off in here cuz I felt like we could have easy ran over top of this cuz this is the first percent of fair value gap the real one, okay?

So, if we traded above that then it could have acted well like it did over here and here. But here I took one off and then it went lower and it finally came back and stopped me out which I said it was likely to do that because these relative equal highs and all these attempts to go lower and just simply not seeing the the follow through. We've done enough with the bodies here going below this swing low. That is problematic.

And then like I said, if I was making the market, I'd come back up, run those highs out, and then sink it below those relatively equal lows I was targeting. And I said in the lecture to Caleb, I said, you know, that that's unfortunate cuz it would take out my trade, but I'm just telling you how I would do it. And then Phil >> [laughter] >> came up here and did that very thing. So, it's probably lucky guess. You know, it's probably you know, just me you know, talking about something hypothetical, and it just so happened to happen.

Okay, so we'll just strike that up as luck, right? So, the market rolls over, and I went back in again trying to get that run in here. And uh that stopped there. Right there. And then went in again. And then closed it out right at the low. Okay, so um I mitigated a little bit of drawdown and couple thousand dollars of effort shown there. Very difficult very difficult to navigate all this in here. And it's actually as as I mentioned to Caleb, it's very beneficial for you to have watched that.

And I knew that YouTube is monkeying with the the video and the audio. I'm I'm being plagued right now by all kinds of things that I know, obviously. You know, one could say, well, it's just coincidence. But there's so many things standing in front of me when I'm trying to teach these things to you. When I'm showing you the logic, and it's meant for me to get tired and say, it's not worth it. I'm not going to do this anymore.

Uh I'm just not built like that. >> [laughter] >> This this makes me want to do more of it. So, there'll be more videos. There you go. So, when we were in here, I said that this could potentially become an inversion fair value gap and then maybe gravitate back up into here and here. But, if it does that, I'm not so certain at that moment where it would go from there. So, Caleb and I left the the charts and he went and did his thing for the rest of the day and I did my thing with my wife and pups.

So, here is the aftermath of all that. We never went down into half gap. So, we got higher, small little retracement. Work higher, first presented fair value gap. Why? Because this is displacement below that swing low right there. Okay? And it is not 9:30 scandal, which is what I gave a rule to Caleb. He can't use the 9:30 candlestick if there's a gap there like this, even though I mentioned it this morning. This is the one you would use.

Or he would use rather. I don't want to say it's your model, it's my son Caleb's model. So, this is first utilization and sell-side delivery. That means if it's bearish, it should send price lower. But, if it ever overcomes that to the upside, then it becomes a bullish inversion fair value gap. And we transition to here and then here. And then we rally up into consequent crucial of the 1-hour buy-side balance sell-side inefficiency from last Wednesday at noon Eastern time.

Falls short of just getting to the high of it. We gravitate directly around midpoint. Consequent encroachment hits the high of it. Focus is head outside the high. And then just spends a little bit of time in here just above it. Very, very, very difficult very difficult uh time to do anything in here of of any significance for trading. When it's doing this, you just got to leave it alone, folks. Just leave it alone. And ultimately move back down inside.

We're at the halfway consequent encroachment level again. All of this is price action I would not be participating in. And then back up to the high here. So, where does that leave us? Well, I think that there's a bit of liquidity in the form of relative equal highs above us in several locations, and I mentioned them in the previous lectures. So, I'll just basically say overnight we could come back down in and revisit the opening range from today.

And that's this here from Monday's regular trading hours settlement price at 4:14 p.m. Eastern time to 9:30 a.m. Eastern time on Tuesday. That gap, okay, we could come down a little bit, work inside this gap one more time. If we start to go higher overnight, that warrants potentially looking for continuation tomorrow. And that's a loose expectation or bias for me right now. Um there's no telling what they're going to do overnight.

They could be doing something really crazy over there in the Middle East. And then then then they use that as a catalyst to make the market, you know, crush anyone that's already positioned. So, we're basically we're on a wait-and-see type thing. Uh here's new day opening gap. We settled where we opened. Okay, so keep that on your chart. And we'll get back at it again Lord willing tomorrow for Wednesday. Until I talk to you then.

Be safe.