NIGHTLY PATTERNS – Overnight Trading

Where are the intraday stock market edges? When should a trader be long or short?

Well, those aren’t easy questions. Intraday seasonality does exist. You can have a look at the previous quarter of an hour here.

Now, I’m writing down a simpler approach: I’m splitting the the stock market session in 15 minutes different periods and see what’s happening with them. I have data back to 28 September 2009: last 10 years of data exactly. Intraday data are very difficult to handle, that’s why I’m focusing only on the last 10 years.

I’m backtesting the ES future market.

Let’s have a look at this quarter: 9:45 – 10:00 AM EST.

The equity curve below shows a mixed edge. There are sharp up rushes and sharp down crashes. Well, stock markets regimes change over time. They can last for many years, forever, or change quickly to the opposite direction. The change is not easy to detect. This is a very wild quarter of an hour.

If you had traded all those quarters of an hour at 9:45 AM EST blindly, you would have been at break-even (with many heart attacks) going long on ES futures contract, during the last 10 years.

I’ll be back soon with another intraday seasonality study,

Marco Simioni

Nightly Patterns

Where are the intraday stock market edges? When should a trader be long or short?

Well, those aren’t easy questions. Intraday seasonality does exist. You can have a look at the previous quarter of an hour here.

Now, I’m writing down a simpler approach: I’m splitting the the stock market session in 15 minutes different periods and see what’s happening with them. I have data back to 28 September 2009: last 10 years of data exactly. Intraday data are very difficult to handle, that’s why I’m focusing only on the last 10 years.

I’m backtesting the ES future market.

Let’s have a look at this quarter: 9:30 – 9:45 AM EST.

The equity curve below shows a mixed edge. The chart shows a bullish trend during the first 5 years and a bearish trend during the last 5 years. What does it mean? Well, stock markets regimes change over time. They can last for many years, forever, or change quickly to the opposite direction. The change is not easy to detect. Should we bet short? Well, the second bearish trend could be solid enough…

If you had traded all those quarters of an hour at 9:30 AM EST blindly, you would have been at break-even going long on ES futures contract, during the last 10 years.

I’ll be back soon with another intraday seasonality study,

Marco Simioni

Nightly Patterns

Where are the intraday stock market edges? When should a trader be long or short?

Well, those aren’t easy questions. Intraday seasonality does exist. You can have a look at the previous quarter of an hour here.

Now, I’m writing down a simpler approach: I’m splitting the the stock market session in 15 minutes different periods and see what’s happening with them. I have data back to 28 September 2009: last 10 years of data exactly. Intraday data are very difficult to handle, that’s why I’m focusing only on the last 10 years.

I’m backtesting the ES future market.

Let’s have a look at this quarter: 9:15 – 9:30 AM EST.

The equity curve below shows a mildly bullish edge. The chart shows a bearish trend during the first 3 years and a strong bullish trend during the last 7 years. What does it mean? Well, stock markets regimes change over time. They can last for many years, forever, or change quickly to the opposite direction. The change is not easy to detect. Should we bet long? Well, the second bullish trend looks to be solid enough…

If you had traded all those quarters of an hour at 9:15 AM EST blindly, you would have earned about 10% going long on ES futures contract, during the last 10 years.

I’ll be back soon with another intraday seasonality study,

Marco Simioni

Nightly Patterns

Where are the intraday stock market edges? When should a trader be long or short?

Well, those aren’t easy questions. Intraday seasonality does exist. You can have a look at the previous quarter of an hour here.

Now, I’m writing down a simpler approach: I’m splitting the the stock market session in 15 minutes different periods and see what’s happening with them. I have data back to 28 September 2009: last 10 years of data exactly. Intraday data are very difficult to handle, that’s why I’m focusing only on the last 10 years.

I’m backtesting the ES future market.

Let’s have a look at this quarter: 9:00 – 9:15 AM EST.

The equity curve below shows a mildly mixed edge. The chart shows a strong bearish trend during the first 4 years and a strong bearish trend during the last 6 years. What does it mean? Well, stock markets regimes change over time. They can last for many years, forever, or change quickly to the opposite direction. The change is not easy to detect. Should we bet long? Well, the second bullish trend looks to be solid enough…

If you had traded all those quarters of an hour at 9:00 AM EST blindly, you would have been at break-even on ES futures contract, during the last 10 years.

I’ll be back soon with another intraday seasonality study,

Marco Simioni

Nightly Patterns

Where are the intraday stock market edges? When should a trader be long or short?

Well, those aren’t easy questions. Intraday seasonality does exist. You can have a look at the previous quarter of an hour here.

Now, I’m writing down a simpler approach: I’m splitting the the stock market session in 15 minutes different periods and see what’s happening with them. I have data back to 28 September 2009: last 10 years of data exactly. Intraday data are very difficult to handle, that’s why I’m focusing only on the last 10 years.

I’m backtesting the ES future market.

Let’s have a look at this quarter: 8:45 – 9:00 AM EST.

The equity curve below shows a mildly mixed edge. The chart shows a bullish trend during the first 6 years and a strong bearish trend during the last 4 years. What does it mean? Well, stock markets regimes change over time. They can last for many years, forever, or change quickly to the opposite direction. The change is not easy to detect.

If you had traded all those quarters of an hour at 8:45 AM EST blindly, you would have been at break-even on ES futures contract, during the last 10 years.

I’ll be back soon with another intraday seasonality study,

Marco Simioni

Nightly Patterns

Where are the intraday stock market edges? When should a trader be long or short?

Well, those aren’t easy questions. Intraday seasonality does exist. You can have a look at an example study here. This analysis goes back to 1997 and stops at 2015.

Here I’m writing down a simpler approach: I’m splitting the the stock market session in 15 minutes different periods and see what’s happening with them. I have data back to 28 September 2009: last 10 years of data exactly. Intraday data are very difficult to handle, that’s why I’m focusing only on the last 10 years; there’s enought evidence on the study mentioned above of the other years more back in the past stock market behaviour. I’m backtesting the ES future market.

Let’s have a look at this quarter: 8:30 – 8:45 AM EST.

The equity curve below shows a mildly bearish edge. 

That’s an edge, nothing more. You cannot trade it alone, but whatever intraday systems you’re dealing with, it’s worth considering.

If you had traded all those quarters of an hour at 8:30 AM EST blindly, you would have lost about 8% on ES futures contract during the last 10 years.

I’ll be back soon with another intraday seasonality study,

Marco Simioni

Nightly Patterns

I am pleased to announce new auto-trading service for Nightly Patterns!

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The first trader approaching this new service will benefit from reduced starting commission and a first free month subscription.

If you are interested in auto-trading Nightly Patterns trades, just write me at:

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Marco Simioni

“It’s all about imperfect simmetry.”

Let’s go on. You can read the previous article here.

Is the big broadening pattern going to be completed with a big fall down at least to 2200 or 2100 price zone of the Emini future?

Well, it’s not easy to answer the question. But there’s another interesting pattern forming right now: it’s a perfect rising head and shoulder. You can see the blue neck line at 2810 price zone.

That’s a tremendous reaction price zone. I circled in blue all the time that zone has been tested, both rising from below and falling from above. That price zone is a key level.

I added 4 blue vertical lines to outline the lows of the head and shoulder formation. When the 2 lows width is similar, the odds the head and shoulder triggers are very high. That’s the case, as you can see from the picture.

Are stock markets in troubles? Yes.

We have a US Presidential Impeachment procedure starting, monetary markets problems on Repos with the Fed pumping billions of dollars to keep equilibrium and all the big problems I mentioned in the previous article…

I could be wrong… It’s not easy to time the tops. Let’s see.

That’s all folks!

Marco Simioni

Nightly Patterns

Stock markets are in trouble.

My view on the markets outlined here, was confirmed on August with Treasuries yield curve inversion. This is a very old and effective recession forecaster. Another good ingredient for our stock market crash recipe.

Another great trader, Sven Henrich, explained current stock market pattern in one CNBC interview:

On that interview, he shows my same view on the stock market. It looks great!

Another trader, Banana3 on Stocktwits, strongly argues against Sven’s and mine forecast.

Basically here’s his theory:

From his perspective, we should see a third break and up trend.

Well, it looks like both previous instances broke up. As this pattern can break up or down, I think the third time is the right time. That’s where the stock market waits for us for breaking down.

Marco Simioni

Nightly Patterns

“Nobody cares about the monthly bar chart.”

If we look at the monthly chart above we can clearly see how from the current stock market top (Emini chart) of 3029.5 to 2007 high of 1586.75 and 2000 high of 1574.25 there’s about 50% difference (calculated on last market high of 3029.5).

Why should we see the market down that far?

Well, there are 5 great technical and fundamental reasons:

1 – The most strong support in the monthly chart is on those 2 great monthly highs mentioned above (it took 13 years to break that resistance, from March 2000 to May 2013).

2 – The trend line that starts from 2009 lows and had been touched in 2011, 2016 and December 2018 should be broken. Nearly all trend lines must be broken in technical analysis. This is a tremendous attraction factor.

3 – 50 day SMA must be broken someday. This is another tremendous attraction factor.

4 – There’s a great broadening pattern forming since January 2018. This should trigger the next big market movement.

5 – RSI5 indicator has a very steap bearish triple divergence triggered. Odds that these divergences break up are very little as we would need a steep long RSI5 trend like that one from October 2016 to January 2018. That’s too recent for the start of another one.

6 – Looking at fundamentals, S&P500 stocks are at least 30% overpriced. 20% more downside potential need to creat an oversold stocks regime.

7 – Last, I think the world entire stock and bond market is already in the Krugman’s liquidity trap. Why should the Fed cut rates while the stock market has been collecting new highs month by month? With future negative interest rates and quantitative easing back on our shoulders, I think at the end we shall see the famous Fridman’s Helicopter Money in action…

I could be wrong… It’s not easy to time the tops. Let’s see.

That’s all folks!

Marco Simioni

Nightly Patterns