Each morning, hours before the New York open, I produce the Mastermind Community (MC) Supply and Demand levels (market turning points). These levels help MC members determine where banks and institutions are buying and selling. This way, MC members can buy and sell where banks and institutions do. Most of my analysis when producing these levels takes place during the later stages of the London session. Often, while I am planning out levels for our students to take once the New York open happens, other opportunities arise that develop during the London session and that is the focus of this piece.
Above is a picture of the MC Supply/Demand levels from April 3rd along with two charts showing what happened later that day and the next. The S&P chart (lower right) represents an opportunity that comes up very often. Notice the yellow shaded area on the chart. Price was basing sideways and then it declined from that level telling us supply exceeded demand at that level. This all happened during the London session. What I did and often do is mention this in the “Daily Market Overview”. This opens up an opportunity for us to sell short once price rallies back to that price level where banks and institutions are selling S&P’s. Again, this scenario happens many times in a week which is why I am bringing it to your attention.
The NASDAQ chart shows the high of the day that day, right into our pre-determined supply level seen on the grid. Price traded into our level and collapsed. The institution supply level itself was from 2001, more than 10 years ago. Using proper supply and demand analysis and the key Odds Enhancers, we are able to determine where banks and institutions are buying and in this case, selling the Equity Index markets, even if we have to look at data from more than ten years ago. For more information on this specific topic, please reference Long Term Levels.
The key to identifying what bank and institution supply and demand look like on a chart means understanding all the Odds Enhancers that point us to those levels. The Asia and London sessions offer many of these levels once you know what to look for. If this is all new to you, I would be careful and keep it simple and focus on the key levels produced during the later stages of the London session, meaning a few hours before the New York open. Price declined in our opportunity above once it reached our supply and that worked out nicely. However, had you been looking at US day session only charts, you would have NEVER seen that supply level. Some might look at that chart and say “it’s an overnight level,” suggesting it’s not good. Keep in mind that what may be an overnight level in the US is a day session level somewhere else.
The point of this article is to share a very high probability, low risk, and high reward opportunity that presents itself often, in hopes that you can benefit from it as well.