This is a textbook example of intramarket confluence on the 15min timeframe. I spotted this event during a live moderating session last year (2005) in the big room. What is important to notice in this case study is the obvious downtrend in the top 4 charts (YM, ES, ER, NQ). Take note on each of these US equity index futures charts the clearly defined downtrend signified by 9 or more bars below the zero line, well before the ZLR occurred on each instrument. Looking back, the easiest ZLR pattern to trade occurred on the ER, due to the hard CCI hook right at the zero line, followed by the TCCI (turbo CCI) vertical move through the zero line, just behind the 14 period CCI. Not surprisingly, the NQ (which trades very closely to the ER), is the next best ZLR setup in this particular case study. Also notice the broad intramarket (US market) confluence across this 15min event. Now, the broad global intramarket confluence is defined here by the action of the QM, which has been dominant of late as a market force (inversely related) to the US equity index futures. Notice the QM (bottom chart) in a clear uptrend as defined by the action of the CCI above the zero line. As I observed these charts in real-time, I was able to predict the selloff that was to come in the US markets, accompanied by (or as a direct result of) the rally the was about to occur in the QM. In summary, utilizing broad market CCI data can help a trader to predict market direction as well as help in the timing of the trades.

It is easy to become enamoured with confluence plays as they present an opporunity for swing setups. Since swing setups present an opporunity for larger gains, they present an equal opportunity for large losses. Be diligent in using your stops when playing confluence setups.

Disclaimer: THERE IS EQUAL OR GREATER POTENTIAL FOR LOSS WHILE USING THIS STRATEGY. All information, graphs and depictions represented in this site are OPINIONS and HYPOTHETICAL PERFORMANCE RESULTS and should be recognized as such and are not solicitations or instructions to execute orders. You shall be responsible for any decision to purchase and/or sell any of the futures products depicted herein. Although, the information herein demonstrates the potential for profitable trades, the potential for loss is just as equal due to unforeseen circumstances and changing market conditions. You must also realize that the indicators and strategies may not work in the future and can be used to your detriment. The amount of profit demonstrated in my trades may be entirely different than yours even if the trades were entered and exited at the same time. Differences in commissions, fees, and internet connectivity can drastically alter your performance in comparison to what is depicted in the charts and could possibly result in a loss.