MarketWebs Value Areas, Or: Would you Believe (/ES) 1808.50? September 5, 2015 But Web, CNBC hasn’t mentioned this level….

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MarketWebs Value Areas – Why? I lost a lot when I began trading, and here was my problem: I was trading using trend-lines, moving averages, indicators, etc. But I was getting chopped up regardless. What was I missing? What didn’t I understand? I set out to find the “Why?” Why would the stock rally from here? Why would it sell off from here? I didn’t want to know on a fundamental basis, I wanted to understand on a technical basis…. But the answer wasn’t out there. It required creating something new… So expanding on some concepts created by the S&P traders in the 80’s, I came up with the MarketWebs. I could use the wisdom of the crowd (ie: the market) to give me forward looking information about where price was most likely to go. I knew where the most likely support/resistance reversals would be, when everyone else was simply scratching their heads. I knew where the best set-ups were on a day trade or swing trading time frame. I knew what the market had determined to be the “value” of what I was looking at in the previous time frame (Yesterday, Last Week, Last Month, Last Year) and it gave me a tradeable guide based on that information.

MarketWebs Value Areas – Why? I took my charts that looked like this, and made them not only easier to read, easier to trade, more telling for the future.

MarketWebs Value Areas MarketWebs Value Areas: The components: Resistance Venom Line 2 Resistance Venom Line 1 Value Area High (VAH) Sell Signals Point of Control (POC) Developing VAH Value Area Low (VAL) Buy Signal Support Venom Line 1 Developing POC Support Venom Line 2 Support Venom Line 3 Developing VAL Developing Market Profile Support Venom Line 4

MarketWebs Value Areas Day trading with the setups (AAPL 5min, Wednesday 3/18/2015): Take Target Jan Value Area Take Target Short on Break into Value Dec Buy on break at Value High Take Target Feb Break above value, still bullish. Value Area Inside Value, fade extreme Reverse direction at value area low Bullish break above value

MarketWebs Value Areas Swing trading the daily chart: (/ES Daily, Friday 3/20/2015): Take target Take target Jan Value Area FOMC Announcement Predicted Move? Buy on break above value Buy at Value Area Low Dec Feb Break above value, still bullish. Buy at Value Area Low Value Area Bullish break above value

Value Area – The Concept In “A Random Walk Down Wall Street”, Burton G. Malkiel wrote (as a proponent of the efficient-market hypothesis) that the movement of a stock was no more predictable than the flipping of a coin. Therefore a stocks price movement was 50/50 up or down at any given moment. He believed he had proved this by charting the flipping of a coin and convincing technical analysts that they were looking at an actual stock. He did however note one thing, that in general the “coin” (ie: the market) was flawed and had a tendency, over large occurrences (ie: time/trades) to favor the Up side 52% of the time… To me, if a system isn’t perfectly 50/50 then there is something to be discovered... So what is there to discover? Well, simply: the Market is not a coin-flip, but rather the Market is a crapshoot… (in a good way) The market is not simply A or B (like flipping a coin), it is any number of combinations (like rolling two dice). We know the odds of heads/tails are 50/50 What are the odds of rolling a 7? What are the odds of rolling a 2 or 12? 2 3 4 5 6 7 8 9 10 11 12 3+4 3+3 4+3 4+4 2+3 2+4 2+5 3+5 4+5 2+2 3+2 4+2 5+2 5+3 5+4 5+5 2+1 3+1 4+1 5+1 1+6 2+6 6+3 6+4 6+5 1+1 1+2 1+3 1+4 1+5 6+1 6+2 3+6 4+6 5+6 6+6

Value Area – The Concept To take this further, think of the two dice as both sides of the trade. One dice is the buyer, one is the seller. Dice equivalents (for 1st Dice; Invert Entries/Exits for 2nd Dice on other side of trade): 1 = Long Term Trader (~1month or more) looking to Enter a Position 2 = Medium Term Trader (~1week-1month) looking to Enter a Position 3 = Short Term Trader (intraday) looking to Enter a Position 4 = Short Term Trader (intraday) looking to Exit a Position 5 = Medium Term Trader (~1week-1month) looking to Exit a Position 6 = Long Term Trader (~1month or more) looking to Exit a Position Remember, entries and exits can easily be buy or sell trades, it doesn’t matter. The longer-term the trader, the less important entry/exit price is… These are outlier trades! A metaphorical 2 or 12 only happens when two Long Term traders meet. 3 or 11 only happens when a long term trader meets a medium term trader. The more frequent trades occur near the middle where all time frames (including the short timers) have reason to trade. Excluding 2,3,11,12 leaves us with 1 Standard Deviation of the trades… 2 3 4 5 6 7 8 9 10 11 12 3+4 3+3 4+3 4+4 2+3 2+4 2+5 3+5 4+5 2+2 3+2 4+2 5+2 5+3 5+4 5+5 2+1 3+1 4+1 5+1 1+6 2+6 6+3 6+4 6+5 1+1 1+2 1+3 1+4 1+5 6+1 6+2 3+6 4+6 5+6 6+6

Value Area – The Concept $110 – Sellers are eager to sell, but buyers aren’t around, if they want to sell at all they have to reduce their ask VALUE AREA HIGH $105 – Sellers are happy to sell, but buyers are starting to taper off, sellers may have to reduce their prices from here POINT OF CONTROL $100 – Everyone on all time frames is very content at this price to buy/sell VALUE AREA LOW $95 – Buyers are happy to buy, but sellers are starting to taper off, buyers may have to pay up from here $90 -- Buyers are eager to buy, but sellers aren’t around, if they want to buy at all they have to increase their offer

Value Areas & The Auction Market - A Real World Example By knowing the car’s “value area”, I know: what everyone else bought it for, what’s a good price, what’s a steal, and at what price I’m the sucker at. But also knowing the value area, I can recognize when the price is outside of range and more actively participate in price discovery: Below value: How low can I buy it for? I’ll wait to find out. Above value: How low can I buy it for? How high will the price go? I can’t wait, but the seller can! 70% of Range Value Area Low Point Of Control Value Area High Price Discovery Zone: Best Trade Price Unknown “Do I hear 30…25…20…15…?” Price Discovery Zone: Best Trade Price Unknown “Do I hear 40…45…50…55…?” Buyer Wins Seller Wins

Trading The Auction Discovery (Auction) Zone Value area on stock charts works the same way. Volume is charted on the Y Axis and a profile is created. 70% of the profile is the value area. “Do I hear 60…65…70…75…” Discovery (Auction) Zone Buyers In Control, Sellers Step Away Price Value Area High Sellers In Control Point of Control Fairest Price to Do Business Buyers In Control Value Area Low Sellers In Control, Buyers Step Away Time Discovery (Auction) Zone “Do I hear 50…45…40…35…”

B – Buy A – Above S – Sell B – Below O – Or W – Wait W - Within Trading The Auction The Trading Plan: Participate in Price Discovery (Auction) Zones B – Buy A – Above S – Sell B – Below O – Or W – Wait W - Within I wait for breaks of the value area, I buy on a break above, I short on a break below. And I am cautiously watching/waiting when inside value. Price Volume Time

MarketWebs Value Area for Predictions Where’s the market headed?: Below value for month of September First venom line is the first target, 1850.50 Bullish break above value

MarketWebs Value Area for Predictions Did Crude Really Find a Bottom??: Resistance at top of value for month of September Value area low for the month at 41.34. Bullish break above value

$199 Or Call 312-261-5581 The MarketWebs for ToS: **Limited Availability Offer – only 35 spots available!** Automatically drawn value areas from the previous time frames.: $299 Value Yearly, Monthly, Weekly, and Daily Value Areas Visual and Auditory Buy/sell signals based on your own trading style: $299 Value conservative, aggressive, caution-to-the-wind. Long/Short targets for day/swing trades AND dynamic stop loss markers! $299 Value Works for ALL Equities and ALL Futures! BONUS: 6 Hours of Video Mentoring & PowerPoint Slides for Reference: $1499 Value Learn the BASBOWW trading system on all time frames. Learn the best set-ups for trades based on value areas. Learn the details of how Value trading works and how to read the charts Learn how to read market profile in addition to value area for proficient day-trading. Learn how to read value areas to predict future price movement. Learn how best to use value areas to your advantage for trading on all time frames. Not a subscription! One time purchase, you’ll receive all updates for free! No refunds, once you buy it you own it for life! Total Value: $2396 KOTM REGULAR PRICE: $999 Over 80% Discount Today Only! http://alphashark.com/marketwebs/ Special 2015 Market-Crash Offer $199 Or Call 312-261-5581

MarketWebs Value Areas – Inside Value Setups Starting the globex and regular trading inside of value Value Area High (VAH) Point of Control (POC) Value Area LOW (VAL) Doesn’t touch VAL in regular trading, this is info to carry forward /ES – Aug 14th 2015, pre-market globex & regular trading

MarketWebs Value Areas – Inside Value Setups Starting inside of value: The market “knows” this range. Therefore, best risk/reward trades are: Short at Value Area High (VAH) with stop above, target POC Long at Value Area Low (VAL) with stop below, target POC Price can go anywhere from POC, not good entry price. A full exploration of the value area (top to bottom, bottom to top) is only likely to happen ONCE per time-frame. (For futures, this means once in globex and once in regular trading hours) Value Area High (VAH) Point of Control (POC) Value Area LOW (VAL)

MarketWebs Value Areas – Outside of Value Setups Value Area High (VAH) Point of Control (POC) Value Area LOW (VAL) OIH – Aug 19th 2015, regular trading

MarketWebs Value Areas – Outside of Value Setups Value Area High (VAH) Starting below value: When the market opens below the “known” range, we are in an auction market. Therefore, best risk/reward trades are: Short at Value Area Low (VAL) with stop inside of value, target venom lines at ones discretion No Longs below value. Price can reverse at any of the venom lines. I like to look at previous webs in the same time frame to get a likely venom line reversal (ie: does it often reverse at the third line?) Keeping an eye on weakness here is key, if price is able to bounce off a venom line and rally above the next venom line up, the reversal is likely strong. (SIMPLY REVERSE ALL OF THIS FOR STARTING ABOVE VALUE) Point of Control (POC) Value Area LOW (VAL) Venom Line Venom Line Venom Line Venom Line

MarketWebs Value Areas – Breaking Value Setups Value Area High (VAH) Point of Control (POC) Value Area LOW (VAL) /ES – Aug 19th 2015, pre-market globex & regular trading

MarketWebs Value Areas – Breaking Value Setups Value Area High (VAH) Breaking below value: When the market breaks below the “known” range, we are in an auction market. Therefore, best risk/reward trades are: Short at Value Area Low (VAL) with stop inside of value, target venom lines at ones discretion No Longs below value. Price can reverse at any of the venom lines. I like to look at previous webs in the same time frame to get a likely venom line reversal (ie: does it often reverse at the third line?) Keeping an eye on weakness here is key, if price is able to bounce off a venom line and rally above the next venom line up, the reversal is likely strong. (SIMPLY REVERSE ALL OF THIS FOR BREAKING ABOVE VALUE) Point of Control (POC) Value Area LOW (VAL) Venom Line Venom Line Venom Line

MarketWebs Value Areas – Breaking Into Value Setups Value Area High (VAH) Point of Control (POC) Value Area LOW (VAL) AAPL – Aug 26th 2015, regular trading

MarketWebs Value Areas – Breaking Into Value Setups Breaking Back Into Value: When the market trades outside the “known” range, we are in an auction market, but if we break back into the “known” range, there’s a good play here. Breaking into value from below, best risk/reward trades are: Long at Value Area Low (VAL) with stop outside of value, target Value Area High (VAH) with an 80% likelihood of touch. Short at Value Area High (VAH) with a target of the POC once reached. There’s an 80% likelihood that price will explore the entire range of the Value Area if it breaks back into it from trading significantly outside of it. This probability increases if a time-frame bar closes on the other side of the POC (above in this case). From the opposite side of value, if there’s enough time remaining in the time-frame, there is a good likelihood that price will return to the POC, this is fade-able. (SIMPLY REVERSE ALL OF THIS FOR TRADING ABOVE VALUE AND THEN BREAKING DOWN INTO VALUE) Value Area High (VAH) Point of Control (POC) Value Area LOW (VAL) Venom Line Venom Line

$199 Or Call 312-261-5581 The MarketWebs for ToS: **Limited Availability Offer – only 35 spots available!** Automatically drawn value areas from the previous time frames.: $299 Value Yearly, Monthly, Weekly, and Daily Value Areas Visual and Auditory Buy/sell signals based on your own trading style: $299 Value conservative, aggressive, caution-to-the-wind. Long/Short targets for day/swing trades AND dynamic stop loss markers! $299 Value Works for ALL Equities and ALL Futures! BONUS: 6 Hours of Video Mentoring & PowerPoint Slides for Reference: $1499 Value Learn the BASBOWW trading system on all time frames. Learn the best set-ups for trades based on value areas. Learn the details of how Value trading works and how to read the charts Learn how to read market profile in addition to value area for proficient day-trading. Learn how to read value areas to predict future price movement. Learn how best to use value areas to your advantage for trading on all time frames. Not a subscription! One time purchase, you’ll receive all updates for free! No refunds, once you buy it you own it for life! Oct 31st – Web’s 1 Year Anniversary trading with the MarketWebs Value Areas – Live Mentoring Session for everyone who has purchased the indicator Total Value: $2396 KOTM REGULAR PRICE: $999 Over 80% Discount Today Only! http://keeneonthemarket.com/marketwebs/ Special 2015 Market-Crash Offer $199 Or Call 312-261-5581