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J. Patrick Marzano manages the operations and communications of Metrixx. He began his career in the futures industry as a broker at the Chicago Mercantile Exchange (CME Group) working for Aries Options Brokers and American-Way Futures. He also served on the Dow Jones Options Pit Committee. In... More
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Metrixx Fair Price Report
  • Gaps, Gaps And More Gaps – A Value Summary Of Light Sweet Crude (CLEF14) 0 comments
    Dec 3, 2013 9:09 PM

    Crude opened the U.S. session (7:20 am - 4:15 pm CST) at 93.80. For the first 30 minutes of trading a small distribution was created from 93.67 - 93.90. Crude eventually broke out to the upside creating a number of Value Gaps: the first from 93.91 - 94.14, the second from 94.22 - 94.56, the third from 94.95 - 95.20 and the fourth from 95.41 - 95.63. All of this price movement higher occurred during the first hour and forty minutes of the session. Prices continued to move higher but consolidated establishing Fair Price at 95.76 and a value area of 96.52 - 95.00. During the last 45 minutes of trading a new Value Gap was created from 96.22 - 96.81. Most of this gap was filled leaving 96.22 - 96.39 remaining. Crude closed out the session above its Value Area at 96.89.

    (click to enlarge)CLEF14 Value Distribution

    Fair Value Definition: The Metrixx Fair Value indicator provides traders a measure of fair value in listed derivatives markets by showing at what prices levels have the most liquidity for a certain period of time. Traders can use this indicator to map out entries, exits or appropriate stop levels. Or they can simply use it as more precise support and resistance that they can incorporate with other indicators. Subscribers to Metrixx see this information in real time when it can help them the most.

    What am I seeing: The lightest colors show the beginning of the session, the darker the color the later in the trading session. The larger the distribution the more value market participants have placed at that price level. A distribution outside of the blue colored area is viewed as being outside of that session's Value Area. Those areas of single distribution are noted as Value Gaps. To better understand Value Distributions please read, Understanding Metrixx Value Distributions.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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