1. The ShadowTrader Tape Reader
Tracks the net accumulation (buying at the ask) minus distribution (selling at the bid).
Example
+300 shares of AAPL bought at ask price of
-200 shares of AAPL sold at the bid price of
= Net accumulation of 100 shares
Tape Reader allows user to see the net result of buying and selling as it occurs. Using Tape Reader on a tick chart can produce more accurate information than tracking it on a time based chart ( 1, 5, 15, 30 min. chart).
Tape Reader definition of Tick – a price point where a transaction has occurred at a higher or lower price than the transaction immediately previous to it. A trade of 1 share, 1 penny higher or lower than the previous trade will count as a tick, just as a trade of 1,000 shares 1 penny higher or lower than the previous trade will.
The Tape Reader belongs to the same indicator class as “market delta”, “tape reading”, “accumulation-distribution”, “net balance”, etc.

2. VPOC
1) Monday – 11/14/16 – 10:00 am, Tape Reader breaks the selling trend (white circle) giving the heads to potential of reversal. Note that this occurs while price is at the bottom of a red price bar (white arrow). Yellow oval reflects limited selling pushback into 10:05 am.

3. VPOC
Stop
2) Monday – 11/14/16 – 10:10 am, New ascending buying trend. Violated at 10:10, but good support at this location (horizontal white line on 5 min chart) so no panic. Red arrow potential stop location for long.

4. VPOC
3) Monday – 11/14/16 – 10:15 am, Tape Reader showing buyers overwhelming sellers confirming breakout from 40 minute consolidation. Note the positive net buying that occurred during the 5 min period (white circles).

5. VPOC HL HL
4) Monday – 11/14/16 – 10:18 am, Tape reader reflecting continued buying, comfortable with position if long.

6. VPOC HL HL HL HL
5) Monday – 11/14/16 – 10:19 am, The yellow arrow marks the end point on the last slide. Within on minute of that point, selling comes back in and pushes tape reader below prior two higher lows (HL). Meanwhile price isn’t showing anything that threatening (p). Time to move stop up and/or take partial profit.

7. VPOC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL
6) Monday – 11/14/16 – 10:20 am, Note price is now 0.50 higher than one minute ago, however red divergence bubble on Tape Reader is telling us that net accumulation minus distribution was negative during the past five minutes versus price (red arrow). Important: These divergent labels are not signals. Rather they are information to be noted in the ongoing narrative.

8. VPOC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
7) Monday – 11/14/16 – 10:22:30 am, Tape Reader shows that selling continues to build. Price is down just 0.50 from undercut (white arrow) of prior higher-lows (HL) on Tape Reader and 1.00 from divergence note.

9. VPOC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
New Tape Reader Low
8) Monday – 11/14/16 – 10:32:30 am, We jump ahead 10 minutes and price has declined four handles since the last picture and is now testing the bottom of the current day’s range while accumulation-distribution on the day (Tape reader) is already making new lows.

10. VPOC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
9) Monday – 11/14/16 – 10:38 am, A little over one hour into the trading day, Tape Reader shows buyers coming in after it registered new low, but the surge has a relatively muted effect on price. A new uptrend line was added to Tape Reader help maintain perspective at this important point. But within 90 seconds it is broken so bullish strength is in question given current location of /ES (breakdown?).

11. VPOC
VPOC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
10) Monday – 11/14/16 – 10:43 am, One last surge of buyers (white arrow) could not overcome the last highest reading on Tape Reader (white line) before sellers step in to begin an expansion of range lower.

12. VPOC
VPOC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
New Tape Reader Low
11) Monday – 11/14/16 – 10:49 am, Expansion lower didn’t come in a rush though. This is a full six minutes later and price has only dropped 3 ticks. It is the inability of longs to mount any threat though that would keep a short in the trade. This lack of buyers is represented beautifully by Tape Reader here (yellow oval) before it goes on to make another new low.

13. VPOC
VPOC
Prior Days POC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
New Tape Reader Low
12) Monday – 11/14/16 – 10:52 am, Three minutes later, no real buyers showing up as price nears prior day’s POC.

14. VPOC
VPOC
Prior Days POC HL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
New Tape Reader Low
New Tape Reader Low
12) Monday – 11/14/16 – 10:56 am, Three minutes later, no real buyers showing up as price nears prior day’s POC.

15. High Higher-High Higher-HighsHL HL
Red divergence bubbles = negative divergence from price. Green divergence bubbles = positive divergence from price. HL HL HL HL
New Tape Reader Low
14) A picture from 10/26/16 that I sent to Peter. /ES was consolidating during the first 55 minutes of trade. Tape Reader was already telling us
Buyers were active with a new higher high at 10:25 with increasing pressure thereafter.

16. 11-16-16 Chop signal in full effect.

17. FB :30am to 11:00am EST.