Wednesday 18 April 2007

Emini Daily Update: Recent volume patterns

The Emini closed up 1.25 points at 1,480.25 on Wednesday. Volume and range were both slightly above average at 1.1 million contracts and 11.00 points respectively. The chart below shows Emini trading over the last month or so on a 135 minute chart. Remember, this divides the trading day into 3 equal parts.

Emini Volume Patterns Image

At point A we had a volume climax and the end of a down trend which forced out the remaining sellers - after which the market could rise.

At point B we had another volume climax at the end of an up trend which allowed the professionals to take profits - after which the market fell.

At point C we had a quieter general rise in volume while testing a previous support area, indicating the smart money was buying. Note the very low volume bar (red) just after this area showing no interest in further selling and again the market rose.

At point D there was a similar pick up in volume to C while testing a previous support area and absorbing the selling volume - again allowing the market to rise.

At point E we have a series of large volume bars, each the first bar of the day, with very little follow through for the rest of the day. Is that professional selling during the afternoon? On the final bar (yesterday afternoon) there was more volume than any other afternoon bar during the last rise. The price pattern showed a spike up followed by selling and closing on the lows. Looks like profit taking over the last 3 days.

Click here to watch a video tutorial and download free code for the Better Volume Indicator. Good luck with your Emini trading.


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