Wednesday 25 July 2007

Volume Climax - Possible Trend Change

Emini Low Volume Test Image

Volume Climax today with 2.4 million contracts traded. The Emini closed up 2.25 points at 1,524.75. The chart above shows the early morning weakness that culminated in a Volume Climax at 10am. A rally ensued which slowly dissipated and then around 1pm we had a low volume test at the 1,512 level - then the rally was on.

The Volume Plus indicator shows a number of volume patterns:

Volume Climax bars are red
High Churn bars are green
Volume Climax with High Churn are magenta (none shown)
Low Volume bars are white

This Volume Climax followed by Low Volume Test is a typical Wyckoff pattern, signaling the possible start of a new move up. Yesterday's post on TRIN indicators and Emini divergence mentioned that my cyclical indicators had yet to turn. The chart below shows that the Hilbert Sine Wave is about to cross and so everything is coming together.

Emini Hilbert Sine Wave Image