Volume Patterns Suggest Professional Accumulation
Volume pattern discussion today. I've been bullish on the Emini since the end of March. But the Emini's large drop with large volume on Wednesday made it look like this leg of the uptrend might be over. Since Wednesday though the volume patterns suggest the Emini might go higher.
Volume Patterns (Emini daily)
Large volume down days, like Wednesday, are scary. But maybe that's what the Professionals want you to think. Maybe they wanted to scare you out of your long positions and go short?
If the top was in and the market was going down, why on Thursday did we break Wednesday's low by only 1.25 points? The volume was lower too, showing almost no follow through.
Then on Friday we had a gap open below Thursday's low - again, maybe designed to scare the public out of their long positions? In the end Friday closed up, on low volume and low range - a classic high volume churn and "No Supply" volume pattern.
My best guess is that professional accumulation has been taking place over the last 3 days and the uptrend will resume this week. My only concern is the chart below.
Hilbert Sine Wave (Emini weekly)
This chart shows a cross on the weekly Hilbert Sine Wave and we are approaching a cyclical top. Confirmation happens when the low of the previous week is taken out - and we came within 0.75 points of this on Friday.
The Hilbert Sine Wave can signal early and that's what I'm guessing in this case. In addition to the volume patterns we've also got possible bullish divergences setting up on my swing trading oscillators - TRIN and Put Call Ratio.
Monday and Tuesday's Emini trading will give us more clues. But the volume patterns suggest to me we're heading higher. Good luck with your Emini trading.
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