Monday 19 May 2008

Exhaustion Volume Pattern, Stops Hit on the Way Up

Exhaustion volume bars taking out stops on the way up.

Emini Exhaustion Volume Pattern Image

Exhaustion Volume Pattern (Emini 9 minute)

Today we had the day I thought we'd get on Friday! The Emini started up and gradually took out all the stops all the way up to 1,440. It did it in 3 legs each with a large volume, large range bar - exhaustion volume pattern (colored red on the chart above).

Then the Emini couldn't hold 1,440 and we took out 1,430 on the way down on large volume. At the end of the day we bounced back up to 1,430 but I don't think this will hold. I'm now waiting for an exhaustion volume pattern on the downside to show where the large volume buying comes back into the market.

The Better TRIN Oscillator turned down today (as did the Put Call Ratio Oscillator) and that signaled to take profits on our long trade. The average entry price was 1,400 and so the profit on this trade was almost 30 points.

Good luck with your Emini trading.