Friday 29 August 2008

Emini Pulls Back on Friday

At the end of Thursday we had high Volume Churn, showing profit taking and a likely Pull Back on Friday. Then on Friday morning the Emini gapped lower, re-tested the 1,298 level and then fell away.

The Hilbert Sine Wave signaled a Pull Back entry ("PB" on the chart below) but the signal did not have good volume confirmation. Turning points work out best with a pattern of Volume Climax down, then high Volume Churn followed by Volume Climax up.

We didn't get the high Volume Churn which would have shown significant buying volume entering the market. The Emini just wanted to close the gap left over from Thursday's open around 1,285.

Emini Pull Back Image

Pull Back Signal (Emini 15 minute)

So the Pull Back entry signal failed and we broke through the support level of 1,286.50. Although there was a bounce after that, the Emini could only manage a high of 1,291.75 and we've now had a cyclical turn down on the 15 minute chart.

Large buying volume entered the market at the end of the day to halt the decline at 1,281.50. But a lot of this volume would have just been closing out positions at the end of the week and before a long weekend.

My TRIN system is still long and we're holding above the trend line shown in Wednesday's post. Best course of action for me is to wait for Tuesday's trading to show more clues.

Enjoy the Labor Day weekend if you live in North America. Good luck with your Emini trading next week.