Friday 13 June 2008

Did We See a Buying Climax on Friday?

From Wednesday's post: "My best guess is we'll get a bounce based on this volume pattern … but hit resistance before we finally complete this down leg."

Emini Buying Climax Image

Buying Climax & High Volume Churn (Emini 27 minute)

The Emini has bounced up 20+ points from Wednesday's close and has hit resistance around 1,360. The chart above shows we had a buying climax early on Friday. Then high volume churn late in the day when the Emini re-visited the 1,360 level.

To me, this suggests Professional selling and we're getting ready to complete the down leg. Monday's action will confirm the pattern - to push through 1,360 we'll need another surge of buying and if we don't get it the Emini will fall away.

Emini Cyclical Top Image

Cyclical Top Approaching (Emini 135 mintue)

The chart above shows the Hilbert Sine Wave is coming close to making a cyclical top. This would mark the end of the pull-back and another down leg for the Emini.

Couple of other points worth noting. My swing trading oscillators (TRIN, Put Call Ratio and Smart Money) are not over-bought yet. But seasonal patterns suggest the Emini peaks mid-June and finishes the month with a strong down move.

Good luck next week with your Emini trading.

Emini trading articles filed under Volume Patterns :