Change of pace and some Emini swing trading charts. The afternoon sell-off in the Emini on Thursday was extreme. We will no doubt get a bounce – because at this point "the sellers have run out of bullets".
However, what happens after that will be critical. There are two ways to go:
- We break through resistance at 1,117 and this endless rally continues, or
- Exhaustion volume comes in and the Emini doesn't make it back up to 1,117
I know that sounds obvious – the market is either going up or down – duh. But it's the markets reaction to the extreme selling on Thursday that will show the way. Do the Professionals see it as an opportunity to load up some more?
At this point I favor the second scenario and the daily Emini swing trading charts below show why:
- Second cyclical turn after an "End of Trend" warning signal appears to be holding and this is often an extreme point and the start of a new trend move
- Volume momentum has been declining and we're running out of steam with more Bearish divergence patterns being printed
- This last upswing had a large number of low volume bars showing little Professional participation, and
- We've seen distribution volume patterns (No Demand and Profit Taking) typically seen around tops (only 3 and I suppose we could have seen more).
Emini Swing Trading: Price Cycles (Emini daily)
Emini Swing Trading: Volume Momentum (Emini daily)
Emini Swing Trading: Low Volume Bars (Emini daily)
Emini Swing Trading: Volume Patterns (Emini daily)
Good luck with your Emini swing trading.
Note to self: Stupid, stupid, stupid – why do you insist on sticking your head out? You will only get it blown off.