The Emini closed down 0.25 points at 1,508.50 on Tuesday. We had very high volume today at 1.7 million contracts traded – the largest volume since the low of 14 March 2007. The Emini rallied twice in the morning towards 1,520. The first time was on climactic volume and then the second test was on lower volume. This set up the conditions for a decline with support eventually coming in at 1,505.
The chart above shows how we broke out of yesterday’s consolidation triangle (1 white bar), reversed and ended back in the consolidation triangle (2 white bars). Looks like the Emini is going to try to break to the downside next.
The chart below shows the Dow’s failed rally that closed on the lows.
And finally, the chart below shows the NASDAQ has now broken the rising trend line.