Last Friday (5 February) the Emini bottomed around 1,040. We've spent the whole week rallying and almost reached 1,080 at the Close this Friday. Indeed on Friday we made an intra-day Low of 1,060 and rallied to Close on the high.
But something's not right. The adjusted TRIN reading was -24 showing net selling during Friday. The chart below plots these TRIN divergence patterns. Bearish divergence is signaled when the Close is greater than the Open but the adjusted TRIN reading is negative. This signal is by no means perfect, but …
TRIN Indicator Divergence (Emini daily)
Then there's Friday's intra-day activity. I didn't like it.
On Thursday the Professionals were taking profits into the 1,074 to 1,076 level. The Amateurs we're buying the highs and got wrong-footed. An "End of Trend" warning signal caught the high and the Emini sold off overnight.
Exhaustion Buying Volume & Professional Activity (Emini 4,500 tick)
On Friday, the Professionals were again taking profits every time we got into the 1,074 to 1,076 level. We had Exhaustion buying volume and then a final push to Close out the week on the high.
Smells like a "pump and dump" to me. But I have to say my other indicators are not so Bearish. All I can say is: my antenna is up. We'll have to wait for Tuesday to see how this plays out.
Enjoy the Presidents Day holiday on Monday if you're in the US. I'm not sure why the office of the Presidency is being honored – personally I think it should be changed back to Washington's Birthday or how about Goldman Sachs Day.
Good luck with your Emini trading.
