It's funny but my favorite Volume Indicator trigger is the innocuous Low Volume bar. See a Low Volume up bar near a market high and it shows lack of demand. Low Volume down bar near a market low and there's no supply.
Then there's my absolute favorite – Low Volume bars on a tick chart. Because each tick has the same number of trades the Volume Indicator is measuring the average trade size. So a Low Volume bar is a Small Average Trade bar = the Amateurs. Don't follow the Amateurs.
Anyway, last week the 800 level was tested twice. On Monday we gapped up and rallied early. Then in the middle of the day we had a Low Volume down bar (yellow on the chart below).
Better Volume Indicator (Emini 135 minute)
If the sellers were in control they'd have taken their profits and rushed for the doors. But the lack of volume signifies a lack of supply. The day ended with a doji candlestick bar indicating indecision.
The next couple of days will be critical. If we break Monday's high we could well be on our way to breaking 900.
TradeStation EasyLanguage code for the Better Volume Indicator and PaintBar is free and can be downloaded from the Better Volume feature article (link below).
Good luck with your Emini trading.
