Wednesday 28 February 2007

Waiting for Low Volume Test

The Emini closed up 13.00 points at 1,409.00 on Wednesday. The range was still high at over 20 points and so was the volume at over 2 million contracts traded. This indicates there is still a good deal of selling volume that needs to be absorbed. But the Emini was up and today's low was 9 points above yesterdays climactic selling low - the professionals are buying.

Emini Volume and Volume Churn Image

We need confirmation that all the sellers have sold before a stronger upswing. This confirmation will come with either a high Volume Churn (low range) day or a spike down on low volume. Neither have happened yet and so expect the market to continue to test the lows around the 1,400 level.

The chart above shows the daily Emini bars with Volume and Volume Churn indicators plotted below the price action. Remember, Volume Churn is Volume divided by Range and we only had an average reading today.

Click here to watch a video tutorial and download free code for the Better Volume Indicator. Good luck with your Emini trading.

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