The Emini closed down 28.75 points at 1,503.75 on Thursday. In yesterday’s post I said “the Emini might not have bottomed quite yet” and “we have yet to see climactic volume on the downside.” Well today we had a huge sell-off and volume was very large at 1.9 million contracts traded. Is there more to come? We need to see the Emini bounce and then test today’s lows before the next upswing starts – a process that could take a couple of days.
Unfortunately, we were out of the market having taken profits on Wednesday. We were looking for a bottom to form today in order to get long but the Emini just kept sliding all day. As I’ve mentioned before – my biggest fault as a trader is being too early. In this case I was too early taking profits. I hope you made the most of today.
Finally, today’s chart is of 10 year Bonds with the 20 day delay line superimposed. Turning points in the Bond market appear to lead turning points in the Stock market by about 20 days. As you can see from the chart the Bond market made a major high just over 20 days ago which we now know has been replicated in the Emini market. Once again, this proved to be an excellent timing tool for anticipating this last market downswing. Check out the article on Bond market analysis and how Bonds can be used to trade the Emini.