Highest volume indicator churn ever today. The Emini closed up 3.5 points at 1,405.00 on Thursday. Three days of distribution and a Doji candlestick pattern as well today. Read on to understand volume indicator churn.
Volume Indicator (Emini daily)
The Emini opened up 4 points at 1,405.50. The low of 1,402.00 was made early in the day and the high of 1,408.00 was made at lunch time. The Emini eventually closed at 1,405.00. Range for the day was only 6 points but volume was above average at 1.1 million contracts traded.
Emini volume churn defined
In the chart above I've added an indicator of volume churn. This is defined as volume divided by range for each day and is plotted as a histogram below the daily bars. As you can see today's reading was 184,000 – this represents the number of Emini contracts traded per 1 point of range. This is the highest reading on the Emini ever!
Today was also a Doji candlestick pattern, where the open and close were very close and in the middle of the day's trading range. This pattern typically represents indecision and is the usually found almost exactly mid-trend or at the beginning or end of trends.
Multiple distribution patterns
On Tuesday we saw high-volume exhaustion with over 1.5 million contracts traded. On Wednesday we closed in the middle of the range on above average volume. Today was extreme churn with above average volume and very small range. All of these are signs of distribution with professionals selling into market strength.
Update on trend oscillators – all high and turning down just slowly.
Good luck with your Emini trading.
