Larry Williams: Failed Oops Pattern
Larry Williams failed Oops pattern today. The Emini closed up 3.75 points at 1,393.00 on Thursday. Once again the advance continues but today there were a couple of signs of weakness.
The Emini gapped up at the open 2.75 points at 1,392.00. The professionals immediately stepped in and took profits, driving the market down during the first 1 1/2 hours to a low of 1,385.00. The rest of the day was spent slowly clawing back above the open to hit a high of 1,395.25 during the last hour of trade. The Emini eventually closed at 1,393.00 and above the open. Today both range and volume were above average at 10.25 points and 1.1 million contracts respectively.
Larry Williams Oops pattern
In previous articles I have mentioned Larry Williams and one of his more famous and well-publicised ideas – a pattern he calls Oops. The pattern occurs when the open of a daily bar is above yesterday’s high or below yesterday’s low. Trade entry is signalled when the market touches either the high to go short or the low to go long.
The theory behind this pattern is that non-professionals check their charts at night and place orders for the next day’s open. Whereas professionals wait for the market trend to develop during the day and place their trades later in the day. Therefore, if the open is substantially above or below the previous days trading range, this indicates the non-professionals are panicking and desperate to enter the market. Professionals will use these opportunities of extreme emotion to place trades in the opposite direction to the non-professionals.
Larry Williams Failed Oops pattern
The chart above shows that the Oops pattern failed today with the Emini eventually closing above the open. Other failed Oops patterns over the last three months are also shown. As you can see the pattern produces a mixed bag of results – I wouldn’t use this signal alone for trade entry. However, today’s Emini market action shows how resilient this uptrend was today.
We also had the Trading Index (TRIN) oscillator turn down with Trading Index divergence today.
Good luck with your Emini trading.