Low volume advance today. The Emini closed up 3.25 points at 1,388.00 on Monday. Lucky call from Friday's analysis as we headed higher today but within the 1,380 to 1,394 range. Will we go higher?
Volume Indicator (Emini daily)
The Emini opened down 0.75 points at 1,384.00 then staged an impressive rally up almost 9 points all within 45 minutes. The market then went nowhere for the rest of the day and closed mid-range at 1,388.00. Volume was again very light at 0.9 million contracts traded, as seen on the chart above. But range at 9.75 points was much larger than expected with this low volume. The same pattern was also seen on the NASDAQ and DOW indices.
What does this mean?
The 1,390+ level has now been reached 7 times in the last 14 trading days. Only 1 of those days resulted in real profit taking – that is, closing up on high volume. There is obviously resistance at this point – but the more this level is tested, the more the selling volume will be absorbed and we will break though.
Trend oscillators still confirm the uptrend. My Secret #2 oscillator is the only one to have turned down at this stage. The Trading Index (TRIN) oscillator turned up again today – it tends to be the most volatile of the trend indicators, so this is not unexpected. As mentioned yesterday, my Secret #3 oscillator based on Smart Money is looking over-extended, but has not turned down yet. Cautiously long today.
Good luck with your Emini trading.