Volume Patterns: Stopping Volume
The Emini closed up 8.75 points at 1,535.75 on Thursday. Early today we got large buying volume coming into the market. The chart above shows the Stopping Volume and Doji Candlestick patterns. These coincided with a cyclical low turning point on the 135 minute time frame.
The Composite Trend Oscillator is over-sold and yet to turn up. However, because of the volume pattern and cyclical turn my best guess is that the Emini will continue to rally. We have retraced to the 50% level (1,536) of the last down swing and so we’ll probably see selling early on Friday. If I’m right, this selling volume will be absorbed and the Emini should rally higher.
Wednesday’s short position was closed out at 1,525.00. We made 10 points (profit target) on the first contract and 28 points on the second contract, giving us an average of 19 points be contract. Assuming you trade US$8,000 per contract, that’s a 11.8% return. We’re looking to enter the next long trade at 1,533.00.