TRIN indicator divergence today. The Emini closed down 2.50 points at 1,380.25 on volume of 1.8 million contracts, the lowest volume of the last 6 days.
The biggest feature of today’s trading was the large volume spike before 10am that pushed the Emini up 16 points to 1,390 – the high for the day. This felt like blow off volume to me.
TRIN Indicator Divergence (Emini daily)
The chart above shows the Better TRIN Indicator Oscillator is reaching over-bought levels at +90. In addition, we have a bearish divergence pattern on the end-of-day TRIN value. The Emini has made a new high but the Better TRIN made a lower high at +95. The Better TRIN indicator signals these signs of weakness with a white dot (circled).
The TRIN indicator divergence is a sign of weakness, not necessarily a signal to go short immediately. However, it forewarns of a possible down turn in the Better TRIN Oscillator. I’ve marked 3 previous instances where this happened on the chart above.
In addition to the TRIN indicator there are a number of other signs of weakness:
- Put Call Ratio Oscillator has turned down
- Hilbert Sine Wave has turned down on daily and 135 minute time frames
- Bond market is below it’s peak 24 days ago and the Bond oscillator is over-bought
- No Demand volume pattern on the Emini daily chart
- US Dollar is weakening versus the Japanese Yen
Going forward, the 1,375 support level on the Emini will be critical.
Bluebird Powder Day in Japan
On a personal note – back from 10 days snowboarding in Japan. This place never fails to deliver. It’s not a secret any more, but I wish it was (Niseko on the island of Hokkaido).
Good luck with your Emini trading.