Stopping Volume pattern yesterday forewarned of turning point. The Emini closed down heavily today – down 46.25 points at 1,457.75. Tuesday’s post about trading with multiple time frames explained why we were looking for a turn down. Then yesterday we got a Stopping Volume pattern with higher volume and lower range, showing that professionals were taking profits. You can read more about the Stopping Volume pattern here.
Volume Patterns: Stopping Volume Pattern
The chart below is just a recap of the expected Hilbert Sine Wave crossover in the 135 minute time frame. Having the Stopping Volume pattern in the higher (daily) time frame added confirmation to this likely turning point.
Hilbert Sine Wave: Turn Coincides with Stopping Volume Pattern
Wait for Stopping Volume pattern to halt the drop
Where to from here? My other oscillators – TRIN Indicator and Smart Money – have now turned over. However, they are nowhere near over-sold yet. Time to wait for this final move to “Complete” and look for exhaustion volume patterns before going long.