Here is an hourly bar chart of the December S&P e-mini futures. I last commented on this market here.
Sometimes what a market fails to do in response to a stimulus is the key to detecting a change in trend. On the S&P chart I have highlighted four distinct wide range bars which show aggressive selling entering the market. After such selling one expects the imbalance to continue and to result in lower prices immediately.
But as you can see on the chart, in each of these four instances the market halted after the selling passed. This tells me that the buyers in each case were not market makers or day traders but instead traders with time frames at least as long or longer than those doing the selling. In other words, this phenomonon shows even stronger buying than selling. The obvious conclusion is that the market is headed up from here.
I think we shall soon see a 1389 print. I also think the odds are good that I shall be forced to put aside my "down to 1369 scenario" and that the 1377 low yesterday ended the reaction from 1395.25.
1 comment:
"But as you can see on the chart, in each of these four instances the market halted after the selling passed. This tells me that the buyers in each case were not market makers or day traders but instead traders with time frames at least as long or longer than those doing the selling." is a brilliant observation. Even an "old" dog like me has learned something new technically. Carl, count me as your #1 fan. Unlike other blogs which merely list other links, yours has substance, original content, technical gems & nuggets. THANK YOU
PS I remember Cyclic Forecast from when i was a young stockbroker.
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