Here is a 30 minute bar chart of the e-mini day session trading this week.I thought the market would hold support near yesterday's close at 840. It dropped a full 15 points lower than that. Worse, the volume on that drop was significantly higher than the volume at the corresponding time of day previously this week. The question I am mulling over is whether this selling spasm is a genuine supply shock or not. If it is, the short term trend has turned downward.
Here is how I am going to play this. If the market drops as low as 821 it will have retraced 100% of yesterday's demand shock. In this circumstance I will conclude that today's action constitutes a genuine supply shock and that the short term trend has turned downward.
Unless and until 821 is hit I am going to give yesterday's demand shock the benefit of the doubt. My guess is that nothing much is going to happen for the rest of today's session since banks and exchanges will be closed in the U.S. on Monday.
2 comments:
Excellent analysis Carl --Thanks.
If we can get above 846 then we can probably call this mornings selloff a shaking-out of weak longs. But any weakness from here and I think we are in for a BIG late day selloff.
Just sold at 843 with stop-and-reverse above 848.
Looking for 818 by the close
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