Too Much of a Good Thing

Here is a five minute bar chart of the e-mini day sessions of the past two days. My projected range for today is 715-740 (blue rectangle). I went long at the first green arrow because the market had reacted about 10 points from its overnight high and reactions on the way up have been running 8-10 points. I didn't wait for the 715 level for that reason and also because we opened at 725 - the 715 level would represent a 10 point drop from the open and that would have been a bearish indication.

The market rallied quickly thereafter. At the point where it had rallied back to its overnight high at 730 it put in a high volume up bar (first pair of red arrows). This put me on alert because the market was at a minor resistance level and within 10 points of my projected high for the day which I expected to be reach later today. When the next bar made a new high on reduced volume (second pair of red arrows) I decided not to tempt fate and sold my long position. This combination of a high volume bar near resistance and then a lower volume continuation usually means that a reaction is imminent.

I now see support at the midpoint of the reaction from the open - roughly the 721 level. I also think the market will make it pretty close to 740 later today.