Monday, January 26, 2009

Late Update

Here is a 30 minute bar chart showing day session trading in the e-minis over the past two weeks.

The market has been trading sideways over much of that time between the two red lines. I thought this morning's early rally was the start of a breakout move above the top line but there was no follow through. On the other hand the drop from today's morning high didn't build much volume, and today as a whole looks like a low volume day compared to the preceding six days.
It is normal for volume to drop as the market trades sideways.

After a day like today it is generally a good rule to follow the first sign of increased activity which develops as the market moves away from today's center of gravity ( green line drawn through today's range of trading). This afternoon I thought the market was about to break downward from this center of gravity but it did not. So now it is a matter of waiting until the market shows its hand by moving one way or another on visibly increasing volume.

I do see one moderately bullish clue in this chart. Today's center of gravity was visibly higher that those of the preceding week. This sort of clue is often an early indication of the start of a substantial move out of a trading range.

1 comment:

Anonymous said...

another tough day...I agree the bias is turning up but these interday swings, its like becoming a very active day trader!

Thank you for your work, I enjoy the commentary!