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Newsletter / Blog
ES #F Sideways as expected
We mentioned the possibility of sideways price movement yesterday and that is exactly what happened. On the daily chart the trading range on Friday was well within the trading range of the previous day. Volume Flow is still to the down side with selling pressure. On the 234 minute some aggressive buying came in on the last bar (Positive Delta Volume) with Buying Pressure developing and Strength present, however price has not moved a great deal. The last up wave was a low volume up wave and the current down wave in progress only moved 9.25 points so far, the lowest point down move for quite some time. This price action in narrow ranges reminds of possible absorption winding up like a coil to be released in one direction or another. Be extremely careful as the VIX index (implied volatility or fear gauge) fell to 9.56 last week, the lowest since late 2006, amid a relatively muted stock market. A sudden rise in the VIX from here, can send prices spiraling down which happened during previous market crashes/corrections. Some further sideways price action is possible for the near future. A bar close below 2379 can lead to further weakness. A bar close above 2398 can put the Bulls in control again. On the longer term (weekly) chart, the downward Divergence between price and Volume (Volume Simplified Oscillator) is still clearly visible with some selling pressure developing. All warnings to be extremely careful when taking positions in the market.
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