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Newsletter / Blog


2017-05-17
ES #F Sudden down move after Divergences


The ES continuous contract made another all-time high at 2404.50 and then reversed. It is interesting that Divergence patterns on the Volume Simplified Oscillator occurred on the 234 minute, daily and weekly chart, warning about an anomaly in the market. The last up wave yesterday to the new all-time high, was reached on volume of 1.61 million contracts, the highest since April the 26th 2017. This up wave on the 234 minute chart moved only 20.25 points over 3 trading sessions and the angle of the wave line is also the shallowest for some time, showing a huge effort to get to the top (see our previous commentary posted earlier today). The reversal has moved 25.25 points, the highest down wave since the down wave that ended on April the 17th 2017. Volume Flow is weakening to the down side, and a pull back up occurred at a swing low of 2379.25, the resistance area mentioned earlier. A break of 2376 can lead to a larger sell off to 2357. The Volume Divergences and the quick move down, can make it difficult for the bulls to gain control again. We expect the pull back up to go to the 2387.25 to 2393.75 area, before the down move may continue again. Selling pressure has developed and the reversal up may only occur after some more testing of the 2379 to 2376 area.Join FB Group here : https://www.facebook.com/groups/1832814697041353/

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