Assessments / Blog

ES #F Pullback and then new high again

Yesterday and the day before we had a Pullback/Reversal warning signal and the ES made a Pullback Yesterday of 18.25 points from the high, before advancing to another all-time high today of 2571.75 with another Pullback/Reversal warning today. It is interesting to note that the up move at the close which continued in overnight trading, was made whilst the Simplified Volume Oscillator was below zero (In overall selling pressure conditions) and that the last up wave (still in progress), has a very steep angle with Negative Delta volume (the highest Negative Delta volume since September the 5th). We have another Divergence down and the previous 4-hour candle on the candle stick chart closed way down from the high (in the low third of the candle). All this looks very much like an Up thrust occurred and one should be very careful to take any long positions from here at the moment. One argument can be that absorption was taking place, but if there is no follow through to the up side, the Up thrust will be confirmed and this should lead to more weakness and a substantial pullback from here can occur. Should a substantial pullback occur, our proprietary reversal pattern points to the 2492.25 area. The $VIX advanced to nearly 12 Yesterday, which is an important volatility level, before reversing and any rise again in the $VIX from here can give a clue if a substantial reversal can occur from here and if possible wild price swings will take place in the near term.

See results of our Strategy on the MTF Tool trading the EURO


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