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Assessments / Blog 2017-10-26 ES #F Absorption followed by Volatility Yesterday morning and the day before we warned about volatility ($VIX) rising to the 12-point level, which will bring more weakness and that is exactly what happened yesterday. We had a wide range Kamikaze up bar (Yellow bar representing Crowd activity) at the last swing high on the 23rd and on the 24th we had a huge and sudden switch to Buying pressure without price advancing upwards (It moved sideways and down during this Buying pressure development). When price broke the important 2562.50 level a further 21-point down move materialised, which was the result of the mentioned circumstances of the 23rd and 24th (Volatility increasing and Smart money absorbing the demand = Yellow up bar at the high and sudden Buying pressure without upward price movement). Price advanced to a low of 2541.50 Yesterday before rising again. At the moment Selling pressure is cooling off after the wide range Smart money down bar at the last swing low. The price action after this bar (which penetrated the low of October the 19th and reversed) looks a lot like a Spring formation developing. The sudden pullback (upswing in progress) after the last swing low had Negative Delta volume (Net selling) so far, but is still in progress. The Multi Time Frame indicator is still firing downwards and if we do not get a bar close above 2563.25, some more downward price action can follow. A close above 2467.75 followed by sustainable Buying pressure can get the Bulls on track again. Longer term resistance to the down side is at 2539.75 and 2528. For the Bearish action to continue a bar close below 2546.50 should favour more weakness, but sideways price action from here is also a possibility. See results of our Strategy on the MTF Tool trading the EURO RISK DISCLOSURE: The information delivered here is for educational purposes only and is not intended to be a recommendation to purchase or sell any of the stocks, futures or other securities referenced. All references are for illustrative purposes only and are not considered endorsed or recommended for purchase or sale by MC Trading. Trading Forex, Stocks and Options, Futures and any Commodity or ETF contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results and no representation is being made that any account will or is likely to achieve profits or losses similar to those shown. MCTrading has taken reasonable measures to ensure the accuracy of the information contained herein and on this website, however MCTrading does not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or from an inability to access such information or any delay in or failure of the transmission or receipt of any instruction or notification in connection therewith. |