Assessments / Blog

ES #F Increased Volatility

Our down side target was reached and penetrated yesterday as mentioned on the 13th “Our proprietary reversal pattern points towards a down side target of 2557.50, IF more weakness develops”, with a Smart money down bar on the last swing low and price reversed upwards again. This happened when Volatility ($VIX) was rising. Our Inverse Volatility calculation tool (Inverse calculation tracking the price direction) shows how Volatility increased since 9 November (Decrease in inverse calculation). Since the high of 2594.50 on the 9th we had 5 bursts of Multi Time Frame alignments downwards and no upward signal. It is also interesting to note that Selling pressure was dominant (below the zero line) most of the time since the 9th.

At the moment price is relatively strongly moving upwards with Comparative strength developing. We expect the 2576 to 2577.75 to form resistance and if broken with follow through and Buying pressure developing, the near term weakness will probably subside. We had no bar close below 2563.50 and if this happens, the 2542 area will probably be tested. Keep an eye on Volatility behaviour, as it is above a key level ($VIX reading above 12) and should give a clue to price direction.

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


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