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ES #F Volatility galore
Friday before the regular trading session we warned about the anomaly of increased Volatility on the upswing to a new high. Volatility increased further and we had a flush to the down side with Selling pressure developing reaching a low of 2605.00 in minutes. The sell-off was short lived and price immediately reversed to close at 2642, with Volatility decreasing again. It is difficult to interpret and give an analysis after this kind of price behaviour, but the Smart money down bar on the last down swing looks like a Spring formation, penetrating the previous swing low at 2619.75 then jumped up to close 37-points higher again.
The current upswing in progress has drawn very low volume with negative Delta volume so far, giving a mixed signal in contrast to the potential Spring developing. Traders have to be cautious in these circumstances, carefully watching Volatility and Buying/Selling pressure. A bar close above 2650.25 with Buying pressure will probably lead to another new high. Should the upswing end on this low volume and a bar close below 2613.50 with sustained Selling pressure, it will be a serious threat to the near term uptrend.
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