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ES #F Wild swings possible

Yesterday Buying pressure developed to take price to a new all-time high at 2665.25. This happened on an upswing with negative Delta volume and various Pullback/Reversal warning signs. The volume on this upswing was much lower than the previous upswing volume and the previous downswing volume. The last bar on the upswing was a Doji-bar and when the swing reversed, with Selling pressure after the buying pressure was short lived, with Comparative weakness and MTF down alignment, the odds for a down movement was high. This all happened with increasing Volatility. The Pullback exceeded our support level of 2539.50 given Yesterday. A lucrative move down was the result.

At the moment Volatility is still relatively high near the 12-point level and we are still in Selling pressure territory. Should Volatility decrease and Buying pressure develop a swing to the upside should occur. A bar close below 2613.25 with sustained Selling pressure, will be a serious threat to the near term uptrend. The last four up and down swings have increased in size and decreased in time and can catch one off-guard, so be cautious for this kind of price behaviour (sudden swings that are short lived).

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


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