Assessments / Blog

ES #F High Supply and Volume

The daily chart of the S&P 500 mini futures contract above shows our proprietary SUPPLY and DEMAND Dashboard and BXB (Bar by Bar) Signals using data from the NYSE.

Friday the ES erased most of the previous day’s gains closing down 54.25-points at 2636.75 on heavy Supply and high Volume. Volatility is still very high and this kind of wild price swings may occur frequently, if Volatility remains at these levels.

Simplified volume is in Selling pressure territory. Friday’s bar was a wide price spread (from high to low) on the highest Volume since October the 29th (October swing low), but the previous day’s low could not be taken out, making Friday’s range an inside bar (range of bar inside the high and low of the previous day). This containment within the previous day’s range suggests that enough Demand was present at the low to keep price from breaking downwards, which suggests we can see a pullback to the upside on Monday. If the previous day’s low at 2621.25 is taken out, without a pullback of some sort, a large Sell-off may occur.

As given previously, our down side targets / support were identified at 2657.00 (again taken out Friday), 2625.00 (again taken out Friday), 2567.00, 2542.50 and 2475.00.

On the comparative strength/weakness analysis, the ES still shows weakness, but reached extremes, which can lead to a pullback of some sort, before continuing lower (unless sufficient Demand emerge to stop the down trend).

Daily Signals December the 7th:

S & D Dashboard Algorithm is still Bearish, and the Daily Signals turned Bearish


Comparative weakness, Supply levels and Supply/Demand Volatility are at or near extreme levels, and a pullback to the upside is possible, in which case we expect resistance in the 2717.00 to 2735.00 area.


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