A clear anomaly on the daily ES chart

ES daily chartWe had a clear anomaly on the daily chart for the ES Emini and which sent a strong signal of weakness ahead and is now developing as the trading session develops. The candle of Monday was wide and up, yet look at the volume. It is average and given this was a dramatic move higher, Wyckoff’s third law applies. Effort and result are in disagreement. On such a move we would expect to see higher volume as we have seen on previous days in the current climate.

Yesterday’s price action confirmed this weakness with higher volume, but a narrow spread candle, with the index duly rolling over this morning as the VIX climbs to 58.50, up five points from yesterday. Finally, we also have resistance building in the 2640 area and confirming my analysis of a few days ago that this rally is developing as a short squeeze and is not a primary reversal in trend.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading

About Anna 2016 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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