Volume price analysis gives us the warning signals as US markets get underway

As the US day trading session gets into full swing I start by looking at the YM emini once the initial volatility has calmed. When the cash markets open alongside Globex this is what we expect to see – plenty of whipsaw price action and plenty of volatility triggers on the NinjaTrader platform. So expect to see sharp reversals in the fast timeframes and of course on very high volume. Then as the price action settles we can start to day trade the indices and volume gives us the insights to anomalies and confirmation. In other words whether price and volume are in agreement or in disagreement.

This is the basis of volume price analysis and Wyckoff’s third law of effort and result. Effort and result are either in agreement or disagreement and from there we go to investigate and draw our conclusions on what the big operations and market makers are planning next.