It’s 3:27 pm … SELL !!!
Courtesy of Fibozachi
Today’s market internals registered a new TICK low-of-the-day (lod) reading of -889 at 15:27 (3:27 pm EST) as several trendlines were simultaneously broken on the VOLD (NYSE Volume Up-Down Difference), ADD (NYSE Adv-Decl Issues Difference) and the VIX. This was an incredibly clear-cut signal that an end-of-day sell-off was about to begin and directly presaged 5 increasingly greater TICK lod readings that registered over the next 30 minutes; demonstrating an overwhelming desire to sell by market participants.
Please click on any of the snapshots below to open a large, crystal-clear picture.
Watching the market internals on a 1-minute basis can be extremely valuable to intra-day traders (especially those who scalp futures) as warning signs within these internals almost always lead actual price action on the ES (S&P 500 futures, current basis December, ESZ09) by just a full second or two.
Please always remember that everything is contextual; a new TICK lod reading that registers with only a half-hour remaining in the session does not always imply that an end-of-day (eod) sell-off will occur …. many times it will indicate that an exhaustion of selling pressure has taken place and effectively mark the low – in actual price action – before a swift upwards push takes hold into the close.
The new TICK lod reading of -889 that occurred today at 15:27 (3:27 EST) was much more likely to be a bearish kick-off signal because the ES had spent the majority of the cash session (09:30 – 16:00) in a narrow trading range, otherwise known as ‘sideways chop.’ When trend is purely neutral and the TICK has not registered any noteworthy reading for hours …. the first extreme reading that it registers usually signifies to technicians that an outsized price swing will soon follow. Today’s bearish instance is a perfect exemplar of this practical nuance within technical analysis and just one of many which successful traders effectively employ on a daily basis.
p.s. beware the Bearish Engulfing candlestick pattern on the daily S&P cash (INX)
Disclosure: we anticipate becoming (1) considerably long the $DXY US Dollar Index via DX futures; (2) about as short various commodity futures as Danny Devito and (3) about as short the ES (S&P futures) as Verne Troyer, once a multiple confluence of proper trading signals confirm themselves; during any given session we may trade any of these instruments bi-directionally.
For similar technical takes, market calls and insights; please visit our brand new website, www.fibozachi.com. There, you can view both our complete body of analytic work as well as detailed explanations of the unique design development and technical methodologies within the proprietary technical indicator packages that we use daily to perform a comprehensive technical analysis of stocks, options, ETFs, futures and FOREX across interval periods of time, tick and volume.
