U.S. Indices Push Higher, But For How Much Longer?
Anna Coulling | Oct 20, 2021 03:59PM ET
It’s been another day of gains for the ES Emini at the end of the trading session on Wednesday. And no doubt, longer-term investors will be relieved that bullish sentiment has returned after the roller-coaster ride of the last few weeks. But for how much longer?
While I don’t wish to rain on anyone’s parade, the volume associated with the last six days is showing a worrying trend. It’s not a positive trend either. As can clearly be seen, volume is declining, while price is ascending. This presents a clear anomaly for Wyckoff students. For such a move we should expect to see volume rising, not falling.
What also looks anomalous is the second of these candles for the price action on Oct. 14. It had a wide spread up candle, yet the volume can only be described as above average – certainly not in agreement with the effort required to propel the market through this range. In other words, Wyckoff’s third law of effort and result: the two are in disagreement. It is once again an example of benchmarking where we consider price and volume with other candles for comparison and confirmation.
Finally, we are also approaching the late August top at 4540, which triggered the reversal into September.
So, in summary, enjoy the ride higher, but the warning flags are fluttering in the strengthening breeze.
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