Tuesday 31 July 2012

Unusual activity on ES at today's close

I noticed that the volume of the last two 1 minute bars on the ES were abnormally large.  They were around twice the normal volume at this time of day.  So something is occurring.  Also the RPM histogram on the 50K volume chart were also extremely large, telling me that there was an unusual large amount of speed involved.  It seems that the SM are setting up for a large move over the next couple of day's, which could last well into next couple of weeks. 

This activity occurred at a demand level from the 25K tick and 50K volume charts.  This would normally tell me that a large amount of buying has occurred.  However, this could actually be the first sign of a large sell off, as the SM knows there is a lot of demand at this level and this is where they can get a lot of orders filled without moving the market against their selling.

I am expecting the recent rally to continue tomorrow and into Thursday. But as it is NFP on Friday, then I would expect the next large sell off to take place, possibly into good NFP figures.

Over the coming 3 day's we have a lot of very important economic and news announcements from both Europe and the USA, including the FOMC tomorrow.  So, I believe that the SM are now getting ready to move the market one way or another and that this is the first sign of their intention.

I do not know which way the market will be going, but I will stick my neck out and say that we should expect a large sell off on Friday.

If you read about my earlier trades, then you would know I was only taking shorts as price was in a downtrend today.  I had already finished trading when the best move of the day occurred.  Price had moved up to an intraday level and fell over 150 ticks into the close.  There was another good breakout trade to be had from it.  I never used to like taking breakout trades, but with the RPM and VPI indicators, I can now see where the best breakout trades occur giving me a very high probability and low risk trade. I have attached the 10 range CL to show the B/O trade.





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