A real game of two halves today in the US day trading session with the risk off sentiment expressed in the first half, duly replaced with a return to risk on, as the major US indices and exchanges reversed all the losses of the first part of the session to close near or above the opening price.
In this session we focused on the YM emini index with some classical price action, both intraday and on the daily chart itself. Volume price analysis as always is the starting point, and with last week’s NFP still fresh in the mind, the prospect of rising interest rates had taken their toll on the markets. However, on both the 4th and 5th of October, whilst the indices fell during the session, they also recovered off the lows and more importantly on high volume, sending a clear signal that the big operators were buying and absorbing the selling pressure. Indeed this was the pattern we saw during the webinar, with the dramatic moved lower then reversed and ending the day above the open price and with a deep wick to the lower body once more and again with excellent volume. The buying which created the reversal was instantly clear to volume price analysis traders.
From a relational perspective it was also very easy to see when and why the markets had reversed in sentiment simply by considering the yen index and the yen itself on the currency strength indicator – a signal too strong to be missed with the yen selling off strongly and with the yen index falling.
So a great session once again and one where there was money to be made on both sides of the market, and as always made easier when coupled with the power of the Quantum Trading indicators, helping traders to get in, stay in and then get out at the right time. And in summary, a terrific day for reversal traders in the major US indices and stock markets.