An interesting week in the ES.
Last Tuesday, the first day back from a long weekend in the US and Europe, the ES broke above an intermediate resistance zone.
Despite high buy volume, price failed to take out the prior day’s high that had less volume.
Being a Friday, not too many people wanted to have open interest in the market lest they get caught on the wrong side of the move.
There is obvious hedging going on. Friday was the last day of the May – month end and the start of a new quarter. Is seasonality coming into play?
Traditionally we would be going into a holiday season. However, there is nothing normal about this year. This year there will not be much ‘going way’ in terms of holidays. Staycation is the new vacation amid the virus pandemic. Would not be surprised to see liquidity drying up. However, the White House always keep things moving and interesting, so expect a lot of volatility.
Remember that this recent uptrend is correcting the plunge that started in February.
Currently price is working through the plunge’s consolidation area. Price is likely to test the high of this zone and pullback.
On a Daily TF, I am expecting that, once price has tested the highs of the consolidating area, it will come back and retest the support area before continuing higher: this is baring any unexpected news and geopolitical events.
Always wait for the price to tell you what it is going to do. Be patient, do jump into trades because of an uptick or down tick. Let volume confirm the trade for you.
Last Tuesday, the first day back from a long weekend in the US and Europe, the ES broke above an intermediate resistance zone.
Despite high buy volume, price failed to take out the prior day’s high that had less volume.
Being a Friday, not too many people wanted to have open interest in the market lest they get caught on the wrong side of the move.
There is obvious hedging going on. Friday was the last day of the May – month end and the start of a new quarter. Is seasonality coming into play?
Traditionally we would be going into a holiday season. However, there is nothing normal about this year. This year there will not be much ‘going way’ in terms of holidays. Staycation is the new vacation amid the virus pandemic. Would not be surprised to see liquidity drying up. However, the White House always keep things moving and interesting, so expect a lot of volatility.
Remember that this recent uptrend is correcting the plunge that started in February.
Currently price is working through the plunge’s consolidation area. Price is likely to test the high of this zone and pullback.
On a Daily TF, I am expecting that, once price has tested the highs of the consolidating area, it will come back and retest the support area before continuing higher: this is baring any unexpected news and geopolitical events.
Always wait for the price to tell you what it is going to do. Be patient, do jump into trades because of an uptick or down tick. Let volume confirm the trade for you.
It might fall a tick or so short or ran through by a few ticks but the move down will be sharp.