Whilst the daily chart for YM Emini continues to move higher, the pace at which the new level is achieved has been reduced to a crawl as this index climbs the wall of worry, a wall which the NQ Emini has abandoned for the time being as it slides in the opposite direction, whilst the ES Emini remains undecided. So in terms of balance, we have one of each, up, down, and sideways and hardly a ringing endorsement of a longer-term bullish rally which is now looking increasingly fragile as we approach the outer reaches of the VPOC histogram on the daily chart of the YM Emini.
As we might expect in August volumes are reduced and it’s, therefore, no surprise to see a decline in volumes compared to earlier in the year and whilst yesterday was a positive one for this index, in terms of breaking free from the recent congestion the price closed at 35,155 just beyond the ceiling of resistance at 35,100, so plenty to be cautious about, particularly given the lack of any positive support from the ES and NQ futures. Even stepping down to the weekly and monthly charts confirms we are at the extremes and edging into new high ground, of which edging is perhaps the most appropriate phrase. What is likely to dictate the medium-term direction is the reaction of the other two indices over the coming days, and if they continue to flag weakness, then this may be enough to see the cracks develop into a full blow rupture in the coming week or two.
By Anna Coulling
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