The Daily Market Forecast

Friday’s Results: The suggested buy at 4108.00 caught the low of the session and ran for 43 points. The high of the market was another volume level (unpublished here). 

Quick Tip: Volume Leads Price

For as complex and chaotic as the markets are, technical traders only have 3 variables to analyze. Price, volume, and time. Most technical traders agree that volume LEADS price. 

Price moving up with volume increasing is very bullish. It’s hard evidence that plenty of buying interest is happening. Conversely, price moving up with decreasing volume is not as bullish. 

Price moving down with volume increasing is very bearish. More hard evidence. Conversely, price moving down with decreasing volume is not as bearish. 

How do you use this data? Entries AND exits!

If you’re a breakout trader and volume is surging at your entry that’s good news. If you’re a reversal trader and volume is decreasing at your entry that’s good news. Confluence. 

Similarly, if you’re in a position and volume is decreasing (either direction) then scaling out and banking profit makes sense. 

There are many ways to look at volume: pure volume, averages, oscillators, bands, accumulation, and more. Invest some time finding what resonates with your strategies. 

Today’s Best S&P Turning Points (in fast moving markets consider a wider stop and less size): 

Sell 4292.50 stop 4297.50 (highly unlikely but that’s what the chart says for now) 

Buy 4137.25 stop 4731.50.

Trade Fearlessly,

Mike Siewruk

 P.S. What’s more important in trading? Math or emotions? Learn how to change your unwanted behavior here.