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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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...If the dots don't connect, gather more dots until they do...




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Saturday, March 01, 2014

Big Sustained Volumes Now Needed

According to the following 4-Hour charts of the YM, ES, NQ, TF & NKD, we'll need to see big sustained volumes enter to push and hold these markets over their resistance levels (on the YM, TF &  NKD) and keep them above their resistance levels (on the ES & NQ).

As you can see from their respective Volume Profiles along the right-hand side of the charts, volumes have been steadily decreasing on this last major leg up. Just how much new money is committed in this latest rally and will it be sufficient to fend off any major profit-taking that may occur and still keep prices elevated at or above their current levels?

The following Daily ratio chart of the SPX:VIX tells me that although the ES has made a new all-time high on its price chart, the conviction buying is not evident on this ratio chart, as no new high has been made there...echoing the lack of conviction depicted on the Volume Profile.

Meanwhile, Oil continues to push higher, as shown on the following Weekly chart and has reached one resistance point...its upper Bollinger Band...but still remains below its next Fibonacci retracement level of 106.30, where there is also a confluence of resistance on its Volume Profile, as shown on the following 4-Hour chart.

The following Daily ratio chart of WTIC:SPX shows a higher high has recently been made, indicating that Oil has been slightly stronger than the SPX lately...look for this to continue if we see profit-taking enter the SPX and for the Momentum indicator to drop below the zero level on the SPX:VIX ratio chart noted above. Near-term support on this WTIC:SPX ratio sits around its 50 MA (currently at 0.054), while near-term resistance lies at its 200 MA (currently at 0.058), followed by price resistance at 0.060.


The foregoing comments are, basically, in line with what I reported in my last post on February 16th. If tensions continue to mount between Russia and the Ukraine, we may see volatility begin to elevate in the coming week(s) in, both, the Major Indices and Oil. The question is, which will the markets favour in that instance?