Volume Holes

Equities continue to be a mixed bag and while simple price tells one part of the story the volume profile also shows us the ranges where we should expect buying and selling pressure. Of course bear in mind that the volume profile is based on historical context and for a true perspective we would need to acquire fairly costly Level 2 access and then evaluate the offering and bidding lots. For the average retail rat Level 2 access is however way outside the budget so I guess volume holes it is.

Let’s start with price though for some basic tape reading. Clearly volatility has been exploding as of late and that means we need to think in wider ranges and thus protect our positions accordingly. Not that I feel particular tempted right here right now. But generally speaking this chart, on its own, is looking pretty damn bullish as sellers have not been able to get anywhere thus far.

Now let’s talk volume holes. There is a narrow one right about where the E-Mini is trying to push into right now, i.e. below 2440. Once that one is taken out I expect moderate buying which if maintained could propel us to new heights.

The NQ meanwhile is looking a lot less enthusiastic and is still trying to collect itself after last week’s sell off. The bulls are basically on notice here until 5785 (the last spike high) can be breached and thus establish a higher high. We may have a double bottom type situation here but it would have been more convincing had the 6/16 lows not breached the previous one on 6/12.

Now here’s the volume profile on the NQ and it’s looking pretty ugly anywhere starting at about 5760 as I see a ton of selling activity there which may project forward to the here and now. The fact that the ES and YM are more bullish does float even the leaking boat but unless we see a very strong drive upward on the other two I expect there will be upside resistance once the NQ pops above 5760. Ergo, if you’re long here then take partial profits near slightly below that range.

Copper looking pretty polished and orderly this morning and our campaign looks like it may have legs. I’m now advancing my stop to b/e as it’s still early days and the daily panel is still trying to pick a direction.

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