A September Breeze Replaces The Storms Of August For Equity Markets

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US emini indices

With the summer holidays now a dim and distant memory, overshadowed for some with the extreme volatility which rocked the markets, September has breathed fresh life and optimism into US equity markets which have shaken off the summer woes and reinstated a more measured and even pace higher as risk on sentiment builds, and is reflected across the markets. As always it is interesting to compare the performance of the three sister indices on a daily timeframe with the futures for the YM, the NQ and the ES emini contracts and whilst all reflect the change in sentiment, there are subtle differences.

The YM (Dow 30) has continued higher with six days of straight gains, closing higher on each, with yesterday’s candle ending on a wide price spread and racing through the low volume node on the volume point of control indicator in the 27,000 area on solid volume. However, more sustained volume now awaits between the current price of 27,105 and 27,200 which may hinder progress, yet there is little in the way of price based resistance on the accumulation and distribution indicator with the minor level at 27,000 breached ( the red dashed line) in trading yesterday. Note the trend monitor indicator which has transitioned to blue and confirming the move higher.

Next is the NQ (Nasdaq 100) and here we have some significant differences. First, the index has struggled over the last few days, closing lower on two occasions, but with the buyers stepping in on the second of these on high volume confirming bullish sentiment remains intact for the index. Second, this index is battling through heavy volume on the volume point of control histogram and in addition has an extremely strong region of price based resistance as denoted with the red dashed line of the accumulation and distribution indicator at 7,888 which has been tested several times, more recently yesterday. However, once breached this will provide an excellent platform of support to a continued move higher. Once again the trend monitor indicator confirms the bullish picture.

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