BarroMetrics Views: On Track For A Top?

The price action last night in the S&P supports the view that we are on track for a possible top.

Recall I said in S&P 2015-05-20“: if I was correct that the S&P was rhyming with the 1972 DJIA topping pattern, then, we’d see a correction or the start of a down move this week. On schedule, May 22 may have seen the begining of at least a substantive correction.

The price action yesterday lends weight to this scenario………

  • The E-mini gapped below the first resistance zone, 1654 to 1646.
  • It then failed in its attempt move above it. (Figure 1).
  • Figure 2 is a chart of the Normalised Volume of the cash S&P.

It shows, that for May 23, we had a day where range and volume was normal. In these circumstances, we should see higher prices tday. This is shown by:

(a) the apparent strong rejection of the day’s lower price range, and

(b) the day’s range/volume configuration.

  • But, as Figure 3 (Zoomed Figure 1) shows, the up move petered out at resistance. This suggests that despite the buyng control, the buyers were unable to overcome selling resistance.

Accordlingly, I expect to see lower prices today. And, as long as we don’t see a bullish conviction close above 1654, we are on track for a continuation of the down move.Figure 3 also shows the price action at time of writing.

In the Asian timezone, we see the E-mini selling off.

At the moment, I don’t place predictive value on Asian price action. The test will come in the US time zone. With a Memorial Day long weekend coming up, we should know early of the 1654 will hold.  Stay tuned for a progress report on Tuesday, May 22.

es-290-min-5-period-swing.png

FIGURE 1  E-mini 240-minute 5-Period Swing

sp-nv-d.png

FIGURE 2 S&P Normalised Volume

Chart through the courtsey Market Volume

es-240-min-5-period-swing-2.png

FIGURE 3 E-mini 240-minute

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