Wednesday, March 7, 2012

heavy vol: blow off

so often in futures market --   I see a huge 1 min. vol. candle as it blows past a known resistance area into a new level     /es 1340  -- blows to 1338.50 on huge vol -- and it's a perfect bottom!

 But of course -- when 3 minutes pass and market does not go any lower -- it's obvious those were stop orders blown out -- and the pressure to go lower is exhausted.  The market is now full of victorious shorts -- except they have to cover and there's no more buy stops to help them out -- so the bounce occurs.

 Waiting for this big volume surge  (often on the hour) will clear the way for a high-probability reversal.  If the Blow-Off (BO) Candle occurs on a 3 pt. trendline --even stronger.

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