Pullback Finds Some Buyers
The E-mini S&P 500 opened above a resistance zone established yesterday. However, the TF5Um5D study was negative at the start of trading indicating sellers were hitting bids. The market started to recover and the T5Um5D study moved into positive territory, but the buyers could not attract a following. Prices then fell to a support zone and the T5Um5D study diverged. This indicated that the lower prices were not attracting more sellers. The T5Um5D study formed a pivot low (double blue arrow) and the market started climbing. I like to see the TradeFlow Volume Study confirm buyers are coming in by the green histogram bar (point A) being taller (trades at the ask) then the depth of the red histogram bar (trades at the bid).
Yesterday’s TradeFlow view required three day’s of TradeFlow action to gauge the price behavior, not uncommon following an FOMC announcement. We can see that following the open, the price hit a resistance zone, and then the market tumbled slicing through a support zone. The TF5Um5D study form a pivot low when the price was in the support zone.
The market traded down to a support zone from last Friday. The TF5Um5D study did trace out a divergence when the market was in the lower support zone. The market rallied from there.
To read more about these two custom studies, please check out my article TradeFlow Custom Studies.