S&P 500 emini futures showing buyer exhaustion with many open Gaps.
The emini futures is showing many downside open gaps, these are considered targets for swing traders when the charts show a reversal in this very powerful bull market.
Buyer Exhaustion occurs when buyers have bought too much and gradually their buying drops off as the price gets too high. Here is a chart showing the decreasing volume on the move up that is relative to buyer exhaustion.
There are 5 open gap targets to the downside, and two to the upside. Major support at 2309 with the 50 Moving average would be a good target if the S&P500 sellers would move in. The S&P500 emini hasn’t had a 1% pullback in 101 days. This is a long time for not even a 1% pullback. That is close to 24 points.
There is a red arrow marking 1.67 million volume on a high volume trading day where buyers exhausted and then there was an engulfing candle showing the turn. The days following have shown decreasing seller volume with a fall off to 703k shares traded off of open on Monday.
When volume falls off like this we are normally waiting for news to get direction. March 15, is full of news on the budget and FED interest rate policies. No one knows how the market will react, so if you are inexperienced in trading volatile markets it is best to stay out and protect your capital.
Buyer Exhaustion normally occurs on a high volume day at the end of a trend.
Although, the long term trend is bullish, the S&P500 could be experiencing a small pull back. Seasonally, March through June has been positive over the past 20 years. But considering the “Trump Effect” and the 3 month rally the S&P500 has been experiencing, it could be time for a pull back. Watch out for the news and always manage your risk.