We would all be well advised to remember the sage words of Jesse Livermore who once wisely advised a price is never too high to buy or too low to sell as we consider the weekly chart for the ES emini index which is now nervously approaching new high ground. The all time high of 2956 back in September 2018 is now within touching distance, and was the precursor to a plunge in stock markets globally, with the ES index shedding over 600 points in the process. No wonder traders and investors are now eyeing these levels with great caution!
So what does volume price analysis reveal?
First, the volume over the last few weeks on the up candles has been sustained and above average as we move firmly away from the volume point of control at 2750 and denoted with the yellow dashed line. Note how this breakaway was delivered on excellent high volume confirming the bullish sentiment, with last week’s price action closing with a solid wide spread up candle on good volume as we await the start of trading this week.
Moving to the volume on the Y axis of the chart, here too we have positive news with a low volume node now immediately ahead in the 2950 region and just below the all-time high. The trend monitor indicator confirms this bullish picture, and once the all-time high is taken out, then we can expect to see a further move higher in due course when nerves will no doubt calm, and with the VIX now also moving lower towards 13, helping to provide further upward impetus.