In today’s update, I dive deep into the S&P 500 emini ES futures contract to show the S&P is hitting support at the 2900 area. We identified this area 5 days ago during out Monday update.
From the charts
The daily ES chart showed all three support levels have been broken to the downside. We see huge selling pressure increasing daily as the price continues to drop down to key support levels identified earlier this week. We are now at the 2900 area today, and holding.
With volatility exploding up to levels we haven’t seen since 2018 (over 47), this might be a bit overextended. I show that the 2018 correction was about 500 points, and this current correction is about 530 points… so we are due a pause, consolidation, and possible reversal rally.
The Hawkeye Perspective
Volume continues to show us where price is going, and how to respond. Historically, when this much selling pressure (volume) occurs in any one week period, a sharp reversal occurs to at least 1/2 of the ATR of that weekly bar. It is our Widebar rule, and Hawkeye members know exactly how to follow that rule. After all, we are trading probabilities and managing risk. So learn all about trading Volume HERE.