Tuesday, April 21, 2009

Identifying Overhead Supply in the Stock Market


Here is a recent snapshot of my trading screen. If you click on the chart, you'll see how large volume entered the market around 830 in the ES, as buyers brought in fresh sellers putting the market in balance. That is why I tweeted that this established 830 as a near term resistance area. For very short term traders, these volume surges are often good points to take profits or even fade moves, as they suggest that buyers and those covering shorts are meeting overhead supply.
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2 comments:

S Benard said...

Was that 8:30 CST?

I assume that it was based upon the time when spike in activity occurred on my own charts. I use a proprietary volume indicator that shows a similar result.

dexter said...

Hi Brett, I've been trying to setup your NYSE Tick indicator on Tradestation. Is it difficult to do or is there a prepackaged configuration? Thanks so much. Dexter