Fridays volume distribution comment:
I am just going to comment on the afternoon action here. The afternoon was interesting in that the S&P futures were pinned just under
VWAP for a good deal of the afternoon. The afternoon did show a 'higher low' vs the morning low (1448.00 vs 1447.50). Volume began to build at 1452.75 and reached above 40k contracts, a 'rule of thumb' level for me for what constitutes good trading. The market had opened at 1464.75 and thus was building up significant volume low in the range.
Thus, for most of the afternoon we appeared to have little buying interest above the
VWAP price near 1456.50 but significant buyers near 1453.00. This led to somewhat of a stalemate for a while. As soon as price was able to climb through
VWAP late in the day, it shot up to 1464.00.
Here were the pieces I put together for a profitable long trade:
1. The higher low in the afternoon is a factor that argues for a long.
2. Building volume low in the range (10 pts below Opening Price) is a factor that argues for a long.
3. The market kept faking lower after testing
VWAP but not following through.
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I decided to take a good breakout away from 1452.75 that also exceeded
VWAP and went long 57.75. I exited 1463.75 as it challenged the morning 'selling tail' high.
