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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