And so it proved to be and since writing the above the session closed with two confirming signals. First, the strength of the buying which appeared late in the session, as evidenced by the depth of the lower wick. Second, the volatility trigger which confirmed the price action had moved outside of the Average True Range (ATR), and when this is coupled with high volume, it confirms the presence of the market makers and big operators and we can therefore expect one of two things to happen. Either congestion within the spread of the candle itself, or a reversal. Furthermore, as I explained in Monday’s analysis, the VPOC was waiting below as denoted with the yellow dashed line and further reason to expect this reaction to be no more than a shakeout as opposed to the start of the big short.
Now with the FOMC out of the way, markets are waking to sunny uplands with the yen complex in a bullish mood. Of these the CAD/JPY is leading the way helped by oil and whilst this analysis has been centered on the NQ E-mini, the same thoughts can be applied equally to the ES E-Mini and also the YM, with all three moving firmly higher and looking set to recover Monday’s losses in double-quick time. And with a low volume node ahead and a breach of the price-based resistance in the 15,000 region, the outlook looks positive once again but it is one that needs to be validated by volume.