Intervention Short Squeezes and Emini Level Update April 18

Apr 18, 2016: 11:30 AM CST

Let’s look very closely at a recent blatant pattern of intervention during the current market rally that occurred once again this morning.

We’ll start with the recurring price pattern and then plan our trading levels for the day:

Here’s the Intervention Pattern:

First, price gaps down strongly overnight or off the open.

Second, buyers rush to put on positions, stabilizing the market and buying aggressively into the selling.

Third and finally, buyers overcome sellers and sellers become buyers as a forced short-squeeze propels price higher.

The Intervention Pattern occurred at least six times from March 24th (and more before then).

That’s what we’re seeing right now – a similar gap-down, an intervention by buyers, and a forced short-squeeze.

Love it or hate it, it’s reality and we must adapt to reality – price patterns help us see the hidden supply/demand relationships.

Let’s move now from the Intervention Pattern to the levels and today’s price action chart:

Today’s Intervention buy event logically came off the 2,065 price pivot (two prior reversals) as highlighted.

Price currently is creating a Bullish Engulfing Candle which means price has (almost) totally traded through the high and low of Friday’s session and rests at the highs currently.

We’re in “Open Air” territory and you can look back to any of the prior Intervention Patterns to see what happened next and how to plan your positions for the current pattern.

In volatile markets like these, focus on lower timeframe charts like the 5-min and 1-min chart for trading smaller retracement or flag opportunities that develop in real time.

Monitor the intraday structure and adapt quickly to any sudden changes such as breakouts or intraday reversals.

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Corey Rosenbloom, CMT

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One Response to “Intervention Short Squeezes and Emini Level Update April 18”

  1. Pattern of Intervention During Current Market Rally - Says:

    […] By Corey Rosenbloom […]