Hey Trader,
Shorting Economic Data Rally Based On Hawkeye WideBar And Volume Climax
Anthony Speciale here with Hawkeye Traders. I hope you're having a fantastic day!
I wanted to take a moment to share a trade setup I executed this morning, breaking down my thought process and the key factors that led to a successful outcome.
I've also included a video below showcasing the latter part of this trade in action.
The Morning Setup
At 8:30 AM Eastern Standard Time, we had significant economic data releases: unemployment claims and CPI numbers.
These reports created an intraday trade setup for light sweet crude oil futures.
For this analysis, I'm using a 5-minute chart, meaning each candle represents 5 minutes of price action.
Key Indicators and Decision Making
Following the economic data release, we observed two wide bars back-to-back, signaling strong market movements.
This observation became instrumental in my decision-making process and that of others trading live with me.
I pointed out that we would likely face resistance in this area.
Specifically, I noted that if we couldn't close above the 8:30 candle, there was a strong chance that prices would fall back to $82, and subsequently to $81.80.
These predictions were based on our technical indicators and historical price movements.
The Trade Execution
Here’s how it unfolded:
First Target: $82
Second Target: $81.80
From the high of the wide bar candle, there was an opportunity to capture approximately 50 ticks of profit followed by another 70 ticks.
The price did indeed fall to our predicted levels, providing a lucrative intraday setup.
Why I Believed the Market Wouldn't Go Higher
The decision to anticipate a price drop was reinforced by witnessing a volume climax.
At 8:30, there was an ultra-high surge in buying volume, marked by a red volume radar dot and a wide bar print.
This scenario is a textbook example of a potential reversal, regardless of whether it's temporary or for the entire session.
Recognizing this, I alerted LIVE traders that crude oil might struggle to push higher.
The market did fail to close above the 8:30 candle, as anticipated, and subsequently fell to our targeted prices.
Understanding the Volume and Price Relationship
One crucial concept that helped in this trade is understanding the relationship between volume and price action.
High buying volume with no follow-through often indicates a potential reversal.
This pattern, combined with our technical indicators, made it clear that the market was likely to decline.
Invitation to Learn More
I believe that mastering the relationship between volume and price action is vital for any trader.
Below, I've included a link to a webinar where we can dive deeper into this topic.
By understanding these concepts, you'll gain a leading edge in predicting market movements, whether you're day trading, swing trading, or position trading.
The indicators discussed in this setup work across various platforms including TradeStation, TradingView, NinjaTrader, and MetaTrader, and are applicable to stocks, futures, forex, and cryptocurrencies.
Join Us for a Webinar
I invite you to join me in the webinar to explore these concepts further.
Click the link below to register. Let's get these indicators working on your charts and enhance your trading strategy.
I look forward to seeing you there and in our future videos. Thank you for being part of our trading community. God Bless!
Happy Trading,
Anthony Speciale
Speciale Analysis
About the Author:
Anthony Speciale is a seasoned market analyst with over 13 years of experience trading. Through his platform, Speciale Analysis, he offers in-depth market analysis, interpretation, and expectations designed to help all types of traders, at every skill levels reach their full potential.
Analysis, Interpretation and Expectations
Day, Swing and Position Timeframes
Daily LIVE Market and Orderflow Analysis
NOTE: Trading involves significant risk, and it's essential to approach it with a well-defined strategy and a disciplined mindset. This blog post is intended for educational purposes and should not be considered financial advice. Always conduct your own research and consult with a professional before making an financial decisions. For further risk related information, please refer to: www.specialeanalysis.com/disclaimer
Comments