This is my favorite reversal signal

The Hawkeye Traders E-Letter — Your No. 1 Source for Volume Trading Insights

Hi Trader, Earlier this week, I told you how Hawkeye allows us to see the true intent of the market as it plays out in real time. Of course, this helps give us the highest probability of finding profitable trades… While minimizing our risk. Well, today I thought I'd give you an example of how Hawkeye volume helps keep us safe from common market traps… Along with one of my absolute favorite reversal signals. Essentially, it boils down to red tops and green bottoms. Here, let me show you what I mean…

Check out this chart of the S&P 500 E-mini futures (ticker ES). Now, this particular chart is also a great demonstration of the Opening Price Principle. You see at the top left how the price starts barreling downward at the opening of the market. And the volume bar at the bottom of the chart confirms this by indicating RED volume… Which means the sellers are stepping in big time. But look what happens next… Price starts climbing back up to the opening range… And then, there it is — my favorite reversal signal. See that red bar at the top (where the second aqua arrow is pointing)? That's the red top that indicates a reversal is coming. Now, without a clear picture of what volume is doing, most retail traders in this situation would be trapped by this move… Thinking it's a breakout to the upside. But with volume on our side, we see that the momentum is actually turning the other way… And as you can see, price subsequently trades back down, culminating in a breakout below the opening range. Here's another quick example on a 6-minute chart…

Here, we see the opening price came in bullish, as indicated by the big green volume bar at the bottom (next to the first aqua arrow). But instantly we see the price action reversal signal — a red top! What the heck's going on here? This is a classic example of liquidity hunting. See, the market showed its hand at the opening, saying it was a bullish open. But then price traded down, trying to find a better price… And setting another trap for retail traders who will buy into this market. But by leveraging the predictive power of Hawkeye volume, we're able to see what's really going on… A larger-than-average volume bar at the bottom of the chart, along with an engulfing green price bar showing that the market is accumulating at this point, NOT selling off. And what do we see following this classic "green bottom" example? The market trades up the rest of the day. Remember, red tops and green bottoms indicate reversal… But only when you're trading with Hawkeye volume on your side. Now if you'd like to learn more about how the Hawkeye methodology can help you decode the market's true intent… And find high-probability, low-risk trades in any market condition… Then click right here to view a free class and see plenty more examples of Hawkeye in action!

"Crude Corner": Oil Industry Insights, Market Analysis and Price Outlook

Oil prices have rebounded from their recent lows and hopefully the worst is now over. The oil market appears like it may have already turned the corner. Perhaps we are in the inflection right now as we speak. Prices recovered faster than many were forecasting due to lower-than-expected supply coupled with better-than-expected demand. Data from the United States Energy Information Administration on Wednesday showed that the United States production is now 1.5 million barrels per day below its March all-time high level of 13.1 million BPD. Beginning May 1, OPEC and its oil-producing allies took 9.7 million BPD offline, and on this past Monday Saudi Arabia, the group's leader, said it would scale back production further in an effort to boost prices. The EIA's data also showed that gasoline demand is beginning to recover as states start to ease shelter-in-place restrictions. Click here for more insights, analysis and outlook on this week's crude oil action!

The Hawkeye Team

Hawkeye Traders team1@hawkeyetraders.com hawkeyetraders.com

Call us: (888) 233-8598

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