In this video, we take a look at some interesting action we are seeing now in the equities markets which are really volatile with the whole "US vs China" trade war in the news.
The index futures are swinging wildly one way or the other. In this video, we take a look at how excess is often the first sign of the end of a move - even before absorption becomes apparent.
We see moderate or low trade as the market puts in a move. As the pace of trading increases to extreme values, we see it abruptly stop. As if the extreme amount of trade wasn't much more than "FOMO" - or "Fear Of Missing Out" that attracted market makers on the other side to step up and absorb their selling (all action we see in the video is to the downside).
The video has 2 examples from the index futures and one from Crude.
This is one to study, especially for those struggling with index futures right now. Note - the stuff on correlations is also really important at the moment if you want to get trades that follow through.