Custom ActivityBar Study - October 14, 2013

While the Dow Jones has experienced an increase in volatility with the U.S. government shutdown, it is interesting to take a step back and see how recent activity relates to past trading activity.

The chart reveals a custom ActivityBar study that shows the cumulative price distribution of the E-mini Dow Futures Continuous Contract (@YM) for about the last 3 months with no volume filter. The distribution reveals 2 mounts and the current price action is right in-between.

This may suggest that the Futures contract may be range bound in the near future, roughly from 14,900 to 15,300 (see highlighted area in the chart). By the way, these levels could go unnoticed on a regular price chart. Also, a break to the upside or to the downside could generate a sharp continued move in the same direction.

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Written by Frederic Palmliden, CMT, Senior Quantitative Analyst, TradeStation.