Stocks sell off as expected

As I had expected, stocks continued to sell off toward the end of the day. This is the S&P500 futures 15 minute chart.

You may note, however, that the Klinger volume indicator showed renewed and enthusiastic buying activity. As the buyers soak up all the selling activity, we may eventually expect that the market will reverse if/when the buyers gain the upper hand again.

A fresh wave of selling, perhaps if buyers capitulated and then changed into sellers, would cause another strong price push downward. At that point, the Klinger indicator would indicate more selling as the color turned red and crossed beneath the yellow trigger line (which is apparently an MA of the red and green line). I would use this as a signal to create a new short position, or add to an existing one (I don't have one at this writing). In this chart, it appears that the Klinger indicator might be hinting at just such approaching buyer exhaustion.

Needless to say, while the Klinger volume indicator shows us that heavy buying activity is occurring as an undercurrent, it, by itself, can't tell us with precision when to buy. It is still an extremely valuable indicator because it is leading in nature, and therefore alerts us to the strong probability of a reversal soon. However, since the Klinger indicator isn't precise as to when this will occur, that's why I have combined it with the Hull Moving Average or the Exponential Moving Average to advise me when the reversal takes place. I also use the Guassian filter, another form of Moving Average, and (obvious from the charts) Bollinger Bands as well.