As each new year comes around, and we celebrate the new and say goodbye to the old, as traders we are never sure what it is precisely we are welcoming in, or indeed saying goodbye too.

Is it more of the same, or a transformation, and for 2016 so far it has been the latter, with January exhibiting some wild price action as risk on appetite vanished faster than a sprig thaw, with markets collapsing and the big short being called once again.

At times like these it is all to easy to become enmeshed in the rhetoric, and to believe that the end of the word is nigh. Indeed with screaming headlines, and images of the typical trader, head in hands to the fore, it is hard to swim against the tide, but swim against it we must, and for perspective and balance I find the weekly charts provide a more measured picture of supply and demand, and more importantly a view of the buying or selling by the insiders. And one example here is the weekly chart for the YM emini (DIA, quote) for the March contract which helps to contextualise the price action of the last few weeks.

If we begin with the various support and resistance levels on the chart, it is the deep areas of resistance in the 17,850 which ultimately proved to be a bridge too far for any further advance of the longer term bullish trend for the YM, with the index ultimately capitulating once again in January having tested this region off a similar pattern of price action in August last year.

Indeed, the current phase of price activity is similar in many ways, and indicative of strong buying coming into the market following a sharp move lower. The initial stopping volume this time around has been less dramatic, but nevertheless self-evident, and indicative of buyers returning on relatively high volume, as the market tested another important level, this time the platform of support now building in the 15,400 area.

This was the level which duly held back in 2014, following another period of short term weakness, and again one followed by an equally strong recovery. What is perhaps most illuminating about the last four weeks is the depth of wicks to the underside of the candles. Each of the four has a deep and well-developed wick supported with well above average volume, all suggesting we are witnessing a phase of price accumulation with the prospect of a recovery and move higher in due course.

The bounce in 2014 was almost instant, but in 2015 was more measured with the market duly recovering after several weeks. This now looks to be following a similar pattern, and provided buying continues at this level, and selling pressure duly absorbed, we can expect to see markets return higher once again to take out some key levels, not least the levels at 16,450 and 16,970 and ultimately back to test the VPOC itself in the 17,400 area.

Anna Coulling is a trader with over 16 years’ experience and founder of AnnaCoulling.com