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gassah
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Everything posted by gassah
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SPY comes up to a high volume node (actually the volume POC) today from a composite started on 4/18 and gets rejected. How could W not use MP?
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I'm not sure what this is?
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Basically, yes. I only do it for SPY and it takes 9m a day in Excel to do the entire Trend Barometer and OP. All the calculations are derived from the same waves so it isn't a stretch to do them all at one time. I don't follow SMI's rules for the wave determinations. Wyckoff never actually stated his rules for how to determine which bars go into what waves and I mainly differ from SMI by placing climax volume into the next wave instead of going by where price turns around. I think this is a better reflection of supply and demand.
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If you take the OHLC of the intraday volume plot and make daily candlesticks from them you get what SMI calls the Optimism-Pessimism Index (OP). You can use it to identify divergences with price or to see volume strength or weakness as at the Jan low where volume climaxed first and led price higher.
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I prefer to keep them separate unless price accepts back into the top range. If it does then we'll be looker at a larger, longer-term range whereby the combined profiles would apply. BTW, I've only been studying MP for a few months, fwiw.
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heretodaygone... I don't recall Wyckoff ever addressing gaps or the other questions. Db?
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The attached is a SPY wave for the past four days. The bottom graph is volume and you can observe the relationships of the waves. I highlighted the the large move up that wasn't supported by volume and the next wave up that had disproportionately high volume suggesting the presence of supply, IMO.
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Here's a little from the course. The chart examples are too voluminous to post. I'm not sure what Wyckoff used for Activity. SMI uses volume/time for Activity today. Even if you plan to become an active, day-to-day trader, it is better at first to learn to analyze the market’s tape action from a Wave Chart rather than from the tape itself. The chart teaches you to become a sound judge of the market, for by its use you become familiar with all the elements necessary in successful trading: judging the lifting power as compared with the pressure; the market’s responsiveness or lack of responsiveness to the rotation of supply and demand; the speed of the advances and declines as measured by the net price change and duration of the buying and selling waves; the character of the buying and selling as revealed by proportional changes in activity and volume on advances and declines; and more especially, the changes from strength to weakness, from weakness to strength, and back again. All of these factors are revealed by the Wave Chart. It is the pulse of the market. ...This closing price then becomes the starting point from which you carry forward your chart of the buying and selling waves for the next and succeeding days. Thus you will have a continuous, zigzag line which portrays the market’s price action from the one session to another, minute by minute and from hour to hour; and from this chart you are enabled to judge the factors of: 1. Price movement – the number of points advance or decline. 2. Time elapse in each movement – up or down. 3. Comparative lifting power or pressure on each up and down swing. ….Thus far we have not considered the volume of trading nor the activity because it is better, first, to learn to judge the factors just enumerated – i.e., Price Movement, Time and Comparative Lifting Power or Pressure. After you have mastered these, you should begin the study of volumes and the intensity of action (activity) in connection therewith. This will give you added understanding and power. (Incidentally, it should be noted that the activity index has no relationship to the price movement as recorded in the Wave Chart table, and it is only indirectly related to the time and volume figures because it represents the rate at which orders are flowing into the market, not a ratio between time and volume.) …when volume is increasing while price is rising or decreasing while price is declining, the inference is usually bullish – unless the increase is unusually large, in which case the sudden increase may indicate the culmination of the particular movement accompanying the abnormal volume. Similarly, when volume is increasing on the down waves and decreasing on the up waves, the indications are usually bearish – unless the volume surge is abnormal, in which case the abnormal volume may indicate the approach or the actual culmination of the movement. The chart studies which follow will illustrate….
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In fact, I think W looked at average wave volume also and called it Activity, volume divided by time. I'll check it out to be sure.
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He even developed a few indicators based on intraday wave volume, time and momentum that SMI calls the Force, Momentum and Optimism/Pessimism Index today. Someday we can take a look at these. Few people realize that W used indicators.
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Definitely. I'll post some examples this week from the course.
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Oh, and Ord's book comes in an ebook version from http://www.ebooksabouteverything.com/
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I read his book today and he does cover climaxes separately. I thought it had some excellent ideas. And yes, Barros and Ord state their Wyckoff wave influences. I'm enjoying the new tools.
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Ray talks about Ord today. http://tradingsuccess.com/blog/314-314.html
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Following the supply line break it's very common to test the low before the break, so this just needs to be part of the plan.
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I made that comparison yesterday. I wouldn't get the Ord program because all it can do is make the swing average volume calculations. It literally does nothing else. Not one other indicator, not even a moving average. For a few hundred more dollars you get a complete TA program with MA, including the above calculations. It isn't as pretty and takes a little more time. It depends on how many securities you will follow. You might consider the Ord program if you are looking at dozens of stocks.
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Oh, and yes, I have read both of Dalton's books.
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Hi Dan, Thanks for the feedback. Half of Alexander's book is a concise, quick review of MP. He focuses on "Key Reference Areas (KRA) that are inflection points of specific areas where we need to be making decisions about trade opportunity." KRAs are: Range extremes (this can be the day's high/low, a previous day's high/low, or the high/low of the range of a composite High volume nodes Single prints and/or high volume rotations Buying and Selling "tails" The Value Area High The Value Area Low "Here are a few other points we learned from the previous examples that apply as we develop our trade Strategy: The best trades occur at the extremes: Near the extreme of a wide Initial Balance Area Near the extreme of the 10-day ATR Near the extreme of the previoius day's high or low Near the extremes of a composite profile (balance area) Near the extreme of a wide Initial Balance Period Near a time extreme - first 30m or 60m IBP The book is short and to the point and will be easy to go back to and find the strategies and tactics. I really like his use of high volume nodes and 3-5 day composite profiles.
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W analyzes intraday swings in the course and I've wanted to apply it to daily and weekly charts but have never gotten around to it. It would be nice to be able to anticipate the transition from trend to range and vice versa before either one is clearly defined, so that one can switch from a trend following to a range bound strategy in a timely fashion. Attached is the SPY daily using the trial Ord program. It looks as though the end of the trend in 2007 could have been anticipated with this data. The red numbers are the average volumes per swing that Ord prints out but it looked to small to post. I've added the % change for a couple of swings. I think the first clue to the end of the trend was the high volume reaction at BC with 140m average shares vs. the 68m from AB. This might be called preliminary supply. The CD rally is shorter than the AB swing (14% gain vs. 20%) but volume is almost double (120m vs. 68m). This is similar to an up bar with a more narrow spread on much higher volume; or supply overcoming demand. The third clue, if two weren't enough, was the large volume DE reaction with the 100% retracement of CD. Both, in and of themselves, suggested a range formation. The low volume rally, EF, with the volume cut in half allowed for the anticipation of the upthrust at F.
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I don't have the book with me but he does provide strategies.
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BTW, I don't own the DVD. I'm just going by what he has taught on his blog.
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What are Constant Volume Bars?
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I might have an interest in the software because I'd like to have something that measures swing volumes and use it in other ways, otherwise....
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Yes, I do. Of all the books this is the only one I'll probably go back to. I also like Ray Barros' MP ideas but his DVD is $3200! nic
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This SP500 weekly shows the lower 3rd STD of the first profile becoming part of the value area of the larger, combined profiles?