Eiger

VJ made a terrific post on the VSA Part II Thread of the Euro/EUD chart that includes applications of Market Profile. You can see how other high quality analysis can be used along with VSA -- there is nothing wrong with that at all. http://www.traderslaboratory.com/forums/151/vsa-volume-spread-analysis-part-ii-3428-214.html#post58814

Thursday, February 05, 2009 A – Bag Holding – Heavy volume on a narrow spread at the bottom of the pre-market Demand Line. Note the NQ made a higher high at this time! Great clue! B – Bottom Reversal C – Test D – Another Test E – Hidden Test and EOM up with increase in volume F – Narrowing sopread with close in middle on high volume – supply. G – SOT H – No Demand. Next bar is down with narrow spread and low volume – No Supply I – Hidden Test J – Test, next bar is up K – Down bar that closes on lows, but look at the supports and volume from J – K. Supports rise as volume rises. L – Heavy volume on an up bar. Next bar has high volume and spread narrows, close off highs. M – Up Thrust-like bar near yesterday’s high. Next bar is down. N – No Demand. O – First bar where volume increases to the downside - supply. P – No Demand Q – Top Reversal 1 – Volume does not expand as support is approached. Note the narrowing of the spread at support. R – Inability to close above resistance. Narrowing spread & SOT. Volume and spreads are also not near as great as the last wave up. S – Stopping volume. Eiger

Hi VJ, There is a lot in this chart: A - Since this is currencies, I am assuming that this area is occuring before one of the three main markets open. Low volume, narrow spreads - not much interest up or down. The market narrows down into an apex. B - It falls out of the apex on wide spread, increase in volume, close on the lows. We now have our background and know that movement is to the downside C - A weak rally on narrow spreads after the impulse move down. No real VSA signal here, but this would be a first 'choice' location to short. D - More impulse down E - Two-Bar UpThrust/Top into the area where no rally could materialize earlier (Supply). The spread is wide and may have to be discounted by risk rules, but a good short. F - At the time this was unfolding, a probable climactic action as price reaches the Demand Line (reverse TL). Highest volume on chart thus far, wide spread, close in the middle are the clues. G - SC confirmed by the testing at G on lower volume. The lifting supports (lows) at G are a great clue that buying is occuring in this area. Last bar in this area is a Hidden Test. Backrgound is now strength and a long position can be made here. H - Impulse move up on wide spread and strong volume, close near the highs. I - Test - After F, G and H, you know you have have strrength in the background. A good spot for a long trade. J - Reaction and test of the highs made at H. This action telss you in advance the high at A will be reached. Nice chart - lots packed into a small time frame currency. Thanks for posting this, VJ. Maybe I'll take a look at trading these Eiger

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Hi BF, In general, I really only use the 60-min chart for market structure and to id locations for possible trades on the small time frame charts, though it certainly can be of help especially around meaningful market turns. With regard to your question: I don't know about last hour volume comparisons -- I haven't studied that. But, here are some thoughts on volume vis a vis your question: Volume generally is U-shaped during the day - high in the AM and high again in the afternoon. Volume during the middle hours of the day usually falls off, especially during the noon hour. Given this as the typical scenario, look for unusual (above average, high) volume to occur when volume is typically low. This is a great clue on a reversal days where the market sells off in the AM, turns around, and rallies through to the close - you will see above average volume come in usually during the early afternoon. We can see the VSA 'Pushing Up Through Supply' sign of strength occur with this kind of unusual volume. It is also a useful confirmation of a V-type reversals. Sixty-minute bars may not make for the best comparisons, especially in the last hour. The last hour isn't a full hour and ends up being some sort of an orphan. Forty-five-minute bars would give more accurate data and more reliable results from a statisitcal point of view. Sebastian Manby developed a method to read the last periods of the day with respect to volume and spread. You can frequently forecast the first hour's trading for the next day with this; it can be quite accurate. Sebastian uses the 5-minute bars to do this, though. And, it's only good for how the market trades in the opening hour. I thinlk you may be looking for longer term? I do track the 15-minute period volumes and compare the current period with last 20 days' volumes for that period. Volume directly relates to market movement, and I am looking for the presence or absense of professional traders (Other Time Frame Participants, Large Operators, Institutional Traders, Composite Operators -- take your pick or make up your own term if 'Professional Trader' bothers you) who move the market with their volume. In this early AM comparision of volumes, I get a pretty accurate idea of how the day will trade -- active or range-bound -- because of early period relative volume characterisitcs. It helps me frame the rest of the day. I haven't looked at comparing the final periods with prior similar periods to see what effect it may have on the next day or next couple of days. It would make sense to do and I don't see why this wouldn't tell us good info. It would be a relatively easy research project that could be done in Excel. Hope this is helpful, Eiger

Feb 4th Background is always the first thing we look at in VSA. The 60-minute chart is often a good time frame for the market phases and overall background. Coming into today, there was converging resistence from a congestion area (red line) several days ago and the Supply Line (blue line) of the uptrend channel. Both converged in the 850 area. About an hour before the open, it looked like price might not even get to the 850 area as there was a reaction off yesterday's high. A - An upThrust at yesterday's highs, next bar was down and a reaction occurred. Price held it's gains, however, and began to rally 10 minutes after the open. B - Wide spread up bar on strong volume, close on its highs. Price pushed up and through the resistance area of yesterday's highs. C - No Supply back to resistance-now-support. The 3-minute chart had a No Demand in this area. D - very high volume enters as the market nears the 850 resistance area. Spread is wide, and the close is off the highs near the middle - caution. E - More high volume and a close in the middle - supply. F - Again we see an increase in volume, close in the middle. Note the lack of progress made from E to F. Next bar is down - selling. G - No Demand H - No Demand I - No Demand J - No Demand K - Hidden UpThrust M - 2-Bar UpThrust/Top Reversal Plenty of opportunity to get short. N - Selling Climax The supply that came in at resistance had similar principles as occured on Feb 3rd. Careful study of these two charts will serve you well in the future to know what to look for as price approaches resistance, and then what to look for once it starts falling. Hope this is helpful, Eiger

This looks like an uphill climb to me. Butting up against a longer term (from Oct) Supply Line and a fair amount of supply to negotiate in the Nov - Feb trading range. It has made a Spring, but the volume was excessive - again, supply, and springs in a downtrend like this are not high odds trades. The last two days have been constructive with increasing volume to the upside, as you mentioned. Also, the spreads are wider than last week, another plus. The ideal bullish senario would be a rally on good volume and spreads well above the 21 area, with a reaction on low volume, narrow spreads and testing the 21 area. A look at the weekly chart shows that 21 area to be a tough area to negotiate, though.

Feb 3 - Afternoon 1 - Price dips down below the support at N, then closes back above the low of N. Most important is the volume. Note how volume has substantially receeded. This is Testing for supply below N and finding none. Good location for an agressive short. 2 - A small Bottom Reversal sends the market up. Note that a higher low has been put in. 3 - A higher high, but volume falls off here, so we can expect a reaction. Next bar is down. 4 - No Supply. Note the higher lows (green line). 5 - This and the bar that follows is pushing through the supply formed between N and the Globex high - very bullish. 6 - Note the high volume on this bar and the next bar closing in the middle. Had this been butting up against resistance (like it did earlier this AM at H), it would indicate siupply entering the market. Althought there is supply in this volume (there has to be), the market has just pushed up above last night's highs. We now have a Sign of Strength, not a Sign of Weakness. 7 - No Demand, but there is no weakness in the background, only strength. 8 - A minor Shake Out into support. Note that the volume did not expand substantially. 9 - Another new high, though price is closing in the middle. Note the volume. It has not expanded here. Supply is not evident. 10 - The bar before 10 is on low, low volume (no supply). Bar 10 is a Hidden test closing on its highs and a location for a long. 11 - As we rally higher, bar 11 gives us a large increase in volume with a narrowing spread. More selling is occuring on this bar. Note the close of the following bar - caution. Just pure VSA, nothing else. Nothing else is needed, really . Hope this is helpful, Eiger

5-Minute ES for Feb 3, 2009 -- AM A - UpThrust. Market opens at the high of yesterday afternoon (must know your background) on very high volume and closes down, well under yesterday afternoon highs - bearish. Next bar is down and market begins to fall. An aggressive trade is to short on the UT. B - Market falls, but volume recedes. On B and the bar before B, closes are in the middle indicating buying coming in. Note the lack of progress on the lows from the bar before B and B. Next bar is up. C - Market rallies and volume comes in on C, indicating buying. D - As price comes back to the low at B, a lack of supply emerges. E - Bottom Reversal, and bullish. Note a higher low (from the yesterday afternoon low) is put in. F - Market rallies to F where volume suddenly increases at the supply area from yesterday afternoon and today's open. G - As the market reacts from the supply, it does so on receding volume. G is a Hidden Test and a location for a long. H - Volume increases at the Globex high, close is in the middle, indicating likely supply. I - No Demand. J - Volume increases on this down bar after potential supply into a resistance area. This indicates supply coming into the market. K - No Demand. Good location for a short. Next bar is down. L - No Demand. The market is clearly struggling to stay above support (blue line). Another good location for a short. Next bar is down. M - Another No Demand as the market attempts to rally (lackluster) N - Volume swells and progress to the downside shortens. Eiger

Bar D is a bit early in the process. This is just one bar that closed on it's lows. As they say, one swan does not a Capistrano make. In other words, there is not enough evidence that weakness has come into the market at D. E shows a lack of professional interest, but not a great bar to short. Again, it's early. We need to let the market unfold a bit to be as clear as we can be that weakness has come in. Also, E dips below D and closed just off its highs. Lower prices were rejected here, and thus, this bar's action is saying that the odds for at least a little more rally are high. It is only after F that we are pretty certain that weakness is now dominating. G & H give the confirmation. F is an aggressive entry, G & H are solid entries. Keep in mind that you really want to protect capital first and foremost. You absolutely cannot take every signal that comes up in VSA. If you do, you will be hurt. There is a definate art or craft to this business. The art is to see the bars unfold against a background condition that gives substantial weight to a change in trend. Only then do we take a trade. Pay attention to the background first and foremost. Let the bars unfold. Watch the volume as the key indicator. It must start out with a spike or a swelling in volume. When several price bars and their associated volumes add up to a change in trend, then look for a trigger, not before. Hope this is helpful, Eiger

Hi Sanook, I posted an answer to your questions on the Pure VSA thread, as your questions pertianed to the post and charts on that thread. Eiger

Question from Sanook that is best answered on this thread. Here is the questions: On your first 3-minute ES chart from the recent Pure VSA thread, you say, 'Good locations to initiate shorts were at F, G & H. Could you explain why C, the no demand bar, is also not a good location to short. If I could finally get my head around this problem of seeing no demand bars and instantly thinking short, I'll be making progress. With regards to F, would I be correct in thinking that you'd enter a tick below and place the stop a tick above. With regards to G and H, I'll assume again entry is a tick below, but is the stop placed above G and H, or is it left above F. I personally would leave it above F, but if that is seen as being unnecessary then I'll reconsider. Why is C not a good location to short ... there are several reasons: First, the background. The Supply Line, ZZ has not been touched yet by C. The Supply Line also represents the area that is Oversold. Taking a trade that is near, but not quite at O/S levels will likely get you stopped out as the market continues to move up into O/S territory, as it did here. Second, although C is indicating a withdrawal of demand by professional traders, it is still making a higher high and closing with a higher close. The market is still in an uptrend. It hasn't shown definate signs of weakness or distribution at this point (that does not come until F). An uptrend is higher lows, higher highs, and higher closes. We don't like to take shorts in an uptrend because of the high risk. Third, the spread is still average. We want to see a narrowing of spread. The narrow spread indicates a lack of activity. Activity on this bar was no different than the previous two bars, even though the volume was less. When activity remains high, the odds for continuation of the present move remain high, as was the case here. Compare G and the two bars preceeding L with C. The best No Demands on this chart were the two bars before L. These up bars had narrow spreads, low, low volume, and closed in the middle or off the high. Also note the context at C. It was still in an uptrend and no real sign of weakness had yet shown itself. Look to the background first for the context to make a trade. At C, the context was still up. By G, we had run into higher time frame supply (referr to the 15-min chart), the Supply Line, ZZ, had been hit, indicating O/S, and the volume and bar characteristics at D and F indicated weakness. You had none of this at C. Entry At F: You can enter a tick below F and place a stop above its high. That works well. You can also sell on the close of F with a stop above the high. Entries at G & H: You can enter on a tick below or on the close - either is fine. I would personally place a stop above F on these entries and would look to move to break even as soon as the support line (along the lows of E & G) was broken. Great questions! Hope this is helpful Eiger

You are right - those should both be No Supply bars. D is also a Test. Thanks for catching that Eiger

There have been numerous live trades, options, and considerations shown on the main VSA thread here: http://www.traderslaboratory.com/forums/f151/vsa-volume-spread-analysis-part-ii-3428.html. Yesterday, I detailed both considerations and entry options here: http://www.traderslaboratory.com/forums/f151/pure-vsa-5357.html. Why not take the bold step and post a chart or two where you were confused in pulling the trigger. People here will be glad to help you. But, without the context, it's hard to respond in a way that will be helpful for you. Eiger

Now to the upside -- same day ... A - Very heavy volume comes in on a down bar. Note what happens on this volume. The spread narrows and the close is off the lows. Buying came in. B - The market tried to rally, but the rally is lackluster. ----- Background Check Note that this market is coming back down to the 814 AM support area. We would expect the market to at least pause here, and possibly turn and rally. ----- C - A break below the low of the high volume bar at A and well into the 814 support area, only to close back above A's low. Volume is still high, but not nearly as high as as the volume seen on A. D - A No Demand bar indicating supply may be drying up. We can tentitively say that buying is overcoming supply. E - This bar dips below C but closes in the middle of the spread - buying. Note that the volume is slightly less than at C. Next bar is up -- all bullish behavior. F - This is an interesting and telling bar. It drives down and is wider spread, but is unable to sustain a low close and more importantly, it is unable to draw out supply. Next bar dips lowrer (to the low of E) and closes on its highs - bullish. G - No Demand again. Volume has dried up to the downside. This bar closes in the same area as C & E. Compare the volume between G and C & E. This is why we can say volume to the downside has dried up. H - After dipping back to the lows of E & F, H takes off and pushes up through the congestion on a healthy increase in volume. Enough cause had been built from A through H to rally back to the noon-hour high. Please note the process: Background is always looked at first. Volume plays the key role in identifying weakness or strength and in analyzing the buying and selling as the market unfolds. Price bars tell us what happened on the volume. This is the method of VSA. Hope this is helpful Eiger

This is a thread just for pure VSA. To start: Today's 3-minute ES: Background - Price rallied after the open, then spent an hour reacting in a slow drift down. Volume was less on the reaction than the volume on the rally off the AM lows. Spreads were also generally narrower on the reaction, and as the reaction progressed, volume receded. A Higher Low (HL) was put in. After an earlier, failed attempt to break above resistance at 1, price held its gains at 2 on light volume (no supply) and also held the Demand Line YY of an uptrend channel. All of this is bullish. Note the emphasis placed on the background. We always start with the background. ----- A - Price pushes through the resistance area (red line) on high volume. B - Next bar has sustained volume, but the spread is narrowed and the close is in the middle. C - This bar is up, but the volume has dropped off precipitiously. This tells us in advance that the Supply Line, ZZ, is unlikely to be broken. D - Supply enters where expected. D is a down bar, closing on its lows on heavy volume. E - An up bar, closing on its highs after dipping below D indicates another rally will be attempted. However, the narrow spread and low volume indicate that professional money has withdrawn, so the rally is unlikely to go very far. F - Volume increases and the spread widens a bit (increased activity), but the result is a close on the lows. This Hidden UpThrust indicates supply. ----- More Background - Support and resistance are important to VSA. Look at the current chart in relation to the 15-minute chart (attached). We are currently just above yesterday's close and, more importantly, in the 825 area which offered support yesterday moring and early afternoon, but which is now likely to offer resistance. Thus, the background conditions from yesterday are joining with the immediate supply conditions seen on the 3-minute chart for a nice short set-up. ----- G - the market reacts to the previous low at E and rallies, but does so on a narrow spread and low volume - No Demand. H - A Hidden UpThrust that closes below the close of G on an increase in volume. The market now starts to fall. Good locations to initate shorts were at F, G & H I - As the market falls, volume increases. This bar was a down bar on average spread closing on the lows. The increas in volume and poor close tells in advance that the support levels from the trend line at YY and the horizontal support line (red line) are unlikely to hold. J - Tells basically the same story - supply is in control (down bar, increased volume, above average spread, and close on lows). K - The bar after J is narrow spread, close in the middle and high volume. Next bar is up. Some buying came in here, but K swamped whatever buying existed with a widerer spread down bar, close below the previous two lows on an increase in volume. L - The swelling volume that came in between J and K knocked the market sideways. Note the spreads and the volume. Spreads are narrow, volume is low and receding as the market attempts to rally. The two bars immediately before L are No Demand. L is a Hidden UpThrust on an increase in volume which caught stops and then closed on its lows. Another good location to initiate a short. The last bar on the chart is wide spread down bar with an increase in volume, closing on its lows. Supply is in full control. This is just pure VSA. Not too shabby is it? Always look first to the background, then follow the bars as they tell the story of the unfolding market. Trying to read the market by looking at a bar or two won't work. It will only hurt you. As you can see, adding other things extraneous to VSA is unnecessary and likely to be confusing. Hope this is helpful, Eiger

People tend to withdraw when the thread gets hijacked like this. The same thing has happened several times before.

Myth #2 VSA Is No Different Than Just Following Price Action Not really. Price is certainly an important component of VSA, but the real keys – as the name suggests – are volume and spread. In Tom Williams’s outstanding book, The Undeclared Secrets that Drive the Stock Market, he makes special note that volume is the key indicator of the professional traders. It is how we, as VSA traders, can track the activity of those market participants who matter most, the professional money. Volume is crucial because it tells us the level of involvement of the professional trader. Only the professionals can generate the high volume seen at nearly every market turn. Their absence is also easily seen following certain background conditions when volume is significantly low. Volume is so important in VSA that Tom recommends that traders train themselves to look at the relative volume before looking at the price bar when analyzing a chart. Spread is also very important and is looked at next, after volume. Spread (the range of the price bar from high to low) represents trading activity – the wider the spread, the greater the activity. Combining the volume with the spread can reveal much about current market movement. Increasing volume on widening spread, for example, indicates continuation of the current movement. High volume and narrow spread, on the other hand, can indicate a stopping of movement. Spread also relates to professional activity – only professionals, for example, are able to cap a market (i.e., sell into active buying leaving the spread narrow on high volume). After volume and spread are assessed, we next look at the close and the relation of the close to the preceding close(s). Thus, although price is important, volume takes precedence, not price. Following price without volume is something different than VSA.

As a follow-up ... I was able to get and use a sim card in China (Dalien region), which worked without any problems and without any charges to my US account. It worked just fine.

Unfortunately, Monad, some have a history of consistently doing just the opposite of your sound recommendation.

There are many myths floating around about VSA. These can be quite confusing to traders interested in learning the technical craft of VSA. If adopted as truth, they can also be quite damaging to traders trading with VSA. Most of these myths center around arguements that, if we look a bit more carefully, are based either on misunderstandings of VSA or attempts to lead the unwary. You can be the judge of that Myth #1: VSA is Frought with Unnecessary Jargon I have to admit that I chuckle a bit at this one. VSA is based on the Wyckoff Method. The Wyckoff Method dates back into the early 1930s and is based on reading the market by its own actions. Wyckoff was a very early proponent of reading the charts and developed a set of definitional terms he used to describe what he saw in the charts. Here is a (partial) list of terms from Wyckoff's original manual (in no particular order): Absorption Distribution Secondary Distribution Accummulation Buying Climax Selling Climax Technical Rally Technical Rebound Secondary Reaction Secondary Test Critical Position Danger Zone & Danger Points Upthrust Hypodermics Shortening of the Thrust Corrective Reaction Apex Hinge Springboard Shake Out Termial Shake Out Quite a list. VSA, being based on Wyckoff, uses some (though not all) of these terms. Terms used in VSA that come from Wyckoff include Buying and Selling Climaxes, Upthrust, Accummulation, Distribution, Test, Shake Out, etc. VSA streamlines Wyckoff to a certain degree, and such does not use as many of the terms that Wyckoff used. For example, Hypodermics is not found in the Williams text, nor is Secondary Distribution or Shortening of the Thurst. VSA does add a few terms, however. No Demand is one new term. Stopping Volume is another. In truth, these are pretty straightforward terms when you think about it. No Demand simply means what is says - there is no buying or no demand. The same with Stopping Volume. It refers to volume that stops a trend. Not particularly arcane. All professions have a technical language. Law, medicine, psychology, finance, marketing, carpentry, sport -- all have their own set of terms unqiue and specific to the discipline. The profession of trading is no different. Although a technical language may seem exclusionary to an outsider, this is not the intention nor the objective of technical language. Technical language merely serves to facilitate communication between people within the profession. When one VSA trader says, "No Demand," for example, every VSA trader understands what is meant. Communication is made easier and so is learning. I have seen many traders attempt to skirt the technical language only to 'see' and trade random patterns, thinking they were VSA. 'Seeing' selling come in, for example, because volume increases and a bar closes in the middle, they then take a short only to see the market turn on them and continue to advance. Loose descriptions of buying and selling/demand and supply seem on the surface to be more practical than the technical language. But, as every profession knows, loose terminology is neither useful nor practical. Traders avoiding the effort to learn the technical terms and their associated chart patterns quickly become frustrated and abandon VSA, many with a sour taste in their mouth. Does VSA have a technical language? You bet, just like every other profession on this planet. And, as in every other profession, the VSA technical language facilitates both communication and learning. Don't get swayed by the myth that VSA is all jargon. It is not jargon. There is a purpose for the terms used. That purpose is to help you properly learn VSA and talk clearly about it. Hope this is helpful. Eiger

I found this post on "Re: Thoughts from a Professional Trader" interesting and have nominated it accordingly for "Topic Of The Month January, 2009"

It can be trickier, but it doesn't have to be. Here is another idea that might help in this: Focus first on the volume rather than the price bars. VSA is areally more about volume than price. VSA sees volume as the key indicator for professional activity. It's only the pros that have enough 'power' to turn the trend. So, when looking at a chart, always look for the swelling of volume or volume spikes. These are big clues that important activity is taking place. Then look at the price bars on that volume. Did they close in the middle or on the exteme (e.g. closing on the highs at the end of a down trend). This would tell us that pros are stepping in and attempting to change the trend. We then, of course, look for a low volume test or no demand for confirmation. Once we see the the high volume, we know the background is potenially changing. The character of the subsequent volume and bars--especailly the low volume test or no demand--gives confirmation. If that is our background, and we've now gone from a downtrend to strength in the background, then any No Demand that shows up is out of place and can be ignored. A single bar will not alter all the heavy effort that was demonstrated in the background (i.e., all the high volume effort changing the trend). Wyckoff talked about this as well. He understood that volume is one of the keys to detecting shifts in trend. He talked about the swelling of volume that nearly always occurs as the trend shifts from up to down or down to up. His little book, Studies in Tape Reading is a great read regarding this kind of stuff. It helps to know your market, as well. How much volume is typically required to change a trend on a light volume day? What about a normal day? And, a trend day? Knowing these will help keep you from seeing stopping volume and climactic action at every minor turn. It is always better odds when you see volume come in and there is nearby support or resistance. One other thing to say is that the shift in trend from down to up seems more difficult to discern than the shift from up to down. I don't know exactly why this is so. I guess it takes a little more time for accumulation or maybe fear takes a little longer to recede in minds of traders. I'm not sure. But typically, the 'accumulation' phase takes a little longer than the 'distrubution' phase. So, you might see more polar bears (or palm trees, whichever is the right association) as the market is trying to change from down to up. It's just something to keep in the back of your mind. Try to remember that background is the crucial thing to watch for. The easy 'tell' is swelling of volume. After it has been confirmed, single bars (that are definate keys in the context of other backgrounds) can safely be ignored. Hope this helps Eiger

I think you might have made a small mistake in calling it no buying pressure. We are seeing no selling pressure in this example because all the selling was taken out of the market and has dried up. I do things like this all the time - example: calling no demand a test, or selling climaxes buying climaxes. No big deal. You understand that when there is no one left to sell, price will be bid up. Thats all that really matters.

Spot on analysis. The bar before A (wide spread down with high volume) showed buying, but because of the volume, also some supply. We normally expect a Test of this high volume shortly afterwards. Price moved up and tested at a higher low (slightly unusual, but all the principles were there). As CW said, the bar after E was a lovely Test and entry. The up bars on low volume after the SOS (bars A-C) does seem confusing because of low volume. Why is the market rising on low volume? Is it No Demand? Good question. The basic explanation is that all of the supply has been taken out of the market. In stocks, it's called the floating supply. When suppy has been stripped out of the market at that price level, there is no one selling and thus price moves up easily on light volume. It is an indication of strength. One other clue to this was the sideways movement (bars C-E). After drifting up a bit, price just held its gains (no selling). The down bars in that little range all were narrow spread (little activity) and low volume (No Supply & Testing). A good chart because of the somewhat unusual testing. One to keep in the chart file for future reference. Hope this helps, Eiger