Volume: ARCHIVE

[matinthehat 10]

Here's my attempt:

 

8. Buyers have come back in and price and volume increases. To form a lower peak below the previous top. Price falls and volume is lighter. Buying pressure is being withdrawn.

 

9. Price rises and volume increases. Buyers have the upper hand but sellers are showing resistance. The volume peaks with prices indicating that the buyers are trying to reach upwards and since the price peak is below the previous (swing high?) top, sellers are displaying their limits.

 

10. Price declines on light volume. Buyers have withdrawn (possibly given up and could join in on the selling later).

 

11. The sellers have reached their previous low on light volume. The sellers did not have to try very hard.

 

12. Price rises on light volume and volume peaks at the top. The buyers tried, but the sellers showed their resistance.

 

13. Price declines on rising volume. Buyers are showing some support, but there is selling momentum and the sellers have the upper hand. There is a new low formed and it is met with a slight rise in price accompanied with declining/light volume. Selling pressure has slackened, but there is also a lack of buying pressure. Once the buyers have run their course price declines and volume rises to from another new low. There was selling momentum on this move.

[DbPhoenix 42]

Not as difficult as you thought, was it? But don't set aside your S/R lines. S/R are created by where buyers buy and sellers sell, and keeping track of that and how traders behave when those levels are tested will tell you more than any particular point or bar.

 

 

Assuming that the world began prior to the left edge and you have no context, the first swing point provides potential R. The next provides potential S. The next fails to reach the lsh (last swing high), signalling a potential trend. The next makes a lower low, and you've got your trend.

 

Price, however, quickly returns to the range established by prior activity, and you don't know if you've got a reversal, an eventual continuation, or go-nowhere congestion/trading range, which is where being able to read the motives and relative strength of buyers and sellers through price movement and volume levels can come in handy, particularly when you're trading real time (which is, after all, the point of all this).

 

So we test the lsh and are turned back. But then we immediately test it again. We peek above that lsh, but we quickly fail to hold there. We then make a series of lower lows until we finally test the lsl. We get a bounce, get nowhere near a test of the supply line, and drop back to the demand line, breaking thru and plummeting until lunchtime.

 

All of which brings us back to my 3x5 card: it's all about the behavior of buyers and sellers against support and resistance.

 

If this is beginning to gel, consider going back to your original chart and replacing the candles with plain ol' black HLC bars. Then look at the work you've done, and look at your plain black HLC bar chart. Then back again. When you get tired of doing this, move on to a new chart.

[atto 20]

Excellent thread. mat and Db have done a very good job at annotating the chart, so I don't think I can add much there.

 

Think of price as a flowing river. Bars simple summarize what the river did during a time interval (or tick/volume/range/etc), so don't try to give further significance to them than that. The only bar who's open and close may matter are daily charts, because there is an actual open/close of trading. Db's suggestion of a line chart helps to minimize focus of "bars", and focus on how price moves (and how it responds to different volume).

[DbPhoenix 42]

Even though I don't follow YM, I was curious about what happened pre-market. One often finds trading ranges being developed prior to the open that can be used as guides to trading after the opening bell. That was the case here.

 

 

 

Notice that price first works its way toward 8290 and falls back. You don't know why. You don't care. But this gives you a potential level of R. Price then makes another attempt, but can only get to 8280. This suggests weakness and gives you another potential level of R.

 

Then price gives it up and drops to 8245, making a lower low, also suggesting weakness. It spends some time down there and gives you a potential level of S. It then works its way back to 8290, but finds R and can't make a new high. Suggests weakness.

 

It then makes a higher low, which may suggest strength, but is stopped at 8280, weakness again.

 

It then makes a double bottom at 8265, possible strength, and works its way back to 8290, where it meets R yet again and fails rapidly at its attempt at a higher high. Weakness again.

 

It then drops to 8245 to make a double bottom, and you now have a trading range to work with. It then makes a lower high at 8280, again suggesting weakness.

 

From then on, until the attempt to make a higher high at 1035, it's continued weakness, the trading range dropping down a level to 8210 to 8270. Based on what you see, the pre-lunch drop should not come as a great surprise.

[matinthehat 10]

Here is another attempt:

 

I have tried to incorporate S/R lines into my analysis this time. Please feel free to point out my misjudgments and what i have overlooked.

 

Thanks.

 

1. Price rises and volume decreases. The rise is due to a lack of selling pressure rather than enthusiastic buyers. The top is formed on light volume. This suggests a lack of demand.

 

2. Price then declines on rising volume. This suggests that there is selling interest.

 

3. On the way down buying support comes in around the previous swing low and drives price up. But there is a lack of demand and prices once again fall back.

 

4. Price declines and volume rises. This suggests that there is not strong selling pressure.

 

5. Price makes a new low on heavy volume. This area is tested by a second bar which has heavier volume. Price also closes near the highs. This suggest that support came in at the new low.

 

6. Prices then rise on declining volume. This suggests that the previous low was a exhaustion of selling.

 

7. Price makes a new high just below the previous swing high area on drastically low volume. This suggests that there is a lack of demand to drive prices up.

 

8. Price declines and stops just above a established level of support on mid-level volume. This suggests that there are buyers supporting the lower levels. Price also fails to reach its previous low, this suggests strength.

 

9. Price then rises on rising volume. This suggests heavier buying pressure than selling pressure. Price rises to a potential resistance line and finds resistance. This is suggested by the higher volume bar.

 

10. Price then declines on declining volume. This suggests a lack of buying pressure. It forms a new higher low, and this suggest strength.

 

11. Price again rises to a established line of resistance on higher volume and then stays there for two more bars on light volume.

 

12. Volume spikes and price declines. This suggest that price met resistance and selling pressure became stronger than buying pressure. Price then declines on decreasing volume. This suggests that there is a lack of buying pressure.

 

13. Price bottoms out on drastically light volume and fails to reach the previous swing low. This suggests a lack of supply and indicates strength.

 

14. Price then rises on increasing volume. This suggests that there is now buying interest and it is stronger than the selling pressure.

 

15. Price approaches its top on drastically light volume. This suggests a lack of buying interest. Price then approaches a previously formed resistance line and the buyers appear not to be able to break through the resistance that the sellers are establishing.

 

16. Price then declines on rising volume. This suggests that there is selling interest which is stronger than the buying pressure.

 

17. Price then is stuck around a previously formed line of support on high volume. This suggests that the buyers are supporting this line. Since it is stopped around this previously formed support line, it indicates that this support is strong and price will possibly head up (the path of least resistance).

Edited January 24, 2009 by DbPhoenix

[Head2k 10]

I am a beginner just like you, so please accept my humble attempt to help you. Perhaps somebody more experienced will correct me later. I will only quote the points that I disagree with or that I have something to add to.

2. Price then declines on rising volume. This suggests that there is selling interest.

There is selling interest indeed. But there is also increasing buying interest, otherwise volume wouldn't be increasing. What matters is that although lower prices attract buying, selling pressure is greater than buying pressure. Or in other words, selling interest is so strong that it can push price down even through increased demand at lower prices.

3. On the way down buying support comes in around the previous swing low and drives price up. But there is a lack of demand and prices once again fall back.

I don't see such a swing low. Or did you want to say that the support is found at the top of the 2-bar congestion which formed at the previous swing low?

Or maybe numbers 3 and 4 are missplaced on the chart? I suggest you to place numbers above or below the described bar, and if they describe a leg then mark the leg with { or something.

4. Price declines and volume rises. This suggests that there is not strong selling pressure.

There IS increasing selling pressure. See point 2.

5. Price makes a new low on heavy volume. This area is tested by a second bar which has heavier volume. Price also closes near the highs. This suggest that support came in at the new low.

It depends what one decides to call a test. I suggest that price should bounce meaningfully from the preliminary support before the test. So IMHO there was some form of test on a smaller scale (intraday), but on a daily chart I would view the two bars as one action (V bottom) forming preliminary support.

6. Prices then rise on declining volume. This suggests that the previous low was a exhaustion of selling.

Indeed it was exhaustion, but one has to remember that he doesn't know at that time whether the exhaustion is final or just temporary.

7. Price makes a new high just below the previous swing high area on drastically low volume. This suggests that there is a lack of demand to drive prices up.

Correct. So called Technical Rally. Now one can expect a test of the preliminary support.

9. Price then rises on rising volume. This suggests heavier buying pressure than selling pressure. Price rises to a potential resistance line and finds resistance. This is suggested by the higher volume bar.

If you look closely then volume is in fact slightly decreasing during the rally, and the day before the day with 9 above price turns down on insufficient demand. The next day it tests the last swing low (the green line again) and this is the day when demand comes in and drives price up.

11. Price again rises to a established line of resistance on higher volume and then stays there for two more bars on light volume.

Nice description of what is visible on the chart, but you should rather try to see and describe behavior instead of "price and volume". So buyers drove price up with some effort, but then they withdrew. But sellers weren't so confident to take over (much) either. So the next day was a moment of hesitation. Note the low volume, either side didn't have strong conviction.

12. Volume spikes and price declines. This suggest that price met resistance and selling pressure became stronger than buying pressure. Price then declines on decreasing volume. This suggests that there is a lack of buying pressure.

In fact price was declining prior to this volume spike and as volume came in price slowed the downward progress. To me it looks like that after that hesitation at the last swing high sellers gained confidence and started pushing. First slightly (the day before), now strongly. But they met demand and price got virtually nowhere on that volume spike day. The next day price indeed declines, but then easily gets up again. This look more like exhaustion of sellers, however it might be only temporary.

13. Price bottoms out on drastically light volume and fails to reach the previous swing low. This suggests a lack of supply and indicates strength.

But also note that price failed to bounce from that low meaningfully. This doesn't indicate strenght much IMHO, rather indecision. After such a wild struggle on the volume spike day, both sides are exhausted and since the result was virtually none, they are lost now, they don't know what to do. And after some time there is almost no more traders willing to trade at these prices, so something must probably happen to attract more activity. But what will happen that is highly uncertain at this point IMHO. The clue comes on the last day before the upside breakout from that little congestion at the low. On that day price reaches lower to test for supply and finds none, as you noticed.

15. Price approaches its top on drastically light volume. This suggests a lack of buying interest. Price then approaches a previously formed resistance line and the buyers appear not to be able to break through the resistance that the sellers are establishing.

The volume looks so drastically light that it looks like holidays. Note the period when all this stuff is happening. The extremely low volume is caused more by Christmas and the New Year than by anything else.

17. Price then is stuck around a previously formed line of support on high volume. This suggests that the buyers are supporting this line. Since it is stopped around this previously formed support line, it indicates that this support is strong and price will possibly head up (the path of least resistance).

The direction from here is not that sure. Note that price is not falling, but it is not rising either. So there is not only support against decline here, but also ressistance preventing a rally. The forces are even, though both quite strong.

[matinthehat 10]

Here is another annotated chart of the pre-market YM from about 7:00a.m. to 9:30a.m.

 

 

1. Price makes a higher low right after a higher high. This suggests strength and the trend is upwards.

2. Price stops around the previous swing high and then pulls back. It then approaches the swing high again and stays there for two bars. This suggests that there is not enough demand to push price above this level. This is an indication of weakness.

3. Price then falls and finds support at a previous level of support. It stays at this level for a while making little headway. This suggests weakness for the upside.

4. Price then breaks below support and makes a new low. It then rises upwards without enough demand to reach the previous swing high. This suggests weakness.

5. Price then falls and finds support at the most recent swing low. It stays around here for some time (confirming its importance) and then rises up. It rises up to the most recent swing high and finds resistance and is unable to break above this level. Price then plummets to form new lows.

6. Price forms a new low and stays around this level for some time. It then goes upwards and lacks enough demand to reach the previous swing high. This suggests weakness. Price then falls back down to the previous support line made by the new lows and stays here for some time. It then plummets below support.

7. Price then reaches new lows and finds support here. It stays here a while making almost no headway (unlike the previous resting spots) and then plummets below support.

8. Price makes new lows and then goes slightly upwards. It stays in this area making a very slow advance and then halts nowhere near the previous support. This suggests that there was a lack of demand indicating weakness.

 

Price then declines and forms new lows.

[matinthehat 10]

Am i supposed to be looking from bar to bar or something? Seriously, i get contradiction after contradiction after contradiction.

[Head2k 10]

Am i supposed to be looking from bar to bar or something? Seriously, i get contradiction after contradiction after contradiction.

I only said that it wasn't clear to me to which action numbers 3 and 4 are related. And why I was sometimes reading bar by bar in my comments? Because if you make annotations every third bar then the shifts in behavior that you are looking for occur often within one or two bars. Simply density of your annotations and chosen data sampling requires to go almost bar by bar in this case.

 

What is important is to observe behavior, confidence and intents of bears and bulls. And changes of them. So even if you need to go bar by bar in some cases, you must never consider the action represented by any particular bar in isolation, but you must judge what it means in context of what happened before. So in fact you are not focused on single bars, but still on the flow. The bars are the smalles pieces of information you have, so if the data sampling is not detailed enough and changes are quick, then what else you can do?

 

But as I said, I am a beginner and this is only my opinion.

[DbPhoenix 42]

Am i supposed to be looking from bar to bar or something? Seriously, i get contradiction after contradiction after contradiction.

 

There's no contradiction, mat. But I quickly got lost. Your numbering method did not make it clear whether you were talking about a bar, a group of bars, an entire up/down or down/up arc, and so on. Head's just trying to help you, as might others. But it's up to you to make clear just what it is that you're referring to.

 

One option is to split your chart into vertical sections and assign a number to each section. Another is to circle whatever it is you're referring to and assign a number to each circle.

Edited January 31, 2009 by DbPhoenix

[matinthehat 10]

Hi, here is another attempt at "all of this." please correct me and give me your opinions on what i am doing wrong. (if i have missed labeling something then please tell me). Thanks.

 

 

1. Price makes little upward progress on higher volume (This is the top of the previous move). Demand and supply are about equal but demand is a little greater than supply. This suggests a halt and I think one would need to wait until something happened before they could make a call as to what direction price is likely to go in.

 

2.At first price declines on rising volume. This suggests that price is running into support, but supply is still greater than demand. Price then forms a small bodied bar (“A”) on lower volume. This suggests that at this price demand and supply are about the same. Price then forms a downward bar that pulls back a little after reaching the low of the bar two bars before it. This is suggests that support came in at this area. Price then continues in the downward direction on rising volume until again it forms a small bodied bar (“B“). These coupled with the higher volume decline suggest that there is still a substantial amount of demand in the market. It then resumes in the downward direction on higher volume.

 

3. A big bodied price bar (“C”) is formed on really heavy volume. Price went to lower prices and apparently found support and demand drove price upwards with some effort to close at the high. It also closed at a established line of support. I wouldn’t call this any type of exhaustion as the majority of the volume could have come from the support absorbing all the supply before more the price started to rise or at the old support line (now a potential resistance line) where resistance possible was offered. Price then falls on declining volume indicating that the previous bar was most likely(?) temporary exhaustion of buying pressure. This is so because now the price is declining because of a lack of demand and not because of enthusiastic sellers as the volume is not very heavy.

 

4. Price then forms a “T” bar (“D”) on high volume. This bar closed at its high a tiny bit below the open. This suggests that support came in (at the low of the previous big bar) and a excess of demand drove the price up. It is not on extremely heavy volume and price still closes a bit below the open, so I wouldn’t have called this the bottom yet. Price then declines on about the same amount of volume as the previous bar, suggesting a smaller amount of demand or a greater amount of supply than previously.

 

5. Price then declines on pretty heavy volume. This suggests prices declined with quite a lot of effort, but supply was greater than the demand. The next bar is also on pretty heavy volume. It goes to lower prices and runs into a lot of support which absorbs the majority of the supply allowing demand to raise price to close at the high. I would say that this suggests a temporary exhaustion of selling pressure.

 

6. Price then rises on lighter volume, suggesting that prices are rising due to a lack of selling pressure than a surge of enthusiastic buyers, but the buyers are still having to put some effort into the rise. This could reinforce the statement that a temporary selling exhaustion just took place.

Edited January 24, 2009 by matinthehat

[jcavalieri 10]

i have done a volume observation but i have no idea how to post my chart because it said the file was too large from my paint program

[Head2k 10]

i have done a volume observation but i have no idea how to post my chart because it said the file was too large from my paint program

Convert it to compressed format, such as jpg or png. If you paint program can't do it, download some freeware which can.

[jcavalieri 10]

this is a chart of the Q's from friday 1/30. i just want to see if my thinking is correct. my analysis covers from the open at 9:30 to 11:00 then 11:00 to 12:00. these time ranges are separated on the chart with vertical lines. also i have marked 8 vertical lines above areas of price/volume flow which correspond to my analysis. the line above the open corresponds to number 1 and the last corresponds to 10.

 

price/volume observation:

 

1. price opens on top of a price range from EOD 1.29. Price rallied slightly with strong effort/high activity, but the rise in price was not in proportion to the substantial rise in activity indicating the presence of supply. This proves to be the case as the rally is halted and reversed just below the mid point of another range from 1.29 suggesting weakness.

 

2. Recognizing price is at resistance and further buying is likely to be unprofitable, experienced bulls withdraw opposition and price declines with minimal effort.

 

3. As price travels through the mid point + bottom of the range price sat atop at the opening, activity begins to expand with proportional result in price. this expansion in activity is different from the type that typically culminates the current price move in that the context and behavior of price/vol. suggest that supply is eating through demand present at potential support levels at mid pt. + bottom of range. this behavior gives us early warning the support zones will not hold up to this decline, most likely.

 

4. Following the break of demand line, price levels out and activity dries up. probable swing to equilibrium preceding continued weakness.

 

5. price then drops to a lower low with expanding activity although much less then the previous reaction. result in price appears to be proportional to activity. less effort + less result indicate a lessening in supply.

 

6. following the reduction in supply, demand rotates in and produces a minor rally with contracting activity. the rally is stopped + reversed at the mid pt of the prior reaction (tech weak). the contraction in activity as the rally unfolds and the weak result in price movement indicate bulls are not interested in transacting at higher prices and their disinterest causes a reduction in demand.

 

7. Following the tech. weak rally, bears recognize the bulls are weak and put pressure on price, causing a reaction. price moves to a lower low with expanding activity. although price is declining, the expanding activity shows both buyers and sellers are increasingly interested in this area and showing their support through their purchases and sales. also the extent of this reaction is less than the opening reaction despite similar activity levels. this suggests the presence of demand and possible minor selling climax.

 

8. following the potential minor selling climax, demand rotates in causing a rally, but with similarly weak effort as previous rallies also exhibited. the rally reaches the mid pt of previous reaction - reverses to test the lows and does so successfully with light activity indicating bears are done for the time being and at a higher low. price breaks the hi of automatic rally following successful test for supply at lows, but an influx of supply at a lower hi as price approaches a potential resistance level from the left stops and reverses price.

 

9. The fact that price reversed at a lower high suggests downtrend may continue - and does so as price breaks to a lower low. activity increases as price pushes through potential support from climax lows, which is to be expected as effort is required to break through important zones, but downward movement starts to round off despite activity remaining high suggesting demand has filled all the supply at current levels and is starting to over power supply.

 

10. Following the application of breaking power by the bulls to retard the downward movement, price rallies with much less activity than previous decline and reverses at the mid pt of that decline to test the lows. test takes place on very light + contracting activity indicating bears are done for the time being.

[jcavalieri 10]

the tenth vertical line should be over 12:00 am slightly to the right of where it actually is marked on the chart, i just realized.

[BrunoHammerstorm 10]

this is a chart of the Q's from friday 1/30. i just want to see if my thinking is correct. my analysis covers from the open at 9:30 to 11:00 then 11:00 to 12:00. these time ranges are separated on the chart with vertical lines. also i have marked 8 vertical lines above areas of price/volume flow which correspond to my analysis. the line above the open corresponds to number 1 and the last corresponds to 10.

 

price/volume observation:

 

1. price opens on top of a price range from EOD 1.29. Price rallied slightly with strong effort/high activity, but the rise in price was not in proportion to the substantial rise in activity indicating the presence of supply. This proves to be the case as the rally is halted and reversed just below the mid point of another range from 1.29 suggesting weakness.

 

2. Recognizing price is at resistance and further buying is likely to be unprofitable, experienced bulls withdraw opposition and price declines with minimal effort.

 

3. As price travels through the mid point + bottom of the range price sat atop at the opening, activity begins to expand with proportional result in price. this expansion in activity is different from the type that typically culminates the current price move in that the context and behavior of price/vol. suggest that supply is eating through demand present at potential support levels at mid pt. + bottom of range. this behavior gives us early warning the support zones will not hold up to this decline, most likely.

 

4. Following the break of demand line, price levels out and activity dries up. probable swing to equilibrium preceding continued weakness.

 

5. price then drops to a lower low with expanding activity although much less then the previous reaction. result in price appears to be proportional to activity. less effort + less result indicate a lessening in supply.

 

6. following the reduction in supply, demand rotates in and produces a minor rally with contracting activity. the rally is stopped + reversed at the mid pt of the prior reaction (tech weak). the contraction in activity as the rally unfolds and the weak result in price movement indicate bulls are not interested in transacting at higher prices and their disinterest causes a reduction in demand.

 

7. Following the tech. weak rally, bears recognize the bulls are weak and put pressure on price, causing a reaction. price moves to a lower low with expanding activity. although price is declining, the expanding activity shows both buyers and sellers are increasingly interested in this area and showing their support through their purchases and sales. also the extent of this reaction is less than the opening reaction despite similar activity levels. this suggests the presence of demand and possible minor selling climax.

 

8. following the potential minor selling climax, demand rotates in causing a rally, but with similarly weak effort as previous rallies also exhibited. the rally reaches the mid pt of previous reaction - reverses to test the lows and does so successfully with light activity indicating bears are done for the time being and at a higher low. price breaks the hi of automatic rally following successful test for supply at lows, but an influx of supply at a lower hi as price approaches a potential resistance level from the left stops and reverses price.

 

9. The fact that price reversed at a lower high suggests downtrend may continue - and does so as price breaks to a lower low. activity increases as price pushes through potential support from climax lows, which is to be expected as effort is required to break through important zones, but downward movement starts to round off despite activity remaining high suggesting demand has filled all the supply at current levels and is starting to over power supply.

 

10. Following the application of breaking power by the bulls to retard the downward movement, price rallies with much less activity than previous decline and reverses at the mid pt of that decline to test the lows. test takes place on very light + contracting activity indicating bears are done for the time being.

 

 

OMG thank you.... i've learned more from your post than an entire VSA thread run by Tradeguider sales reps.

[BrunoHammerstorm 10]

Here is another attempt:

 

I have tried to incorporate S/R lines into my analysis this time. Please feel free to point out my misjudgments and what i have overlooked.

 

Thanks.

 

1. Price rises and volume decreases. The rise is due to a lack of selling pressure rather than enthusiastic buyers. The top is formed on light volume. This suggests a lack of demand.

 

2. Price then declines on rising volume. This suggests that there is selling interest.

 

3. On the way down buying support comes in around the previous swing low and drives price up. But there is a lack of demand and prices once again fall back.

 

4. Price declines and volume rises. This suggests that there is not strong selling pressure.

 

5. Price makes a new low on heavy volume. This area is tested by a second bar which has heavier volume. Price also closes near the highs. This suggest that support came in at the new low.

 

6. Prices then rise on declining volume. This suggests that the previous low was a exhaustion of selling.

 

7. Price makes a new high just below the previous swing high area on drastically low volume. This suggests that there is a lack of demand to drive prices up.

 

8. Price declines and stops just above a established level of support on mid-level volume. This suggests that there are buyers supporting the lower levels. Price also fails to reach its previous low, this suggests strength.

 

9. Price then rises on rising volume. This suggests heavier buying pressure than selling pressure. Price rises to a potential resistance line and finds resistance. This is suggested by the higher volume bar.

 

10. Price then declines on declining volume. This suggests a lack of buying pressure. It forms a new higher low, and this suggest strength.

 

11. Price again rises to a established line of resistance on higher volume and then stays there for two more bars on light volume.

 

12. Volume spikes and price declines. This suggest that price met resistance and selling pressure became stronger than buying pressure. Price then declines on decreasing volume. This suggests that there is a lack of buying pressure.

 

13. Price bottoms out on drastically light volume and fails to reach the previous swing low. This suggests a lack of supply and indicates strength.

 

14. Price then rises on increasing volume. This suggests that there is now buying interest and it is stronger than the selling pressure.

 

15. Price approaches its top on drastically light volume. This suggests a lack of buying interest. Price then approaches a previously formed resistance line and the buyers appear not to be able to break through the resistance that the sellers are establishing.

 

16. Price then declines on rising volume. This suggests that there is selling interest which is stronger than the buying pressure.

 

17. Price then is stuck around a previously formed line of support on high volume. This suggests that the buyers are supporting this line. Since it is stopped around this previously formed support line, it indicates that this support is strong and price will possibly head up (the path of least resistance).

 

I'm so impressed how well thought out and improved your analysis are. I learn something new every time I read them. This is fantastic....

 

I'm so glad traders are learning to analyze the market... rather than training themselves to perform two bar pattern recognition... lol

Edited February 2, 2009 by BrunoHammerstorm

[jcavalieri 10]

definitely read section 7m on the stickies section at the top of the forum bruno

[BrunoHammerstorm 10]

definitely read section 7m on the stickies section at the top of the forum bruno

 

is this what you are talking about??

DETERMINING THE TREND OF THE MARKET -- COMPOSITE AVERAGES (Sect. 7M)

[jcavalieri 10]

yes there is a chart at the bottom to follow on

[BrunoHammerstorm 10]

yes there is a chart at the bottom to follow on

 

Thank you, but I guess I'm not understanding what you are saying since it is fragmented.

 

You suggested I read a portion of the Wyckoff material after I commented on your analysis. Are you trying to tell me that this is the material you used to perform your analysis?

 

thanks.

[jcavalieri 10]

yes read all section 7m and all the other stickies as well. starting from the beginning would probably help.

[jcavalieri 10]

db or head, i was wondering if you could go over my analysis and tell me what you think. i am interested in your opinion.

[DbPhoenix 42]

db or head, i was wondering if you could go over my analysis and tell me what you think. i am interested in your opinion.

 

I'm pressed for time. I'm hoping that FW or Head or one of the others who's been working on this so vigorously will give it a shot. If not, I'll get to it when I can.

 

Sorry.

 

Actually, anybody who's still in the shallow end is welcome to give it a shot as well. It's not like there's only one answer.

[Head2k 10]

db or head, i was wondering if you could go over my analysis and tell me what you think. i am interested in your opinion.

Sorry jcavalieri, I've got recently a lot of my own trading stuff that I want to sort out. Anyway, I think your analysis is basically correct.

Price opens (or breaks through?) above recent range, but it is hit with supply and then it is unable to hold. It falls through the last range like a knife and breaks through its bottom. The first pause comes below support. Sellers take a break, but buyers aren't able to produce any bounce. Suggests severe weakness. Notice that volume remains quite low, so the pause wasn't a result of some major demand.

Price then continues down, makes another tiny swing and plumets again. Supply line is broken between points 7 and 8 by the technical rally, but then the test of preliminary support fails.

Just one remark to points 9 and 10. It is indeed a potential climax and test, but there is no technical rally in between. That means that buyers didn't show any interest appart of stopping the decline. For making a trading decision it is probably better to wait for more buying interest to show up. That would mean buying the test around noon (if buying at all).

But I am not the expert here