Volume Spike W/o Spread?

[ctvas 10]

This is pretty strange. I possibly will have to wait to see what this does, but in the meantime is this positive volume spike without a spread important? How can there be 300% (amking up a number) more buyers than the previous 3 bars combined, and the price does not change?

 

I know we shouldn't pay attention who is responsible, but if it was professional money, there would've been a price spread?

[2trade 10]

Hello I cant see what the ticker is on this but if its a stock it could be a block trade execution between 2 parties at an agreed price you would need to do a search for all transactions on the day and examine them.

 

thx 2trade

[speres 10]

  ctvas said:

This is pretty strange. I possibly will have to wait to see what this does, but in the meantime is this positive volume spike without a spread important? How can there be 300% (amking up a number) more buyers than the previous 3 bars combined, and the price does not change?

 

I know we shouldn't pay attention who is responsible, but if it was professional money, there would've been a price spread?

 

there doesnt have to be a big spread to mean professional moneys involved,

you can have plenty of weak buyers coming in trying to pick a bottom and the pro's will happily sell to them....

 

.think of an auction, if buyers come in and theres less sellers price increases, the spread just shows the balance of buyers and sellers,high vol, low vol doesnt matter

Edited November 21, 2009 by speres

[luker 10]

  speres said:

there doesnt have to be a big spread to mean professional moneys involved,

you can have plenty of weak buyers coming in trying to pick a bottom and the pro's will happily sell to them....

 

.think of an auction, if buyers come in and theres less sellers price increases, the spread just shows the balance of buyers and sellers,high vol, low vol doesnt matter

 

Sorry to revisit and old post, but i have a difference in opinion.

 

To my way of thinking using the principals of VSA, Smart money is not still in this position at these price levels, it would be accumulating not distributing. Unfortunetly this chart is a little unclear, and the next bar would be of great importance to see where the market was either marked up or down to test for strength or weakness.

 

If smart money was wanting to get out of this position, then they would mark it up, which would be followed by no demand, (no volume) and then high volume back down to remove themselves from the position. And this would only happen if they knew there was a lack of floating supply. They would not push that sort of volume through, shown on the chart, if they knew there was floating supply stoping there mark up. So, we must conclude that they are prepared to absorb the supply to push prices higher. The test may come in the next bar.

 

Thats my understanding anyway, please correct me if i am wrong

[2trade 10]

You need to look at the time and sales to make an educated guess if this is

and an option being exercised a block trade between 2 parties at an agreed price

or other scenarios of this ilk.

 

Hopr this helps.

[SRspider 10]

My view on this is like Lurker's in that i would see it as accumulation. With all that volume and no price movement it seems that the selling was absorbed. It would also depend on what level this was happening and what happens next as well. I wouldn't just jump in unless there is other evidence of strength.

[BlowFish 10]

If I was a betting man I would say a block trade negotiated before the open. Could be MoO orders but then you would expect some movement. Imvho trying to guess the participants and there motivations is just that ... a guess. What exchange was it on? It's a pretty thin instrument to determine anything much from volume. Most volume analysis works much better in liquid markets.