36 replies to this topic

[SemiBizz]

Yep, 113 - 115 XAU is a place I have been... been there and done that over and over. Funny how when you trade awhile, you see that trading ranges take on behavioral characteristics... This is a tough nut to crack, and it might not be over yet. if XAU 96 breaks, then it's probably over.

[risk_management]

...especially if you create a MCO and MCSUM to go along with it.

Fib

Was meaning to do it for a long time. Will put some effort over the labor day weekend and share it here if I succeed.

[fib_1618]

Funny how when you trade awhile, you see that trading ranges take on behavioral characteristics...

A very important comment that should not be overlooked by the reader...acknowledgement comes with experience.

I always look at the markets as a living, breathing entity...it has breath (breadth), heart (volume) and emotion (sentiment).

One's understanding on how your patient is feeling each day is half the battle in the creation of wealth....the other half is discipline.

Fib

[ogm]

August US Equity Trading Volume Plunges To Lowest In 16 Years

http://www.zerohedge...lowest-16-years

[fib_1618]

August US Equity Trading Volume Plunges To Lowest In 16 Years

http://www.zerohedge...lowest-16-years

Not good news if you're a bear...thanks for the link.

Fib

[SemiBizz]

August US Equity Trading Volume Plunges To Lowest In 16 Years

http://www.zerohedge...lowest-16-years

Not good news if you're a bear...thanks for the link.

Fib

Depends on how you look at it, we expect tops and bottoms to come on light volume... and we have new highs in August...

[fib_1618]

August US Equity Trading Volume Plunges To Lowest In 16 Years

http://www.zerohedge...lowest-16-years

Not good news if you're a bear...thanks for the link.

Fib

Depends on how you look at it, we expect tops and bottoms to come on light volume... and we have new highs in August...

But as a chartist, we generally see higher than average volume with price tops, and then lower than average volume at true bear market bottoms (as opposed to correctional sequences that include high volume emotional spikes).

The point though of my comments are three fold (reference the SPX chart below):

First is that although daily volume on Tuesday was slightly above average, it did not surpass the original downside break of the 15th suggesting a lessening of selling pressure.

Second is that Tuesday's volume spike came in concert of breaking the rising bottoms line going back to November of last year, and as you very well know Tom, it's important that you have high volume (conviction) on trendline breaks like this or the price pattern will quickly attempt to retrace back above these same lines of support (or resistance)...very much like we did today (AKA a false break).

Third is that it's not the quantity of volume that counts...it's the quality. In this respect, although the sellers have had the upper hand in August on a plurality basis, it hasn't been really enough trend momentum created to change the prevailing trend in prices from up to down on an intermediate term basis. Given that the last week of August is one of the three slowest weeks of the year trading wise (the others being the week of Thanksgiving and in between Christmas and New Years), the odds that we're likely to tread water going into Thursday and Friday are very high (drums of war notwithstanding).

We'll see how it goes next week, but unless there is a good pickup of selling from these current levels in September, the bears are going to once again face quick exhaustion of their collective opinions very much like they have now over the last 2 years. From that point, another platform for the bulls will once again be in place to either run, pass or turn over possession.

Fib

https://stockcharts.com/c-sc/sc?s=$SPX&p=D&st=2012-04-02&en=(today)&i=p20426455200&a=314121447&r=1377730884915.png

[SemiBizz]

See, thing is, we don't use averages. Average Volume, Up Volume, Down Volume all useless in Wyckoff Methodology. We don't care about average, it's about specific volume at the swing points. Yes, we do need to see a pattern of stronger volume "off the top" to confirm that we have a tradeable high in place, and no we aren't seeing that here, nor do we expect to see that level of volume here in August, especially into a 3 day holiday weekend. Nevertheless, on a MONTHLY basis, we can have a top in here on lighter volume in August. The outlook for September is generally STRONGER VOLUME, so unless we see a new high in September, we have a setup for "Volume off the top". We'll see if that develops or not. There are always exceptions, for example the last "STRONGEST VOLUME" month for the Nasdaq and SPX came in AUGUST 2011. That's the thing about Volume, we never know what set of circumstances will result in a big volume spike. Generally speaking STRONG VOLUME is more BEARISH, for example if we look at the strongest months of Volume for Nasdaq - we have 8/2011 (US Downgrade), 5/2010 (Flash Crash), 10/2008 (Lehman Crash).

[fib_1618]

See, thing is, we don't use averages. Average Volume, Up Volume, Down Volume all useless in Wyckoff Methodology. We don't care about average, it's about specific volume at the swing points.

Yes, we do need to see a pattern of stronger volume "off the top" to confirm that we have a tradeable high in place, and no we aren't seeing that here, nor do we expect to see that level of volume here in August, especially into a 3 day holiday weekend.

Nevertheless, on a MONTHLY basis, we can have a top in here on lighter volume in August. The outlook for September is generally STRONGER VOLUME, so unless we see a new high in September, we have a setup for "Volume off the top". We'll see if that develops or not.

There are always exceptions, for example the last "STRONGEST VOLUME" month for the Nasdaq and SPX came in AUGUST 2011. That's the thing about Volume, we never know what set of circumstances will result in a big volume spike. Generally speaking STRONG VOLUME is more BEARISH, for example if we look at the strongest months of Volume for Nasdaq - we have 8/2011 (US Downgrade), 5/2010 (Flash Crash), 10/2008 (Lehman Crash).

Fully understood.

Thanks for taking the time in describing the differences between the two methodologies.

Fib

[SemiBizz]

as you very well know Tom, it's important that you have high volume (conviction) on trendline breaks

So we consider trendlines an averaging scheme. The problem with averaging schemes is the prices don't represent a buyer or a seller.

We're not interested in that, we're interested in the prices where issues are BOUGHT and SOLD, and the corresponding volume structures.

We have the local timeframe, we have Longer timeframes. If there is a history of trading on an issue and price and volume information, we can easily determine the support and resistance profile. We find that trend line, moving average, all those averaging schemes are less predictive than volume weighted support and resistance.

So where there is no price history, and issues drop under all time lows or break all time highs, we do use fibonaccis as a guide. Fibonaccis are also used to project targets where there is price history, and whenever we have "confluence" between a fibonacci target and a volume weighted target, a high percentage of those targets hit.