5 replies to this topic

[esther231]

Is this a bearish uptrust? Volume is lower than the gap day and we tested the top of the candle. Am I reading that right? Looking at NDX.

[SemiBizz]

Short answer is yes. But a bearish upthrust can extend... more importantly though look at the longer time frames on the monthly, we're going to break the volume apparently. And, if we get over the price there's your longer term sign of strength signal.... If you read my response to DenLeo yesterday I mentioned that the bar was pretty low for the market, just make a new high and poof... correction? What correction?

[paulstan]

Semi, with regards to your style of volume analysis wouldn't you say that the daily volume would be more important than monthly? I see what you say, but if the big volume has occured on down days, and we make a new marginal high on the monthly on low volume . . . I'd conclude that it's an upthrust that will likely fail (and would in fact be a high probability short).

[SemiBizz]

Semi, with regards to your style of volume analysis wouldn't you say that the daily volume would be more important than monthly? I see what you say, but if the big volume has occured on down days, and we make a new marginal high on the monthly on low volume . . . I'd conclude that it's an upthrust that will likely fail (and would in fact be a high probability short).

Well, no. I don't think it matters what your style of TA is. The greatest margin of error is in the shortest timeframes. And the longer the timeframe the more powerful the signal. So while on a daily basis, we might have a bearish upthrust we may have a bullish spring on the weekly, monthly, etc. A bearish upthrust on the daily may just be nothing more an indication of a fibonacci pullback, not a longer timeframe trend change. Now technically we're still in a bearish upthrust here on the monthly until that monthly high is broken, there is still a sign of weakness in place... namely break monthly swing low (from Feb 2007) on Volume. I'm giving you a heads up here however is that all the bulls need to do now is break the highs and that will be a full reversal on volume on the monthly...

Furthermore, I would think that if we do break this monthly high on volume, that the 2618 high from 1/3/01 daily will be tested and possibly the 1/2001 Monthly high of 2892 could also be tested. We'll make that call based on what kind of volume we have on breaking that huge daily volume high, should it happen...

One more thing to note.. 1/3/2001 is the day the Feds cut rates a whole point. I would not be surprised for us to break these highs on another rate cut. Eventually I believe the outcome will be the same as 2001. No matter what they SAY, you have to watch what they DO. And if the Fed does cut rates, while we may have another big price spike like 2001, the long term results will probably be the same.... I rather not front run that 500 point rally though

Edited by SemiBizz, 21 March 2007 - 04:53 PM.

[esther231]

Nor I. lol Thanks for the insight. Much appreciated.

[paulstan]

Thanks. I agree with your analysis . . . my bias is that I think it's unlikely we'll reach new highs. I think the gap on the ndx won't be closed, and that resistance here will turn the market back. We should see soon!