T2W Trading Community

Looking at the Numbers
Although the results may not apply to other trading instruments, in looking at 645 days for the QQQQ’s in which there was active trading volume we can make the following generalizations:

1. Without active trading volume it was difficult to break resistance (triple-top).
2. Without active trading volume it was difficult for the cues to sustain a $40 price.
3. The cues were incapable of sustaining high prices ($40) without active trading volume (> 150 million shares).
4. A strong loss with excessive volume was often the catalyst behind an impressive rally, but the impact was not always immediate.
5. The longer the span of days without active volume, the more likely that the price of the cues would sustain its current movement.
6. Consecutive trading days with excessive volume (swarms of vertical red lines) generally provide a forceful continuation of current pricing patterns.
7. Although it is not always immediate, a day with 150 million shares often influences direction.  It can either sustain current direction or, in some cases, be instrumental in reversing the direction of the cues.

Preliminary research on the cues does show some patterns of predictability, but more analysis is necessary before putting our cash to work. Nevertheless, when there are a slew of days with excessive volume – unless you are fairly certain of trading direction – you should stand clear, or take a smaller position in the market until a more definite pattern of success or failure emerges.