Price, (Volume), Support, Resistance, Demand, Supply . . .

[SOCRATES]

Ok no problem!

Ok, here we go...

There is absolutely no point in going round the houses dithering and circumventing a situation as presented.

What you have to do is to get to the root of the situation and to properly clock it in order to make a judgement call that is the correct one.

This for me takes seconds, but to type it out takes minutes.

In fact, the work of typing out the result of my observation involves lag, because all of this is thought out much faster than the rate at which it can be typed.

The first thing you have to do is to properly identify what the situation is, what it really means.

What is presented here is a CAMPAIGN.

This campaign is a very deliberate and fierce one.

It is mounted by individuals who really know what they are about, who can afford to lay the money on the line and to COMMIT , that is to commit meaningfully.

We know this because the volumes involved are not insignificant.

Therefore this campaign, is being mounted by individuals who understand how markets work, are properly funded, are able to commit and have mastered the art of timing.

It does not matter who these individuals might be, or what the insturment under scutiniy might be.

What is important is to be able to follow and read how the price and vclume action develops and the reasons why. That is what you want, isn't it ? Yes ? Ok then...we start...

First of all I am going to give you a general synopsis in this post.

Then I am going to give you a specific synopsis and a forecast in the post that follows, OK ?

General Synopsis:~

The campaign is to allow the price to fall and to mount a raid to accumulate.

But this campaign is being interffered with.

This causes the campaigners some nuisance, in the sense that they are not able to complete their plans immediately and cleanly.

A struggle ensues that is very messy but in the end they prevail.

 

[firewalker99]

Ok, here we go...
What is important is to be able to follow and read how the price and vclume action develops and the reasons why. That is what you want, isn't it ? Yes ? Ok then...we start...

Yes, mainly price and if volume is necessary or can support certain hypotheses than ok. But I've found it more than often to be confusing. Anyway I won't interfere and let you go on... so take your time and I'll comment on it afterwards. Thx in advance for taking the time.

 

[Grey1]

There has been 20 pages of info on Price /Volume

let me ask this question from the contributors

if you saw a 30 000 shares of AAPL went through T&S as buy @ say 6PM do you see this as a bullish signal ?


grey1

 

[SOCRATES]

Yes, mainly price and if volume is necessary or can support certain hypotheses than ok. But I've found it more than often to be confusing. Anyway I won't interfere and let you go on... so take your time and I'll comment on it afterwards. Thx in advance for taking the time.

OK, I understand your difficulties, just be patient and I will explain it to you. Back in half an bour, being called to lunch. I will continue in my next post. I started to type and accidentally wiped it so we have to start again...LOL

 

[SOCRATES]

Second Part:~

Put your attention on the right hand chart.

Follow the red resistance trendlinw you have drawn down to price of 5636. as it nears this price level, the campaign to accumulate begins, with the tenative expectation that the fall can be stopped and reversed at that level...but...and this; is very important...the price has been falling all morning....it has fallen just over 80 points...whch is a big fall...and nearly everyone has a bearish outlook by now.

The fact that it stops abruptly delivers an information shock to nearly everybody...you have to understand that the great majority would find it difficult to accept that such a radical reversal can take place so suddenly......or .....they may accept it but are still undecided as to whether it is going to last.

In the next bars that follow the price is lifted...but with difficulty on thin volume.

Whys is this ?

Is is because of stock shortage ?

No.

It is not that because the volume on the bottom was not sufficiently significant.....and sure enough...it is taken to 5670....and sort of held there indecisevely...and pushed up a little bit to touch 5674...but notice there is no committment in this rise from anyone...and so...at that price level...it cannot be sustained or taken any higher through lack of response and sold off....the big volume bar under this price bar shows this...

And now it is marked down sharoly to find another level that will hold, and that level is 5630 or thereabouts....but this level is not conclusive as the volume that underpins it is fractured.

The campaigners know this...but preliminarily try the bull side...as you can see with mixed results as they take the price up again to 5650 or thereabouts, just underpinning the previous low...and no higher. You can see how at this price level the volume is low whereas the previous up barfrom 30 to 50 has markedly heavier volume...why ? encouragement of premature longs..only to be taken out...in the next move...these are weak holders....we know this because of the volume in aggregate that is displayed in the subsequent fall that follows as a deeper incursion right down to 5611.

The aggregated volume shows this bottom to be really significant...now look how the price springs up sharply...cleanly back to touch 5634...there is a sudden change of mood here...are you able to detect it ?

What I am trying to do with you here is to try to talk about a cluster of things all at the same time..

You will see so far all the volume on tops is not so great..thoughout...why ?

It is because the response to higher prices is not adequate yet...and so the weak holders are racked up and down and the stops taken out...until the campaign to accumulate is complete.

We shall know when it is complete because the distribution of volume on tops and bottoms will normalise.

You can see that the volume in the price range 28 to 34 looks more healthy....the campaigners now feel more secure in the idea that previous bears are being converted gradually...but effectively ...to the bull side.

The price is now made to rise in hops. In each of these hops overall the volume begins to look less thin, less erratic...more healthy doesn't it ?

The bull phase is now under way.first to 40, then to 60 and then tenattively to 80......and then subsequently to even higher levels right up to the end of the day.

This is going to go even higher.

Before it does, a new campaign will be mounted to reaccumulate to further fuel the rise.

And that's it.

Q.E.D.

 

[rainman2]

Hi Socrates,

At the 2nd potential selling climax at 13:21 with the highest volume so far (around 5630), than a lower low at 13:33 with less volume (around 5620), isn't that an indication that the sellers are done? Wouldn't the wide range up bar at 13:48 on the highest volume yet confirm that demand had overtaken supply? But yet, a new low at 14:45 occurs before the REAL upmove happens. Can you give any clues, hints, advise on how to spot this so that I wouldn't enter to soon?

 

[dbphoenix]

Hello, although I appreciate the feedback and suggestion, I've been through that phase a while ago. Day after day I observed the charts in realtime, especially the opening and what happened next. Indeed, at some days I had a "feeling" if you want to call it that way that price was forming support (or resistance). Unfortunately each time I acted on those, price just turned away, dropped right through support or broke resistance and there I stood again. Frustrated, agitated, unable to comprehend why this happened or why I wasn't able to do anything about it, I banged my head against the wall for losing an increasingly amount of money.

So perhaps I'll never become one of those people who claim they have acquired an "intuitive" feeling for the market (if you happen to be one of those then hats off). Or perhaps all those people don't have an intuitive feeling but for them it feels so intuitively because there acting on their system all over again, trading just their plan, following every step, entry, exit, position sizing... It's become such a habit that it's almost a routine check that it feels like driving a car. You know where to shift up or down after a while, even without looking at your speed or RPM. Or you can "sense" how fast you're going without having a speedometer.... In any case, if you're saying one can acquire a sense to "predict" the way price is going to move in the next couple of seconds, minutes or hours then I'd be truly amazed if someone could act on it in a profitable way. Unless you equate predicting price movement with defining a x% chance of price going in that direction...

I've lost count of how many times I've said this, but the reason that you were "unable to comprehend why this happened" or why you weren't "able to do anything about it" is that you haven't put in the time and effort to come up with a setup that you have tested thoroughly enough to determine its probability of success. What to you is a setup is in fact no more than what to you seems like a good idea. And since you have no setup, your trading plan is largely wishful thinking. That you roll snake eyes so often should not come as a surprise.

Trading intuitively may come to you eventually, or it may never come to you. But you needn't trade intuitively in order to be consistently profitable. You can instead elect to do the work like nearly everybody else and develop your competence step by step. So, you have to decide whether you want to devote an undetermined amount of time learning to trade intuitively (which will likely entail finding a mentor or coach), or do you want to start making money?

Db

 

[rainman2]

Hi DB,

I was reading a thread about an ex floor broker who uses pivots as his area of interest barometer and he made a point of how he would adjust his pivots during the day due to price action. My question is do you think thats acceptable or do you feel that if price can't make it to support/resistance shows strength/weakness of the instrument? Also if you do feel that intraday s/r can differ from longer term s/r, does volume and wrb's come into play in determining intraday s/r or only price?

Thanks,
rainman2

 

[dc2000]

The bull phase is now under way.first to 40, then to 60 and then tenattively to 80......and then subsequently to even higher levels right up to the end of the day.

This is going to go even higher.

Before it does, a new campaign will be mounted to reaccumulate to further fuel the rise.

And that's it.

a great analysis of the charts right up to the point where you look to the future but then hindsight is a wonderful thing

 

[SOCRATES]

Hi Socrates,

At the 2nd potential selling climax at 13:21 with the highest volume so far (around 5630), than a lower low at 13:33 with less volume (around 5620), isn't that an indication that the sellers are done? Wouldn't the wide range up bar at 13:48 on the highest volume yet confirm that demand had overtaken supply? But yet, a new low at 14:45 occurs before the REAL upmove happens. Can you give any clues, hints, advise on how to spot this so that I wouldn't enter to soon?

Yes, with pleasure. It is the weekend so I have time to explain in detail.

There are 4 significant bottoms.

These bottoms occur at the following price levels: ~

At 36, 21, 12 and 17 approximately....

The first one is nowhere near conclusive.

The second one at a lower level displays fractured volume.

The third is really better .....the volume is nicely packed there showing more harmonius participation.

The last one is at a higher price level.

Notice the behaviour of the price up till now.

Notice what now develops after the 4th bottom...the price begins to rise...the participation is steady into the markup and off it lifts in steady rises with respites.

The thin volume at the end ot the chart has to be disregarded...it is just thinning out at the end of the day and is of no consequence.

I hope and expect this explanation helps.

 

[dbphoenix]

Hi DB,

I was reading a thread about an ex floor broker who uses pivots as his area of interest barometer and he made a point of how he would adjust his pivots during the day due to price action. My question is do you think thats acceptable or do you feel that if price can't make it to support/resistance shows strength/weakness of the instrument? Also if you do feel that intraday s/r can differ from longer term s/r, does volume and wrb's come into play in determining intraday s/r or only price?

Thanks,
rainman2

S/R should always be adjusted according to what price action is telling you.

If price can't make it to S/R, no assumptions should be made with regard to strength or weakness since the trader may not have located S/R correctly.

Longer-term S/R applies until traders no longer pay any attention to it. Intraday S/R constitutes a finer adjustment and differs just as S/R on a 1m chart will differ from S/R on a monthly chart. Trading activity matters with regard to determing or confirming S/R, but I've found it to be irrelevant with regard to real-time trading (hindsight trading is, of course, a different matter, but doesn't help without the aid of a time machine). As for WRBs, they exist only due to the method of illustration chosen by the trader. Price has no idea how the trader has chosen to illustrate it, if he has chosen to do so at all.

Db

 

[SOCRATES]

a great analysis of the charts right up to the point where you look to the future but then hindsight is a wonderful thing

I am puzzled. What exactly do you mean by your statement ? Hindsight ? What hindsight ?

It is patently obvious it wants to go up, at least it is patently obvious to a handful of us if not everybody. Whether it goes up immediately depends on herd response, that is the heart of the matter, nothing else.

Please explain.

I am interested to hear your explanation, rather, what explanation you can offer.

 

[SOCRATES]

I am waiting...

 

[dbphoenix]

I hope that this won't go on for very long as it has been chewed over and over again throughout the 900 posts of this thread.

Everything after "Whys is this ? Is is because of stock shortage ? No." is hindsight and has no relevance at all to real-time trading.

Of course, this won't dissuade beginners from trying to trade this in real time, trying to determine "significance" in real time, finding that they were wrong yet again, and losing money all the while. But there is very little that can stop people from losing their money if they insist on doing so.

Db

 

[dc2000]

the Bears are clearly in control they have not converted they are squaring their positions at the end of the day and will sell hard once again the correct response here is to sell into any strength

 

[SOCRATES]

the Bears are clearly in control they have not converted they are squaring their positions at the end of the day and will sell hard once again the correct response here is to sell into any strength

Really ? They haven't converted ? Even with the price going against them 100 points already ?
Look again at the chart and see what it is telling you, not what you might be guessing, or just for the sake of contradicting, please.

 

[rainman2]

Yes, with pleasure. It is the weekend so I have time to explain in detail.

There are 4 significant bottoms.

These bottoms occur at the following price levels: ~

At 36, 21, 12 and 17 approximately....

The first one is nowhere near conclusive.

The second one at a lower level displays fractured volume.

The third is really better .....the volume is nicely packed there showing more harmonius participation.

The last one is at a higher price level.

Notice the behaviour of the price up till now.

Notice what now develops after the 4th bottom...the price begins to rise...the participation is steady into the markup and off it lifts in steady rises with respites.

The thin volume at the end ot the chart has to be disregarded...it is just thinning out at the end of the day and is of no consequence.

I hope and expect this explanation helps.

Hi Socrates,

Scenario:

At 13:21 - highest volume of the day (sellers still present)

At 13:33 - new low on less volume (potentially sellers are done)

At 13:36 - I enter long on close of inside bar

At 13:48 - highest volume wide range up bar that doesnt close at its high is actually not a sign of strength but a sign that selling is not done. That would be my tip off to get out of my long? That is what I assume you mean by fractured vloume?

 

[dc2000]

the position hasn't gone against them by 100 points they have sold into the market from the previous day and for most of the morning they are then buying back the positions in the afternoon for the next day you would see an early high that would be sold hard

 

[SOCRATES]

Hi Socrates,

Scenario:

At 13:21 - highest volume of the day (sellers still present)

At 13:33 - new low on less volume (potentially sellers are done)

At 13:36 - I enter long on close of inside bar

At 13:48 - highest volume wide range up bar that doesnt close at its high is actually not a sign of strength but a sign that selling is not done. That would be my tip off to get out of my long? That is what I assume you mean by fractured vloume?

Yes correct.

 

[rainman2]

Yes correct.

Thank you for yor perspective. Back to studying charts.