Any comment on volume analysis?

[Aus_Trader]

I'm thinking here that sellers are getting close to exhausted. Low volume down day yesterday into an old support area. The prior day was a reasonable up day on better volume. Thoughts anyone?

 

[dbphoenix]

I wouldn't say sellers are exhausted. Rather they met very little resistance to their selling pressure on the way down. Otherwise, trading activity would have been higher. If they had had to work harder, drowning buying pressure, they'd have more reason to be exhausted.

This is not quite the same as saying that sellers are done, which they may well be. If price were now to rise on very little trading activity, i.e., buying pressure encountering little resistance, then you'd be justified in postulating that sellers are done, at least for now, allowing price to float to a level where selling might again be profitable.

--Db

 

[Aus_Trader]

ok. great...thanks

 

[frdyr]

So that implies subsequent price action is more important than how we may choose to label the down day per se?

 

[Aus_Trader]

Just another question.

Using EOD charts with VSA, is a down day meausred close to close or open to close?

 

[Trader333]

My understanding of VSA principles is that you ignore the open completely and look at high, low and close only.


Paul