http://www.streamload.com/hcour/FFIV.gif
FFIV looks like supply has recently taken the upper-hand, at least for now. 3/08 an up day closing on the low on relatively strong vol at previous long-term resistance at 60 and the channel supply line, an overbought condition. Then 3/11 up on extremely high vol but a narrow spread, the close barely above the highs of the last 2 bars and nowhere near that 3/08 high or the supply line. To me this pv combination suggest heavy supply coming in - great effort, little result at resistance in an overbought condition. The next bar 3/14 the widest down spread w/in the uptrend, closing on the low on very strong relative vol. The rally attempt thus far Wed and Thurs on relatively narrow spreads and very low vol.
Compare the 3 previous high-vol bars on this chart to the current: 9/10, 10/27, and 1/20 are wide spreads closing on the highs, breakouts w/shallow retracements, 3/11 is completely different. I look for normal reactions in the area of 50%. Note the retracement levels of the last 3 rally/reactions: The rally from 1/06-1/20 retraces 50% on the reaction to 2/02. 2/02-2/15 rally retraces a skosh beyond 50% on 2/22 (62% for Fibbers) and the close of that day is actually above 50%. So the 2/22-3/08 rally has already been retraced much more deeply and severely on wider spreads and higher relative vol than previously.
As a "Wyckoffian", I'd want to see that uptrend line broken (and preferably some kind of trading range to build a cause) before I'd consider taking a position, but this chart certainly may be exhibiting a "change of character" of supply/demand. At the very least one would expect some consolidation to absorb that supply before any uptrend can resume.
Harold
FFIV looks like supply has recently taken the upper-hand, at least for now. 3/08 an up day closing on the low on relatively strong vol at previous long-term resistance at 60 and the channel supply line, an overbought condition. Then 3/11 up on extremely high vol but a narrow spread, the close barely above the highs of the last 2 bars and nowhere near that 3/08 high or the supply line. To me this pv combination suggest heavy supply coming in - great effort, little result at resistance in an overbought condition. The next bar 3/14 the widest down spread w/in the uptrend, closing on the low on very strong relative vol. The rally attempt thus far Wed and Thurs on relatively narrow spreads and very low vol.
Compare the 3 previous high-vol bars on this chart to the current: 9/10, 10/27, and 1/20 are wide spreads closing on the highs, breakouts w/shallow retracements, 3/11 is completely different. I look for normal reactions in the area of 50%. Note the retracement levels of the last 3 rally/reactions: The rally from 1/06-1/20 retraces 50% on the reaction to 2/02. 2/02-2/15 rally retraces a skosh beyond 50% on 2/22 (62% for Fibbers) and the close of that day is actually above 50%. So the 2/22-3/08 rally has already been retraced much more deeply and severely on wider spreads and higher relative vol than previously.
As a "Wyckoffian", I'd want to see that uptrend line broken (and preferably some kind of trading range to build a cause) before I'd consider taking a position, but this chart certainly may be exhibiting a "change of character" of supply/demand. At the very least one would expect some consolidation to absorb that supply before any uptrend can resume.
Harold
