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vsa with Malcolm

  • #2,001
  • Aug 7, 2010 12:56pm Aug 7, 2010 12:56pm
TAKE NOTE OF THE BOLD IN THIS STATEMENT . THIS IS WHAT I THINK MAY HAVE HAPPENED ON THE ES FRIDAY

A shake-out is hallmarked by a wide spread down, which then reverses to close on the highs, accompanied
by high volume. This dramatic manoeuvre is usually carried out on ‘bad news‘. This is a moneymaking
move to catch stops. Those who are long in the market are forced to cover. Those traders who were
thinking bullish are now fearful to enter the market. Those who shorted the market will be forced to buy
back later. For the market to close on, or near, the highs, shows that the professional money is covering
short positions (buying), and absorbing the panic sellers who are being shaken-out by the drastic fall in
price. If the professional money had refused to do this, it is unlikely that the price would close on the
highs, with high volume. Shake-outs occur when the market has been bullish – however, residual supply
will be present, which has caused problems by making the market sluggish, stopping higher prices. As the
professional operators are bullish, they have to remove the latent supply, so they shake the market out on
bad news, which then allows for higher prices.
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  • #2,002
  • Aug 7, 2010 1:10pm Aug 7, 2010 1:10pm
Quoting taomql4
But everybody knows at some point those census workers have to be let go- so why not focus more on the private sector Job creation ? LOL-You
are right though we really have to get back to 150 K job creation before any one can jump for JOY ..

i don't know !!--You know me , i like to see the DJ / SP 500 fly--lol
so maybe am just looking at what i want to see..!!
i am pretty bullish on the markets to be honest . I would not be surprised to see dj back to 14400 and higher by 2013

why ....

all this talk of double recession is bs. Unless they start raising interest rates money will be poured into the stock market as it is the only way to get any kind of returns on pensions of all the baby boomers out there

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  • #2,003
  • Aug 7, 2010 1:18pm Aug 7, 2010 1:18pm
Quoting malcolmb14
i am pretty bullish on the markets to be honest . I would not be surprised to see dj back to 14400 and higher by 2013

why ....

all this talk of double recession is bs. Unless they start raising interest rates money will be poured into the stock market as it is the only way to get any kind of returns on pensions of all the baby boomers out there

Attachment
Why anybody would go up against ben $bernanke and Geithner(Mr. stress Test himself)
still puzzles me . Those guys are trigger happy , always ready to intervene.
  • #2,004
  • Aug 7, 2010 1:27pm Aug 7, 2010 1:27pm
Quoting taomql4
Why anybody would go up against ben $bernanke and Geithner(Mr. stress Test himself)
still puzzles me . Those guys are trigger happy , always ready to intervene.
banks will always make money ... they are controlled by the same group that control the fed ... whoever they may be

also with bonds so low , other than stocks markets where can you get 5 to 7 % dividend return ?
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  • #2,005
  • Aug 7, 2010 1:44pm Aug 7, 2010 1:44pm
Quoting taomql4
Mal --whachu think ?
This looks strong to me but, something is annoying me.

We get a selling climax followed by an up bar which confirms the buying there. Then those 2 bars repeat themselves which is further strength.

We also get a nice 2 bar SO followed by a NS. This would indicate strength.

But here's the rub......the up bar after the 1st selling climax is a failed KRB. It is not perfect because it doesn't make a higher high than the climax bar but it is still a KRB. Now I always thought that a failed KRB was a good indication that prices were going the other way.

So now I dont know whats going on

What do you guys think about the KRB?
  • #2,006
  • Aug 7, 2010 1:48pm Aug 7, 2010 1:48pm
Quoting malcolmb14
test ....

seems es may have a valid test on Friday , down bar closing in upper portion on low volume.

The immediate knee jerk reaction to nfp may have shoke out some longs in the stock market.

We see 1120 support area , then 1122.75 , then 1129.5

1129.5 broken to upside strong chance for 1150. I attribute the low volume right now in July august due to being summer

Attachment
The test looks good Mal, low volume testing into a previously higher volume area. Hope the next bar is up to confirm.
  • #2,007
  • Aug 7, 2010 2:00pm Aug 7, 2010 2:00pm
Pushing Up Through Supply
As an Index or stock rallies upwards, some point will be reached when profit-taking is seen (high volume
up-bars). When this supply hits the market, it will usually rest by going sideways in some sort of trading
range, or testing may occur. However, if this profit taking makes the market fall, any future rally back up
into this old resistance area will now need effort to go up through this area. Effort, in this context, will
show itself as wide spreads with high volume.


look for this on the charts ... sideways action .. any sort of stopping vol , selling climax or tests on down bars 15 min
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  • #2,008
  • Aug 7, 2010 2:01pm Aug 7, 2010 2:01pm
Testing is a very frequent signal and a very good one for going long on. It is seen when you already have
signs of strength in the background. If a market is down during the day and comes back to close on the
highs, on low volume, then we have witnessed a potential test. We would now be expecting to see an
immediate response in the form of an up-move.
If the market drifts sideways and does not respond to the sign of strength, then we must assume the market
is still showing residual weakness. A successful test is a sign of strength that shows that selling (supply)
has disappeared from the market.

look at the chart on the posting

this is exactly what has happened on es on friday

we either have a test or a shake out, monday should be an up day above 1120 into 1127 , should be an easy long


Quoting malcolmb14
test ....

seems es may have a valid test on Friday , down bar closing in upper portion on low volume.

The immediate knee jerk reaction to nfp may have shoke out some longs in the stock market.

We see 1120 support area , then 1122.75 , then 1129.5

1129.5 broken to upside strong chance for 1150. I attribute the low volume right now in July august due to being summer

Attachment
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  • #2,009
  • Aug 7, 2010 2:03pm Aug 7, 2010 2:03pm
lv test classic look at reaction weekly charts ...so yes vsa does work on all time frames.

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  • #2,010
  • Aug 7, 2010 2:08pm Aug 7, 2010 2:08pm
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  • #2,011
  • Aug 7, 2010 2:16pm Aug 7, 2010 2:16pm
Great charts Mal. Post as many as you like, they're always useful.

Are you still taking about 9 or 10 trades per week or has that changed nowadays?
  • #2,012
  • Aug 7, 2010 3:49pm Aug 7, 2010 3:49pm
Quoting Intel
Great charts Mal. Post as many as you like, they're always useful.

Are you still taking about 9 or 10 trades per week or has that changed nowadays?
Agreed.....All the posts are helpful guys.

Im sitting here salavating at that low vol test in the uptrend lol!!
  • #2,013
  • Aug 7, 2010 7:12pm Aug 7, 2010 7:12pm
Great posts malcolm,

But I have doubts about your attached chart. It's hard to say substantial falls have already taken place, since the trend is still up. Actually I am trying to find the differences between stopping volume and selling climax. Both are wide spread, high volume down bar, and both need confirmation by the next up bar, right? IMHO, the differentiator is selling climax put the price level to a new low territory, say, lowest among past 100 bars. what do you think of it?

Best Regards,
polomine

Quoting malcolmb14
After substantial falls have already taken place (bear market), the market may open with wide spreads
down, on very high volume. There will be panic amongst the herd! However, the next day (or bar) is up.
This action represents a rapid transfer of stock, generated from panic selling to professional money (news
will be doom and gloom to help this transfer of stock). This is known as a selling climax.


Attachment
  • #2,014
  • Aug 7, 2010 8:57pm Aug 7, 2010 8:57pm
Quoting polomine
Great posts malcolm,

But I have doubts about your attached chart. It's hard to say substantial falls have already taken place, since the trend is still up. Actually I am trying to find the differences between stopping volume and selling climax. Both are wide spread, high volume down bar, and both need confirmation by the next up bar, right? IMHO, the differentiator is selling climax put the price level to a new low territory, say, lowest among past 100 bars. what do you think of it?

Best Regards,
polomine

as mentioned these are actual examples that tradeguider picked up .

I have and use the software.

I guess at the end of the day selling climax and stopping volume are very similar and all that really matters is that the high vol down bars with next bar up indicate potential buying. i get confused when looking at charts as to the exact terminology but understand what I am looking at when i see ultra high volume down bars.
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  • #2,015
  • Aug 7, 2010 9:39pm Aug 7, 2010 9:39pm
Thanks a lot for your response, malcolm.

Well, no matter what the terminology is, market doesn't like ultra high volume, wide spread down bar. It makes sense.

Regards,
polomine

Quoting malcolmb14
as mentioned these are actual examples that tradeguider picked up .

I have and use the software.

I guess at the end of the day selling climax and stopping volume are very similar and all that really matters is that the high vol down bars with next bar up indicate potential buying. i get confused when looking at charts as to the exact terminology but understand what I am looking at when i see ultra high volume down bars.
  • #2,016
  • Aug 8, 2010 12:56am Aug 8, 2010 12:56am
Quoting mud3210
i see in some posts in other threads that we also have traders commenting on "effort to rise" is sign of strength, while some other say, it is sign of weakness...

So, i am assuming that to correctly confirm weather an "effort to rise" bar is a sign of strength/weakness, we have to take both the background and the...
"Effort to rise" is relative to where the bar (s) close.

For example, if you have 2 up bars both closing on the highs on volume not low or excessive then you have bullish price action and "good" effort to rise because the effort translated into positive price action. However, take the same scenario with both bars closing in the middle with large upper shadows. In that case you have something that struggles to rise with the same effort, which is indication of weakness.

That's one of the main principles in the "Master the Markets" book by the tradeguider guys who introduced VSA.

Hope that helps...

Cheers.
  • #2,017
  • Aug 8, 2010 10:24am Aug 8, 2010 10:24am
Quoting malcolmb14
as mentioned these are actual examples that tradeguider picked up .

I have and use the software.

I guess at the end of the day selling climax and stopping volume are very similar and all that really matters is that the high vol down bars with next bar up indicate potential buying. i get confused when looking at charts as to the exact terminology but understand what I am looking at when i see ultra high volume down bars.
LOL

Using the correct terminology is useful for one thing and one thing only.......communicating. If I could trade like you can, I wouldn't care about the terminology
  • #2,018
  • Aug 8, 2010 11:07am Aug 8, 2010 11:07am
can post a weekly GBP USD FX chart? would like to do some comparison between futures and fx chart. thx

Quoting malcolmb14
lv test classic look at reaction weekly charts ...so yes vsa does work on all time frames.

Attachment
  • #2,019
  • Aug 8, 2010 11:38am Aug 8, 2010 11:38am
Quoting comeinvest
can post a weekly GBP USD FX chart? would like to do some comparison between futures and fx chart. thx
they will be very different I have found daily and weekly fx volumes on mt4 are not that good ...

look at that clear sign of strength at 1.45 , then a shake out just under this level. Man if I had the balls to hold long term , that would of been one of those long term bi yearly set ups for 1500 to 3000 pip

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  • #2,020
  • Aug 8, 2010 1:28pm Aug 8, 2010 1:28pm
Hi Guys,

This is a question that has been touched upon lightly before, but never seems to get much discussion.
Its regarding the 1 hour/4 hour time frames, how do we interept the vols correctly?

Obviously with a 15/50/d/w we get a set period with no real 'thiny' traded times, but on the hour/4hour we notice a surge in vol in market hours and then low vol areas (usually during asia), but the price still moves.

How do we interpret these bars, do we compare them to the day befores bars? how about judging the 'low' vol whilst price still moves?

If anyone can give me a heads up it woud be great, this is the only thing that i cant get my head round...

Thanks.
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