vsa with Malcolm

This thread has less life than Castle Party.

I'll give it one more try.
I'll give it all I have............

There may not be many more of these, so I had to say "Thank You. Tom Williams".



TOM:

I spoke about wings
You just flew

I wondered, I guessed, and I tried
You just knew

I sighed
But you swooned

I saw the crescent
You saw the whole of the moon

A BIG THANK YOU !!! to all of you who are contributing here and keeping this thread alive. . . . . . . . . . . . . . . . . . I am pretty new to VSA and to this thread and this is my first post. I appreciate the invaluable analysis that you guys are sharing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pls keep up the good work.

LOL HG - I dont even know what a Castle Part is -'cept a goth type rave in The Balkans

PS Whilst I rarely post myself these days, I do have this thread on my watch list, mainly to read your posts http://www.forexfactory.com/images/icons/icon14.gif

HG old friend..........you got issues!

If you're a US citizen, please get out and vote tomorrow. It doesn't matter for whom you vote, what matters is that you vote.

The lines may be long, so take a book (or an tablet).

Let your voice be heard.

Hey all, I'm fairly new to VSA. Still trying to understand the terms and the setups. Here are a couple of charts and my take using VSA. I hope someone can tell me if I am reading things right or wrong.

Chart no.1. I was asked to buy this stock last Friday but declined becuase of the highlighted area (Based on VSA). It's kinda similar to the chart below. So I expected it to continue down. And BAM, it shot up 30% on Monday on news... WTH! I'm not saying that VSA will work 100% of the time. So the question is, did I read the setup wrongly?




Chart no.2. Is it right to say that there is a current lack of demand? There was a buying climax followed by a spinning row boat. And currently low volume with small spread. On is this considered a test?



I tried posting this in Smart Facebook but received no reply. Hopefully you guys can guide me along!

Thanks!

Hi HiddenGap
I was looking at some archives and i found this post.Please clarify why the bars D&f are upthurst and not simply "supply coming in" because i thought upthursts are one with high higher than previous bar and close near or at the low.These bars have close more towards the centre.

WOW. What a blast from the past. I miss that mean swing line. I also miss the tri color BPL. My ensign BPL only has two colors.

Tom once said that an Up Thrust closes in the middle or lower.* However, most only focus on those that close lower in the range. Today, I would certainly not call F an Up Thrust. I would indeed see it as "supply coming in".

One thing I noted about D is the Long Shadow. The Long Shadow is greater than the body and greater than the Long Shadows of the previous three candles. In fact, it's the largest shadow on any candle that can be seen. Therefore, I saw this as an Up Thrust in VSA but I was not using an entirely VSA perpective to get there. Today I would not see this as an Up Thrust either. Rather I would see it as a Buying Climax.



* The current version of Tradeguider will only call an interval an Up Thrust if the close is in the lower 33% of the range.

I don't trade stocks so I do not have access to stock data. And I am not going to go find it on the net. I can not see PRICE. Please post pics that better show the candles, and if you can change them to HLC bars. Thanks.

Hi HiddenGap,

As requested, here are the zoomed in charts.

This is a zoomed in version of chart 1.


This is a zoomed in version of chart 2.


Looking forward to your input!

Cheers.

Thank You.

I going to start off by saying, "If you don't know what's going, stay out of the market".

From my perspective it's hard to know what is going on here.

Take a look at the first chart.

This is the first chart that you posted. What I see here is that the market was in a downtrend for some time. Then we have a change in behavior. The market begins to make higher lows. If the market is making higher lows, it can't be in a downtrend. The trend may not be up at this point, but it is no longer down.

Now take a look at the second chart.

The picture is muddy.

1. Ultimately this is the key interval albeit an unclear interval. This is a wide spread up interval in very high volume that closes just off the high. We know markets usually do not like very high volume wide spread up bars. One of the exceptions is when the market is pushing thru supply. When there is an old top to the left, we have to be thinking pushing thru supply and the volume is absorption volume. There is a small top on this chart to the left. If you look at chart 1 there is another top there as well.

Therefore it may be pushing thru supply. What we would want to see is a test to confirm this.

I am going to skip to something advanced here. If this is a bullish interval we would expect that the low would hold. So we can put a trigger line at the low and see what happens when price gets back to this level. Ultimately that trigger holds and #8 is the buy signal (No Supply).

You have to be really good to get this. I am not.

2. This interval is an Up Thrust. The volume increase and the close is near the low. If #1 is strength, this next interval seems to be giving a countermanding signal of weakness.

3. Things don't get any clearer on this interval. We see a narrow range down interval that closes near its low on volume less than the previous two intervals. This is No Supply. This interval would appear to be making the case for #1 being pushing thru supply. But..

4. After the No Supply we get an even narrower up bar on increasing volume that closes up, but closes near its low. This is a Squat (Up Thrust). Something is capping prices. If this was a bullish interval, then the close should be much higher.

5. This is the first interval where we see exactly what we expect. This is a Test. After the previous interval when supply entered, the BBs need to test for more sellers before they take prices higher. Note that the test has the lowest volume we have seen thus far.

If you believe we are in an uptrend, this is the place to get long. We have seen Pushing thru supply which is tested 1-5 intervals later.

6. This interval closes up, confirming the Test on the prior interval. However, note that this interval has the lowest range in the last four intervals and has volume greater than the previous interval. This is a Squat (supply). Also note that like the previous 4 intervals, this interval fails to get above 3.1. There is definitely something (supply) capping prices at this point.

Price begin to fall and if you did enter on the Test at #5, you are probably stopped out.

7. Before looking at this interval, take a look at the interval prior. Note that this interval closed down on decreasing volume. Also note that the interval closed off its low after trading as low as the Trigger Line. Now this interval #7 is a narrow range up bar on volume less than the previous two intervals. This is No Demand.

So whilst this interval back off of the trigger, it does so on less volume. This seems to indicate that price is going to go thru the trigger and continue down.

8. Then we get this interval. I don't like these types of intervals. This interval makes a higher high and not a lower low than the previous interval. But it closes down on volume less than the previous two intervals. Therefore it is No Supply. Again, note that the volume is the lowest since #1.
We're not going through the trigger if volume is not increasing as we move towards it.

At this point, we are making higher highs and higher lows which is the definition of an Uptrend.

We are in an Uptrend and have found No Supply at the Trigger line. This is the place to get long.

With that said, I do not use triggers and would not have seen this entry. For me it's more unclear. A bar of strength followed by a bar of weakness. #9 is weak. This volume should be tested immediately if prices are to continue higher.

STAY IN LINE. If you're in line when the polls close. You still get to vote. Stay in line. Your country needs you.

There is very little on this chart to suggest a hike in prices such as that. In fact, there isn't much strength shown at all.
I would suggest that the strength is due to some micro economic factors such as a company break through or new patent or something like that.
One thing is for sure though, the news was acted upon a few intervals before. The high volume up bar was the first indication, much buying here. Then the UT, mass selling by SM as the herd was drawn in. SM have already made their profits. But, while the herd change thier minds and start to sell, SM start buying. Notice how many times the price is gapped up only to close well down on higher than average volume.........buy a load, withdraw, sell a few. It keeps price from moving against themselves.

Looking at the chart, I'm not sure that the price will hold at the new higher levels. We may see a drop to something similar to the old levels shortly. I wouldn't be surprised to see it drop to a new low either.

Having said all that, I'm in the same camp as HG. I can't form a solid vew so I wouldn't enter the market in either direction.

Thanks HiddenGap and Intel for your take on the charts. Really insightful to see how you guys interprete read the volume and price.

Here is what happened over the past few days.

You chart is starting to take form.

Four bars back, the bar marked 9 by HG, that widespread up bar was gaped up from the bar before, which we know gap ups are usually weak. Combine the very wide spread, the gap up and the ultra high volume it is time to start looking for weakness. Then the next bar after bar 9 is an up thrust which suggests more weakness, but its not time to short this yet we need our confirmation bar either a ND or another up thrust.

Also looking at your zoomed out chart on your first post, there was no indication that a rise in price was coming, no selling climax no shake outs no real testing. So to me it seems the up move on bar 9 was a false break out, price was marked up so that more selling could take place.

If price comes to a trigger line or support/resistance line and stops just before breaking the line on low volume is this an indication that price will most likely push through the line or is it a higher probably that price will be pushed away...

That is a hard question to answer with out a chart.

Lets say in you have a strong background (SC, SO and a test) as a result price rises and pushes through support, then price comes back down to the support it just pushed through and tests with low volume, I would take that trade with out a second thought.

Now if price has been falling for some time and it comes down to support and you see it hit the support with low volume, I would want to wait before entering a long position. Think of it this way, price is a car, volume is the acceleration applied to the car, if you are driving your car and have the gas pedal applied (volume) and you take your foot off the pedal (low volume) is your car (the market) going to suddenly going to start moving backwards? Probably not, background has to be considered.

When you are still learning the ins and outs to VSA the safest way to trade is to find some sort of S/R, when price reaches a S/R area to look at your background and to see if you can find a SC/BC, UT/SO and then start looking for entries at your S/R.

Take this chart for example, first thing that catches your eye should be the huge red volume bar (heh its almost like its giving you the finger) now if you look to see the candle for that volume we have a wide spread up bar closing towards the middle. VSA should have programed in your head by now that up bars on high volume and the close off the high is weakness.

Next we see, well really a series of UTs, so the BC plus the UTs equals shorts. Fib the previous low to the high and we see a LV UT the pops up above support but fails to close above it, enter short position.

Yea didn't think about that. I just saw it as accumulation because it started ranging after a long down move. An accumulation has to be supported by high volume around support with RUT SO and Test. Am I right to say that?

I'll post updates on this counter so it can be a good learning tool for everyone.

Generally speaking we need to see effort if the market intends to move above/below a support/resistance "line". I would assume this to also be the case with triggers. This effort would take the form of a wide spread interval on increasing volume (activity).

Take a look at the chart below:

I don't really use triggers because I don't understand where the trigger should go. That is to say, Gavin has at times used the High, Low, Close and even the Midpoint. Without clearly stating which one is used when. Nevertheless, I have placed a trigger on the chart. I used the low because on the surface the bar is "bullish" as a wide spread up interval closing near its high. If buyers are in charge of this interval, it is reasonable to believe they would support the low.


1. No Demand- this is a narrow range up interval on volume less than the previous two intervals. If the BBs wanted to take price higher, and therefore above the trigger, we would expect more volume. Actually, as stated in MTM, we would expect to see the effort prior to this interval. The example most often used is of a puddle of water. If you want to jump over a puddle of water, you don't wait until you get right up to the puddle before increasing your speed. Rather you want a running start.

1'. This is the interval prior to 1. Whilst the volume is greater than that of the No Demand, it is decreasing. If price was really going to "jump" over the trigger line, you would expect that this interval would be the running start.

2. This is the first bar in a beautiful 2 Bar Reversal. Notice that the volume on this interval is decreasing.

2'. This one is interesting. We do indeed get an increase in activity on this interval. However, if this was indeed the effort bar needed to "jump" over the trigger, the close should not be in the middle of the range. The close tells us that there is supply on this interval.