FTSE 100 September 2004

[peterpr]

Here's my take:

Volume per period (ie the number of shares CHANGING hands or transactions completed, per unit of time) is considered by many to have significance in the context of whether prices were rising or falling during that period. Rising volume is often associated with confirmation of a trend and a volume crescendo with an approaching turning point.

For my money it is just 'interesting' and I look at it to see whether or not it tends to confirm a view already largely arrived at using other indicators (some of which have volume as a parameter in any case!).

It's all just too damned complicated really but I seem to muddle through OK

 

[barjon]

For every trade recorded on T&S - there is a buyer and a seller. Simple as that. For every bit of volume there was a buyer and a seller - at that price - for all that volume. For every transaction that hits the print.When I buy the 100,000 from Bracke - I am the buyer/Bracke is the seller.

For the 20 X 5,000 lots I sell to you lesser mortals - I am the seller in each instance and each one of your mortals is the buyer. We're matched in every instance.

Must get back to my Nectar and Ambrosia now...'scuse me...

Tony

mmm, that's how I understood it - must have misunderstood your earlier reply.

no wonder you're as sweet as you are with all that n&a.

cheers

jon

 

[barjon]

Here's my take:

Volume per period (ie the number of shares CHANGING hands or transactions completed, per unit of time) is considered by many to have significance in the context of whether prices were rising or falling during that period. Rising volume is often associated with confirmation of a trend and a volume crescendo with an approaching turning point.

For my money it is just 'interesting' and I look at it to see whether or not it tends to confirm a view already largely arrived at using other indicators (some of which have volume as a parameter in any case!).

It's all just too damned complicated really but I seem to muddle through OK

peter

I'll go with all that !! Since the couple of interesting volume threads I have been having some success recently watching for reversals after high volume surges.

cheers

jon

 

[FetteredChinos]

now short FTSE from 4560. looking for 4540 and below today/tmr...

hit target for long from yesterday. expecting whole move to retrace nicely.

im just a mini-bear for today.

 

[barjon]

Well that little foray into the cold world of the bears didn't last long. Within a whisker of getting a long signal but seems to have backed off from yesterday's high for now ( I do need a close above it tho' although others may not). Back in no-mans-land for now, but if the 574 resistance proves solid.........

 

[FetteredChinos]

you may get a long signal on thursday Bharj, if you are looking for a break above a previous day's high.

thats what this weeks pattern seems to suggest...

 

[barjon]

fc

mmm, yesterday's bar was a potential swing low and I need a close above its high for it to be confirmed (always assuming we don't get a lower low of course). Thursday you reckon, eh, better get my long jons ironed again then and neatly folded ready for action.

you stopped out or still in?

good trading

jon

 

[FetteredChinos]

still short Barj,

stop @ 4585..

i think you may get your lower low tomorrow, by my reckoning, then that will be the swing low until early next week.

am a bit concerned. there is quite a lot of talk about october 2nd precipitating a market collapse. elliot wavers, cyclist, etc are pointing to this to be a major turning point.

Bradley model has today as a turning point too, and that is invariably accurate, give or take a couple of days...


hmm, food for thought.

FC

 

[barjon]

fc

You will keep coming up with these little snippets to feed us

That seems a pretty wide stop for a day's business - and more than your target minimum? How do you decide it? I'm interested 'cos I've been having stop troubles recently.

jon

 

[FetteredChinos]

not just a day's business mon ami. its half-position trade, half-daytrade.

will probably roll over into tomorrow.

from which (4540 region) we should bounce for the rest of the week.


i prefer to trade with wide-ish stops. its less fretful, and doesnt require me to watch the screen all the time. also, 25 pts is roughly equivalent to a daily range on a quiet day. thus something has to go drastically wrong for it to be hit....


still, us open is coming up. lets see what it does to the FTSE today...

FS

 

[pb]

I must say I am surprised by today's action. Not that I am covering my shorts or anything like that, but I am just surprised. Particularly after Dow's disastrous show last night.

We'll see how long FTSE can hold out against a generally pessimistic market and a downbeat US.

 

[bracke]

Volume

I am confused ( nothing new in that )

When shares are sold, that is recorded as a sell and a buy. If this is correct how come volume charts show buying volume and selling volume as different colours, surely one would cancel out the other.

Answers in words of one syllable, two if you must, would be appreciated.

Regards

bracke

 

[bracke]

I must say I am surprised by today's action. Not that I am covering my shorts or anything like that, but I am just surprised. Particularly after Dow's disastrous show last night.

We'll see how long FTSE can hold out against a generally pessimistic market and a downbeat US.

pratbh

Your prejudice is showing.

The dow fall of 58 points is only 0.58%, hardly disastrous. I appreciate that it closed below 10,000 which is ominous but methinks that you protest too loudly at this juncture.

Regards

bracke

 

[barjon]

Volume

I am confused ( nothing new in that )

When shares are sold, that is recorded as a sell and a buy. If this is correct how come volume charts show buying volume and selling volume as different colours, surely one would cancel out the other.

Answers in words of one syllable, two if you must, would be appreciated.

Regards

bracke

bracke

As I said earlier, I think it's judged on the price struck. If a share is quoted at 100 - 104 a deal struck at 101 will assumed to have been initiated by a seller and it is recorded as sell volume even though there is, of course, a buyer on the other side of the deal. Similarly, If the deal is struck at 103 it's assumed to have been initiated by a buyer and it is recorded as buy volume. If it's struck at 102 it's recorded as unknown. The three "guesses" are added together to give the only actual reality - that of the total volume. In the total volume of shares traded; sales = purchases, which is as you say.

I think these guesses (if I've understood it all correctly) are very unreliable and you often find that a share has risen quite strongly despite that "selling" volume has massively outweighed "buying" volume. I don't think you can think of selling or buying volume - only overall volume.

good trading

jon

 

[peterpr]

Volume

I am confused ( nothing new in that )

When shares are sold, that is recorded as a sell and a buy. If this is correct how come volume charts show buying volume and selling volume as different colours, surely one would cancel out the other.

Answers in words of one syllable, two if you must, would be appreciated.

Regards

bracke

Bracke

Not sure about precisely the charts you mean but the only volume charts I look at are Volume per period (daily/hourly - whatever). Though I reckon the shorter the period the less reliable the volume bar. I have my charts configured to show different colours for each bar according to whether prices rise or fall during the period. It's not accurate to describe one as buy and the other as sell volume but its a useage I often encounter. It's just the direction that price moved overall during the period the volume was transacted.

I was away all yesterday - missed a nice short covering opportunity at @ 4430 I see (no limit set and old Harry Hindsight says I would probably have covered in anticipation of the bounce - see my last post). Anyway I am now wondering how much upside is left in this bounce (stop currently at 4610

 

[bracke]

barjon & peterpr

Thank you for your replies to my volume query, I understand what you are saying.

peterpr

Shall I move the Bearskin to a front burner ?

Regards

bracke

ps Did you mean 4530

 

[peterpr]

barjon & peterpr

Shall I move the Bearskin to a front burner ?

Regards

bracke

ps Did you mean 4530

Leave it in the cupboard for now!
+
Oops - yes 4530

I'm no more confident than anyone else about where it's going. I try to trade in a disciplined manner off technicals but with my view of the overall fundamentals picture dictating my bias - that is still as stated a couple of posts ago.

Have to admit that the Elliott boys are not entirely in agreement - though most favouring intra-week shorts to around 4400 ish. There's a similar divergence of opinion among the gap/swing/trend et al analysts too - at least the ones I follow. I have found serious mixed signals/opinion like that tend to favour a major turn so I'm sticking with it - short that is.

Interesting to note that, on balance the move up during September has been on rising volume; the recent down on reducing volume and yesterday's up on increased volume. That's another load of mixed messages to deal with!

 

[barjon]

peter

I assume you don't let your bias affect intraday trading? For the longer term does your bias mean you just look for short opportunities or that you'll take longs but for a reduced position?

jon

 

[peterpr]

peter

I assume you don't let your bias affect intraday trading? For the longer term does your bias mean you just look for short opportunities or that you'll take longs but for a reduced position?

jon

Jon

I try not to let it affect the exact timing of button-pushing decisions at all - but inevitably it does (slower off the mark on longs and jumping the gun on shorts is the current tendency!). I admit that having any bias is probably a bad thing from a strict technical perspective and my guess is that it may even have depressed my win/lose ratio. If I can get an accurate handle on that somehow, it will probably translate into some kind of contrarian input such that I force it to operate opposite to what it is indicating! Probably tie myself up in enormous knots the process too.

It does help to make discussion more than just a series of mechanistic/arithmetical exchanges though - for what that's worth

 

[peterpr]

Shame not to have a single post on the last day of the month so here goes:

Being short with a large (for me) position net at @ 4590 from yesterday - having added to one from last Thursday @ 4470, I have to confess to a degree of nervousness watching the action through this morning.

Blessed relief!

I'm now pretty much confirmed in the view that we are in a relatively minor degree wave 3 of 5 down which will test the 4300 area (That's the EW interpretation for what it's worth anyway). Though chicken that I am, I've covered half the position at 4564 in the hope of getting back in - intra-day - a little bit higher.

It apears that tomorrow is the last trading day of some major fib time frames. That, together with tonight's Kerry/Bush encounter could make for some pretty dramatic action tomorrow - and crashes are usually Friday/Monday affairs aren't they? - Can't wait!