Price, (Volume), Support, Resistance, Demand, Supply . . .

[JumpOff]

6., 7., 8 . . . ?

The last week of Feb shows one more thrust at R @ 31.5, but there aren't enough new buyers to offset the sellers..Price kisses R and slides down lower volume ending near the low of the bar.

6. First week of March 05, vol as big as the 4th week of Dec, and sometime during the week, there was another buying run @ R, but the selling pressure was greater than the buying pressure and the price closed lower, again near the low of the bar.

The second week of march brings a smaller bar, a down doji, with lower vol, owners may have even had a moment to hope the fall was slowing, will it finish falling?

The third week of march shows a further slide again on higher vol. Long term owners who have been tracking the demand line for momentum watch closely as price approaches it.

The First week of April shows a doji, on lower volume - so the price was in a base most of the week.

Second week of April, there was on last push at the top of that base but no breakthrough and the price plummets with strong volume until it finds some buying pressure again near an area that was resistance through the majority of 04. *Long term owners and potential shorters have both noticed that the price made a LowerLow, broke the long term demand (trend) line, and are getting their ducks in a row to unload if price doesn't make a new high with good volume.

Third week of April, volume increases and buying pressure takes price to about 29.5, - but there is no follow through, and although it's an "up" bar, it's not an "up" sign. Even with that extra volume, the price does not close at the high, but sags back to the middle of the bar.

7. Fourth week of April, stronger volume again, and a lot of folks are changing their positions. It an inside bar and neither side out-pressures the other the price ends a little higher than the last bar, but well off the high.

Last week of April, another inside week (general agreement amount prices for the moment) and lower volume. The bottom of the bar lifts, and technically its an "up" bar, but it's not a strong "up" sign, there is no newer high, and volume is low. A daily or hourly chart would show another base. Those who know how to unload quietly at the top of the base without spooking the herd are doing so now.

First week of May. One of the daily charts for this week would show a "failed poke" above the base. The price has fallen through the bottom of the base and has found some supporting buying pressure because it closed off the bottom. Probably all this activity at the highest price in several years has attracted "those who wait until it's a sure thing" (aka those who usually get burned at the top). Their buying stops the fall of the first week of may (see the volume come in?) and at 8 there is an up bozo that is almost as big as that down bozo from 5 bars ago. Almost. But look at the volume while this is happening - it takes a huge number of transactions to make the price go up, and the price doesn't clear the high of the down bozo that had half the volume.

Second week of may, there is one more push up, but the sellers are beginning to relax their shoulders and smile a little when they cover their mouths. Long term owners are making plans to take their profits (if they haven't already done so during the doji-bases) or considering whether they want to withstand a long term serious 'retracement'. Looks like 70%+ of those who bought since Nov. of 04 are already underwater.

The last little doji doesn't seem to have a volume bar?

JO

I'm reposting the image here for ease of viewing.

 

[RUDEBOY]

The original thread substantiates personal beliefs only! Please! Price action creates volume, it also creates a difference of opinion, this is why volume fluctuates so little in mean market times. Price action dictates volume, and price action nurtures growth of volume. Perspective and ratio of the two factors need to be understood. RB.

 

[dbphoenix]

. . . who have been tracking the supply line for momentum . . .

. . . broke the long term supply (trend) line . . .

I believe you mean "demand" line rather than "supply" line?

 

[JumpOff]

The original thread substantiates personal beliefs only! Please! Price action creates volume, it also creates a difference of opinion, this is why volume fluctuates so little in mean market times. Price action dictates volume, and price action nurtures growth of volume. Perspective and ratio of the two factors need to be understood. RB.

What are mean market times?

Does the rabbit run from the fox, or does the fox chase the rabbit? Two sides of the same coin. As long as I see a rabbit in front of a fox and they are both running, I can surmise they both have their own motivations.
JO

 

[dbphoenix]

1. and 4. Good examples of how price can move substantially with relatively little trading activity if there's not much counter-pressure being applied.

Anyone care to tackle the other notations?

 

[dbphoenix]

No takers, eh?

Well, perhaps someone would be interested in plotting the S/R lines here:

 

[dbphoenix]

And another . . .

Finished. Done.

 

[DTK]

There's nothing like working on some charts to cure a hangover.
Sorry if my lines are hard to see (no matter what color I choose in Paint, they turn out grey)

PS - DBP - is there any reason the "P" in "Consumer StaPles" and "Y" in "Consumer DiscretionarY" are capitalized? The only correlation that I could find was to the last letter of their respective symbols.

And another . . .

Finished. Done.

 

[dbphoenix]

PS - DBP - is there any reason the "P" in "Consumer StaPles" and "Y" in "Consumer DiscretionarY" are capitalized? The only correlation that I could find was to the last letter of their respective symbols.

Just a mnemonic, not quite as obvious as XLI for Industrials or XLB for Basics or XLE for Energy.

 

[skinstg]

Hi, I have a bit to catch up on here, first my attempt at drawing in the S/R lines on the charts provided by DB, as attached

 

[skinstg]

And now an attempt to explain 6/7/8 from post #519, will try be brief again, this is a bit late in the day....
In March $ shows weakness after the double top closing at or near the lows on every bar. Particularly the first & third weeks of March where the volume is noticeably higher than average, and buyers clearly tried to take $ up, they were easily beaten back to close well down.
The first week of April volume is nothing special, but sellers have more intent here, and they take the price down easily, to test potential support formed at approx 28.5 - the fact that price does not get there could be significant..
7&8 - Volume picks up considerably, and the result of the increased volume is positive, with sellers unable to take price down further, the first tentative supply line that could have been drawn in would also now be broken to the upside.

In the bigger picture, although the uptrend/demand line may have been broken, signifying a potential trend change, and we have a lower low, a trend reversal would only take place when that whole basing area (bottom at 26) has been broken through to the downside

 

[skinstg]

And lastly a bash at the chart in #537

2 - After the angle of ascent has increased considerably in Dec/Jan, sellers come in size - profit taking, whatever, after they see that it looks like buyers are running out of ammo on the high bar which closed on the low on very little volume. For all that effort, one may have expected a little more result, however price closed off the lows, and only the follow through would be able to tell us which the dominant size would turn out to be.

3 - Selling pressure takes price down through the first level of resistance, but again is unconvincing, with price closing off the lows, suggesting at least some semblance of support.

TDTDB - To me this is the area that if broken would signify a trend reversal, so we would expect it to be a reasonably strong support level. Im not too sure I understand "the dog that didn't bark" correctly, as I understand it we are right at a crucial level here, and if sellers were going to get price down, there should be a lot of effort with a lot of result, taking us through this support level. As it happens, volume increases slightly, the effort is good (down) but not spectacular, doesent even reach the lowest support level, but from the following bars it is clear that sellers are done, and price rises on little volume.

E/R - The second to last week in October, volume increases significantly - I would have expected price to have a better result with this volume, and break through the resistance, however the result is not significant, a small up bar. The next bar it looks as tho buyers are done, selling pressure takes price down easily, but then buyers come back in and take it up just as easily, all on low volume - real tug of war.
The next couple of bars volume is reasonable, & it looks as tho sellers are gaining the upper hand again, with $ closing near the lows.

Thx DB for providing these exercises, it makes a big difference writing this all down as compared to running it through in your head

 

[dbphoenix]

As a follow-up to post 443 [now 373], another potential retracement entry for further pyramiding.

 

[porgie]

db

Thanks very much even if I asked the wrong questions for the journal, but I have learned some valuable information for my style of trading...Stay focused on left to right.....you really helped me move away from indicators....I can't yet use p/v as I should but, supply demand lines studies led me to a system I now use after a 4 year search}...search was shortened by your multiple journals here and elsewhere...........System accuracy is too high to mention,,,,intraday trading is all I do now....system works on other stuff...but my account and brain are both weak.... I kicked ego out of trading room and am working on fear and greed .... .Have a great and long trading career....Hope to see your stuff again soon....Thanks Again George

 

[pb]

By the way, for anyone interested in P/V, I'd heartily recommend Tom Willams' book 'The Undeclared Secrets...' which I am reading now. I have never read anything like it. Brilliant piece of work!

Quite surprising to see the book gets so little mention (including on T2W). Perhaps it's destined to remain a secret

 

[neil]

Old Toms Book

By the way, for anyone interested in P/V, I'd heartily recommend Tom Willams' book 'The Undeclared Secrets...' which I am reading now. I have never read anything like it. Brilliant piece of work!

Quite surprising to see the book gets so little mention (including on T2W). Perhaps it's destined to remain a secret

I've read it and mentioned it on a T2W thread which lies buried for posterity in its' depths :cheesy:
Maybe it was an early copy because it had many typos and mislabeled charts. However, having allowed for the typos etc I found it to be a significant influence on improving my trading. An essential guide for those contemplating the "Dark Side." :cheesy:
It suits me but I am not so arrogant as to suggest it would suit everyone ( This sentence should obviate the necessity of those who hold indicators etc dear to post their riposts)
May your guru go with you.

 

[dbphoenix]

Quite surprising to see the book gets so little mention (including on T2W). Perhaps it's destined to remain a secret

Hardly a secret. Just do a Search.

 

[neil]

ear u r

Hardly a secret. Just do a Search.

http://www.trade2win.com/boards/search.php?searchid=525365

 

[porgie]

system

Db used to say something about "simple".......I now use the 1 screen simple.....Db said 1 screen is enough for him..good enough for me......that thought kept me coming back to simple....did he give me a plan? .NO...did I need/want him to give me a plan....YES.....should he give me his plan...NO.....I have enough confidence in his trading knowledge and honesty to follow his advice and keep it simple, 1 screen, hand drawn trendlines, etc. that my system came together quicker, not using all of Db's stuff...just a few key points..If I was smarter I would try to continue using all his stuff........My system is correct 95% of the time..backtested ad nauseum......It will never be given away or sold, only traded....it can happen......4 years and thousands of hours..including massive hours of burning midnight oil....and after midnight if I couldn't sleep for thinking about it.......it is simple, but it ain't easy to find........Thank You Db...........Porgie

 

[DTK]

Congratulations on your discovery.
Just out of curiosity, is 95% your win probability?
If so, what's your win/loss?

Trade well,
D

Db used to say something about "simple".......I now use the 1 screen simple.....Db said 1 screen is enough for him..good enough for me......that thought kept me coming back to simple....did he give me a plan? .NO...did I need/want him to give me a plan....YES.....should he give me his plan...NO.....I have enough confidence in his trading knowledge and honesty to follow his advice and keep it simple, 1 screen, hand drawn trendlines, etc. that my system came together quicker, not using all of Db's stuff...just a few key points..If I was smarter I would try to continue using all his stuff........My system is correct 95% of the time..backtested ad nauseum......It will never be given away or sold, only traded....it can happen......4 years and thousands of hours..including massive hours of burning midnight oil....and after midnight if I couldn't sleep for thinking about it.......it is simple, but it ain't easy to find........Thank You Db...........Porgie