timsk
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ES Analysis for 30th Nov 07
Analysis for Friday 30th November 07
By Sebastian Manby
This analysis is for educational purposes only, I cannot be held responsible for you own trading.
A; Top reversal, a strong clue that the market is weak, look for no demand.
B; It appears on this bar that the market is supported, it takes a lot of effort to bring the close back up to the open on a down bar.
C; This bar is up and into the top reversal at point A, and has not been able to break through the top, and the volume is very high, and note that the close is off the high, this is weakness, a suttle, but important clue, look for no demand.
D; The previous bar is a wide spread down, close off the low, and this bar appears to be a test on low volume, you would be forgiven for closing out a short if you had one here, up to now the market has displayed signs of strength and weakness both at the same time, this is quite difficult to read, and can be frustrating to a trader.
E; Previous bar is a test, and you may well have gone long on this bar, but at the close of this bar, it becomes clear that the market is not strong enough to sustain higher prices, and as we can see, the close is way off the high, the bears have control for now.
F; The market is now confirmed as weak, this tug of war has resulted in the bears gaining control, and like E, the close is way off the high, but with a slight increase in volume. The bar following this bar is quite clearly stops being caught, as the volume is very high, but note how the close is near the low.
G; A test of the effort by the bulls to take control of this market, a good sign of strength after an effort to stop the decline.
H; A no demand indicator after strength has come into the market, this countermanding indicator tells us that although there is strength in the background, the market is still weak at this point. You have to be careful of these suttle changes in the market.
I; As we retest the lows at G, the volume is low, indicating that the selling has dried up. Look at the low volume with this narrow spread.
J; Another low volume down bar, showing no supply, or no selling pressure here, with the next bar a hidden test.
K; A test after some weakness, I would have though that the new trend line high would be breached after this test, and was surprised when prices declined, this has now become a failed test, and a sign of weakness.
L, This is a weak bar, because the range is narrow, and the high is considerably lower than the high of the previous bar, the volume is quite low also. Then we have a decline to point M.
M; prices have fallen to this point and the volume has increased, the market has made a new low catching a lot of stops in the meantime, but M is an upbar and is a hidden test, as it is not obvious to those who cannot see it.
N; We have another low volume down bar and the close is close to the open, volume is very low ,this indicates that higher prices are a probability.
Outlook;
The market on the daily chart is looking bullish, but as the market rallied from the low at M, we see a wide spread up to the top of the trend channel, now look at the volume on this bar and the following bar, the 2 before the green bar, they have very high volume, and this tells me that the market on Monday is likely to be negative before the opening bell, this is what the chart is telling me, but I would not be surprised to see a rally next week looking at the daily chart, but yesterdays chart has no demand, not a test, and like the failed test we have seen today, we can also see failed no demand if the market is strong enough.
Analysis for Friday 30th November 07
By Sebastian Manby
This analysis is for educational purposes only, I cannot be held responsible for you own trading.
A; Top reversal, a strong clue that the market is weak, look for no demand.
B; It appears on this bar that the market is supported, it takes a lot of effort to bring the close back up to the open on a down bar.
C; This bar is up and into the top reversal at point A, and has not been able to break through the top, and the volume is very high, and note that the close is off the high, this is weakness, a suttle, but important clue, look for no demand.
D; The previous bar is a wide spread down, close off the low, and this bar appears to be a test on low volume, you would be forgiven for closing out a short if you had one here, up to now the market has displayed signs of strength and weakness both at the same time, this is quite difficult to read, and can be frustrating to a trader.
E; Previous bar is a test, and you may well have gone long on this bar, but at the close of this bar, it becomes clear that the market is not strong enough to sustain higher prices, and as we can see, the close is way off the high, the bears have control for now.
F; The market is now confirmed as weak, this tug of war has resulted in the bears gaining control, and like E, the close is way off the high, but with a slight increase in volume. The bar following this bar is quite clearly stops being caught, as the volume is very high, but note how the close is near the low.
G; A test of the effort by the bulls to take control of this market, a good sign of strength after an effort to stop the decline.
H; A no demand indicator after strength has come into the market, this countermanding indicator tells us that although there is strength in the background, the market is still weak at this point. You have to be careful of these suttle changes in the market.
I; As we retest the lows at G, the volume is low, indicating that the selling has dried up. Look at the low volume with this narrow spread.
J; Another low volume down bar, showing no supply, or no selling pressure here, with the next bar a hidden test.
K; A test after some weakness, I would have though that the new trend line high would be breached after this test, and was surprised when prices declined, this has now become a failed test, and a sign of weakness.
L, This is a weak bar, because the range is narrow, and the high is considerably lower than the high of the previous bar, the volume is quite low also. Then we have a decline to point M.
M; prices have fallen to this point and the volume has increased, the market has made a new low catching a lot of stops in the meantime, but M is an upbar and is a hidden test, as it is not obvious to those who cannot see it.
N; We have another low volume down bar and the close is close to the open, volume is very low ,this indicates that higher prices are a probability.
Outlook;
The market on the daily chart is looking bullish, but as the market rallied from the low at M, we see a wide spread up to the top of the trend channel, now look at the volume on this bar and the following bar, the 2 before the green bar, they have very high volume, and this tells me that the market on Monday is likely to be negative before the opening bell, this is what the chart is telling me, but I would not be surprised to see a rally next week looking at the daily chart, but yesterdays chart has no demand, not a test, and like the failed test we have seen today, we can also see failed no demand if the market is strong enough.
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timsk
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The Value of Volume?
There is a thread on the 'Technical Trader' private forum concerning the value of volume. Forum etiquette dictates that I don't copy 'n' paste posts from there to here and, obviously, a link is only going to be of value to members of said forum. So, I'll attempt to summarize some of the comments posted. Suffice to say that the they are from traders who find volume of little or no value. They assert this for the primary reason that volume can be manipulated by professionals in order to disguise their actions and intentions. The obvious inference is that the volume bar you observe on whatever timeframe you're trading isn't necessarily a true and accurate indication of all the trades that have been transacted in that timeframe. The implications for those that practice the art of price volume analysis is self evident.
It sounds similar to the level II debate; some traders swear by it and others think it's worthless. So, I'm curious to know the views of VSA, dbp and anyone else who relies upon volume to a greater or lesser extent in their trading. Do you factor in the possibility that you're not assessing the true picture, ignore it as there's nothing you can do about it or . . ???
Cheers,
Tim.
There is a thread on the 'Technical Trader' private forum concerning the value of volume. Forum etiquette dictates that I don't copy 'n' paste posts from there to here and, obviously, a link is only going to be of value to members of said forum. So, I'll attempt to summarize some of the comments posted. Suffice to say that the they are from traders who find volume of little or no value. They assert this for the primary reason that volume can be manipulated by professionals in order to disguise their actions and intentions. The obvious inference is that the volume bar you observe on whatever timeframe you're trading isn't necessarily a true and accurate indication of all the trades that have been transacted in that timeframe. The implications for those that practice the art of price volume analysis is self evident.
It sounds similar to the level II debate; some traders swear by it and others think it's worthless. So, I'm curious to know the views of VSA, dbp and anyone else who relies upon volume to a greater or lesser extent in their trading. Do you factor in the possibility that you're not assessing the true picture, ignore it as there's nothing you can do about it or . . ???
Cheers,
Tim.
It depends on what you mean by manipulated. The real time volume should be accurate from most futures exchanges. Sometimes too accurate when block trades or rollovers are reported by some exchanges (eg DAX on IB), which are probably of not much interest to people here. (Block trades don't go through the book and therefore have no immediate effect on price)
If you mean that large players may well not throw huge orders at the market because it will move it significantly (or perhaps other reasons such as trying to beat VWAP) then I assume that this is business as normal - it has always been this way, though perhaps with the ever increasing incidence of algo trading, the patterns of volume are becoming more complex.
I'm certain that Grey1 is referring to the second interpretation as an argument against ascribing too much importance to volume - not that the reported real time volume is fixed in some way.
If you mean that large players may well not throw huge orders at the market because it will move it significantly (or perhaps other reasons such as trying to beat VWAP) then I assume that this is business as normal - it has always been this way, though perhaps with the ever increasing incidence of algo trading, the patterns of volume are becoming more complex.
I'm certain that Grey1 is referring to the second interpretation as an argument against ascribing too much importance to volume - not that the reported real time volume is fixed in some way.
timsk
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Hi dcraig1,
Initially, I was referring to deliberate and calculated manipulation by pro's in an attempt to throw other traders off their scent. However, it appears the problem may be compounded by streaming real time data being at odds with historical downloads - from the same vendor. The link below to the NeoTicker forum explains the problem:
http://forums.neoticker.com/showthread.php?t=7991
This is of concern to me as I have eSignal on trial at the moment. The combination of pro's playing silly bu88ers and questionable data from one of the best known and respected vendors in the industry, does rather add weight to the lobby who suggest that volume should not be used for market analysis and subsequent trading decisions.
Thoughts anyone?
Tim.
Timsk,
I doubt you'll see this on European (eg Eurex) markets. One way to verify volume is compare intra-day volume with total of time and Sales volume. I'll try and do this as an experiment tomorrow. (The only potential problem I see here is the inability of Excel to keep up. We'll see).
Grant.
I doubt you'll see this on European (eg Eurex) markets. One way to verify volume is compare intra-day volume with total of time and Sales volume. I'll try and do this as an experiment tomorrow. (The only potential problem I see here is the inability of Excel to keep up. We'll see).
Grant.
I had a very quick look at the neoticker thread. I'd bet that the problem is that eSignal is dropping some ticks in the real time feed.
If you are constructing time series with say 5 min bars from real time data you can do it in a couple of ways:
1. sum the the size ticks over the time window for each bar
2. use the accumulated volume messages to calculate the volume of each bar.
If your data vendor samples or aggregates the data in some way (or drops ticks) , the second method is the only accurate method. Using this with IB data, I have not been able to find anything but very small and for practical purposes insignificant, discrepencies between the real time feed and historical downdloads.
I have written the code for this to use IB or Opentick feeds, so I know what I'm on about.
Of course, it's possible that the eSignal streaming feed is full of errors. There has been a lot of whinging over on ET about it lately.
I once subscribed to eSignal. I was completely underwhelmed. "Respected name" is not a phrase that springs to mind.
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ES Analysis for Monday 3rd December 07
ES Analysis for Monday 3rd December 07
By Sebastian Manby
This analysis is for educational purposes only, I cannot be held responsible for your own trading.
A; A wide spread down on high volume is generally bullish, with the next bar up, a sign that the market is potentially strong.
B; A down bar on low volume, this is a bullish sign, but the high is higher than the previous bar. Then the next bar is wide spread down, and with a substantial increase in volume and the next bar up.
C; This bar is a down bar with lower volume, but the high is greater than the previous bar with the next bar up, but note that the volume is increasing, this is potential liquidation, and with the next bar down, not a good sign.
D; No demand, prices are market up, but there are not enough buyers in the market, this tells us that the market is weak and we are likely to see lower prices.
E; Also no demand, the market is very weak at the moment, and a decline is very likely now.
F; A wide spread down, but the volume is low, this is a surprise because on the previous bar we had weakness, and now suddenly we have a down bar on low volume with the next bar up, this is a bottom reversal and a sign of strength, you can see how the market can reverse, and you can see how the market is manipulated on low volume, this is probably a stop catching maneuver.
G; We have a no demand up bar into point A, this tells us that the old top will not be broken, and since it is going up on low volume, the market is likely to down turn very soon.
H; A sudden test before prices rise, this market has many twists and turns, and the next bar is up on low volume which is no demand.
I; An upthrust with weakness in the background, weakness is still around.
J; This is no demand up bar, but with a down tail I would be reluctant to go short on this one, it does look like a hidden test, which can be strength, so you would have to be cautious on this one, and with weakness in the background it can only go one way.
K; 2 Bars ago, there was demand entering the market, by this bar, the supply has dried up enough to push prices higher.
L; The market cannot go up because this bar is a no demand up bar on low volume, this market is about to be dropped.
M; A bit of a selling climax, the volume is quite high and the close is way off the low, and the next bar is up.
N; No Demand, the smart money is not interested in the upside as they want to churn the market, flushing out as many traders as possible.
O; Further selling climax, the market has returned to the lows, this is a corkscrew effect to churn the market and accumulate as much of the supply at low prices ready for an up move later.
Outlook, on the daily chart, we have a test, this is bullish and I expect prices to rally Tuesday, and possibly for the rest of the week if the market is strong enough, I also expect the market to be bullish Wednesday, with a buying climax right at the end of the session, a golden opportunity to buy at the lows.
ES Analysis for Monday 3rd December 07
By Sebastian Manby
This analysis is for educational purposes only, I cannot be held responsible for your own trading.
A; A wide spread down on high volume is generally bullish, with the next bar up, a sign that the market is potentially strong.
B; A down bar on low volume, this is a bullish sign, but the high is higher than the previous bar. Then the next bar is wide spread down, and with a substantial increase in volume and the next bar up.
C; This bar is a down bar with lower volume, but the high is greater than the previous bar with the next bar up, but note that the volume is increasing, this is potential liquidation, and with the next bar down, not a good sign.
D; No demand, prices are market up, but there are not enough buyers in the market, this tells us that the market is weak and we are likely to see lower prices.
E; Also no demand, the market is very weak at the moment, and a decline is very likely now.
F; A wide spread down, but the volume is low, this is a surprise because on the previous bar we had weakness, and now suddenly we have a down bar on low volume with the next bar up, this is a bottom reversal and a sign of strength, you can see how the market can reverse, and you can see how the market is manipulated on low volume, this is probably a stop catching maneuver.
G; We have a no demand up bar into point A, this tells us that the old top will not be broken, and since it is going up on low volume, the market is likely to down turn very soon.
H; A sudden test before prices rise, this market has many twists and turns, and the next bar is up on low volume which is no demand.
I; An upthrust with weakness in the background, weakness is still around.
J; This is no demand up bar, but with a down tail I would be reluctant to go short on this one, it does look like a hidden test, which can be strength, so you would have to be cautious on this one, and with weakness in the background it can only go one way.
K; 2 Bars ago, there was demand entering the market, by this bar, the supply has dried up enough to push prices higher.
L; The market cannot go up because this bar is a no demand up bar on low volume, this market is about to be dropped.
M; A bit of a selling climax, the volume is quite high and the close is way off the low, and the next bar is up.
N; No Demand, the smart money is not interested in the upside as they want to churn the market, flushing out as many traders as possible.
O; Further selling climax, the market has returned to the lows, this is a corkscrew effect to churn the market and accumulate as much of the supply at low prices ready for an up move later.
Outlook, on the daily chart, we have a test, this is bullish and I expect prices to rally Tuesday, and possibly for the rest of the week if the market is strong enough, I also expect the market to be bullish Wednesday, with a buying climax right at the end of the session, a golden opportunity to buy at the lows.
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Hi Tim;
I am at Tom Williams house for this week, and I'll get him to record a voice file to respond to your question.
Regards Sebastian
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Dow Cash anaysis for 4th Dec
Here is a special audio broadcast by Tom williams on the DJIA 60m chart.
regards Sebastian
Audio link MEGAUPLOAD - The leading online storage and file delivery service
Here is a special audio broadcast by Tom williams on the DJIA 60m chart.
regards Sebastian
Audio link MEGAUPLOAD - The leading online storage and file delivery service
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Erm . . . help!
For the technically inept amongst us, after clicking on the link in VSA Trader's post - what does one do next?
Tim.
hi tim
Look to the top of the page, and type in the code to download, iI have done a screen shot of where you should be looking.
regards Sebastian
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timsk
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Yep, done that Sebastian (4 times now) and and it counts down from 45 seconds to zero and then nothing happens!
Still
Tim.
Yep, done that Sebastian (4 times now) and and it counts down from 45 seconds to zero and then nothing happens!
Still
Tim.
Then you have to press the button called "Free download". A grey button that appears where the countdown was...
If nothing happens when you press that button maybe there is something wrong with your browser or computer... I had no problem downloading it.
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1. click link
2. enter the three letter code in the "Please enter xxx here" field, then click "Download" button.
3. Wait 45 seconds or whatever it is (watch the countdown under the "Free" column). Do NOT click on the "Download Link" until the countdown has finished. If you do, you're starting over.
4. After 45 seconds the countdown becomes a clickable button called "Free download." Click it and click "Save" or "Open." I saved my copy.
Regards,
Seb
2. enter the three letter code in the "Please enter xxx here" field, then click "Download" button.
3. Wait 45 seconds or whatever it is (watch the countdown under the "Free" column). Do NOT click on the "Download Link" until the countdown has finished. If you do, you're starting over.
4. After 45 seconds the countdown becomes a clickable button called "Free download." Click it and click "Save" or "Open." I saved my copy.
Regards,
Seb
timsk
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Hi Sebastian & Skog,
I think I've got a gremlin somewhere. I know what you're thinking - it's not me guv', honest, it's my 'kin machine.
The download started slowly and the counter estimated 1.5 hours which seemed a tad excessive! After 5 minutes it failed anyway. I'll try saving it and see if my luck changes - thanks for the help!Tim.
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ES Analysis for 5th December 07
ES analysis for wednesday 5th Dec 07, i have decided to record with voice and upload the files to a server that you can download, I suggest that you archive them for future refrence.
Audio link here MEGAUPLOAD - The leading online storage and file delivery service
Tell me if you like this method.
Regards Sebastian
ES analysis for wednesday 5th Dec 07, i have decided to record with voice and upload the files to a server that you can download, I suggest that you archive them for future refrence.
Audio link here MEGAUPLOAD - The leading online storage and file delivery service
Tell me if you like this method.
Regards Sebastian
