a VSA chart a Day

[flatwallet]

Vercingetorix,

Well I hope you made a boat load from that trade. I wish I knew came across this chart and bought some black swan options on BIDU.

Flatwallet

[Vercingetorix]

	Quote:	flatwallet
	Vercingetorix, Well I hope you made a boat load from that trade. I wish I knew came across this chart and bought some black swan options on BIDU. Flatwallet

Thanks Flatwallet. I bought some May 125 calls for 0.45 last Thursday. They're currently worth 7.5, but I think I'll let them go by the end of the day. By far my best trade in 18 months of playing earnings. These are once a year type plays.

[flatwallet]

Well now you can get the next 16 picks in a row wrong before you give all your earnings. Well done.

One a similar note, how do you go about scanning for no demand, test or up thrust bars. I would be very interested. I think you're playing the VSA stuff the right way. Identify and buy some out of the money Black Swan options. You need about 1 in every 10 correct to make a lot of money. I had a similar call in AMGN where a .05 option turned into 4.80. Unfortunately it was only papaer money as the whole VSA concept is really messing up my current breakout trading system. I prefer VSA but it's hard to give up on old habits.

Anyway wanted to say Congrats...

[Vercingetorix]

	Quote:	flatwallet
	Well now you can get the next 16 picks in a row wrong before you give all your earnings. Well done. One a similar note, how do you go about scanning for no demand, test or up thrust bars. I would be very interested. I think you're playing the VSA stuff the right way. Identify and buy some out of the money Black Swan options. You need about 1 in every 10 correct to make a lot of money. I had a similar call in AMGN where a .05 option turned into 4.80. Unfortunately it was only papaer money as the whole VSA concept is really messing up my current breakout trading system. I prefer VSA but it's hard to give up on old habits. Anyway wanted to say Congrats...

I have no way of scanning for specific VSA patterns since the software I use (quotetracker) doesn't have any chart scanning abilities, although if you were able to program such a thing in another charting package I would be interested. I ran across BIDU because it's been on my radar screen for some time since this is the third time I've played BIDU earnings, each time profitable. I'm running through some charts for companies reporting earnings next week. If I find anything good I'll post here. I've found that out of 50 earnings releases there might only be 2-3 worth playing; the rest are too much of a crap shoot because the chart is not clear.

I know what you mean about thinking differently when it comes to VSA. VSA is still a new concept to me and before I would rely heavily on moving averages and MACD/RSI divergences. I still throw those indicators up on a chart sometimes because they're like having a crutch. A chart with nothing but price and volume can seem intimidating.

[flatwallet]

"A chart with nothing but price and volume can seem intimidating"

Man you hit the nail on the head. However, under current circumstances and knowledge level, it's tough to scan for interesting stocks without using a some indicator as a filter. Currently it is hard to view 1200 charts one at a time.

[Vercingetorix]

I found one stock that interests me.

1) These two bars are wide, ultra-high volume down bars. The first closes in the middle of its range and the second on its high. These would represent buying... the only problem is I don't know their proper VSA name. I'm tempted to say selling climax, but I think that only refers to bars like these that occur in recent new low territory. I'm going to have to consult the book...

2) These look like test bars for supply.

The stock is a bio-tech stock reporting earnings today after the close. Bio-techs are excellent candidates for black-swan events (new drugs, fda approval, buyout, acquisition, etc). Even so it's a high-risk, low-probability play.

[Vercingetorix]

Here is another earnings play I took today (bought the may 125 put for 3.00 this morning) of a company reporting after the close.

1) We have a classic selling climax pattern here. We have an ultra wide ultra high volume up day. The next day is a down bar with high volume indicating that there was hidden selling in the previous bar.

2) Here we have stopping action. The volume is lower than the selling climax which leads me to believe that this alone is not accumulation for a significant move higher. It may have been short covering or buying for a 'mini-campaign'.

3) I consider this box to be action indicative of what I call a "mini" campaign. A full blown campaign would be the accumulation of a large quantity of stock and then marking it up significantly before distributing it to the public. This is the same idea except on a smaller scale... This idea of a miniature campaign isn't a vsa concept but it is something I've noticed on some charts. Anyway we get an upthrust before moving lower. We test for supply and than move up. There is a no demand pattern followed by a test. I point this out because I've noticed that many times during a markup of a stock that it follows this pattern of no demand followed by a test before moving higher. The next three bars are healthy up bars on good volume closing near the high.

4) The "mini" campaign I just mentioned was a bull move, but I think it was a smaller bull move in what will be a bigger bear move. This is an upthrust bar into new all-time highs which I expect to precede a bigger bear move in the stock. The bar occurred on high volume which is "extra bearish"

[flatwallet]

Nice play and it was in real time...nice call