[VSA] Volume Spread Analysis Part II

[mister ed]

Thanks Eiger - just after a general impression, not too important

[Primavera]

	Quote:	mister ed
	Eiger, have you read 'Master the Markets', which I always understood was a sort of revised edition of 'Undeclared Secrets'? If so, and if you don't mind, would you make a few comments on the merits of one compared to the other?

Ed

I have both books. MTM is a revised version of "Undeclared Secrets", so if you have one then you don't really need the other. The original book had a number of errors and, in particular, some references to diagrams or particular numbered points on these diagrams were incorrect, which could cause confusion in this subject which in itself can be confusing enough !

MTM is better organised and seems clearer. Most of the book is not Tradeguider biased except that the diagrams are generally using the software platform. However there is a section at the end that specifically deals with the Tradeguider software, which you can ignore if not relevant.

There is also quite a reasonable section in MTM on glossary of terms with examples of e.g. no demand. This is quite useful for reference.

All in all I would go for MTM given the choice, but if you want to get the feel of his master's voice then I think you get it from Undeclared Secrets. I feel that MTM had a ghostwriter who made it clearer but lost some of the original feel.

Primavera

[habi]

	Quote:	DbPhoenix
	Do you want me to show you what you should have been sensitive to last September, or do you want to know how to tell when it's time to exit a long or short trade? If the latter, review the posts that Eiger made to Zeon (299).

Yes DB, I'm very interested in what I had to be sensitive last September. I take the SPY as an example. From mid July to mid August we have seen very high volume, for me a sign, that strenght came in. Then the rally startet, which you see as the exhaustion move. I tried to find myself the weakness. Bar 1 looks like a test, followed by a rally on decreasing volume. Then a large up bar (2) with the highest volume in this last rally. Then after a small correction the final rally on decreasing volume ending with bar 3 on the top.

Was this all enough to identify it as the ending rally?
What more made you that sensitive?
What's your explanation for the very huge volume in July/August?

Thanks for answer and don't look to much to the grammar

[Turning Point]

Hi,
I am interested in buying TG software. At the moment I use e-signal charts.
I get the volume and the bar charts on e-signal. Are there any additional advantages in buying TG software. Also what is the latest version of the software. I am told that when the market is moving fast then the TG software charts gets frozen. Is this true?

[DbPhoenix]

	Quote:	habi
	Yes DB, I'm very interested in what I had to be sensitive last September. I take the SPY as an example. From mid July to mid August we have seen very high volume, for me a sign, that strenght came in. Then the rally startet, which you see as the exhaustion move. I tried to find myself the weakness. Bar 1 looks like a test, followed by a rally on decreasing volume. Then a large up bar (2) with the highest volume in this last rally. Then after a small correction the final rally on decreasing volume ending with bar 3 on the top. Was this all enough to identify it as the ending rally? What more made you that sensitive? What's your explanation for the very huge volume in July/August? Thanks for answer and don't look to much to the grammar

Well, since you asked . . .

This is a big chart, but you have to see what you're doing.

There's nothing remarkable about the volume until August. But the "rally" in July has that tell-tale oval PV relationship. Not a good sign. When price falls shortly thereafter, you have what looks like preliminary support coming in at the first three arrows, culminating in what appears to be a selling climax in mid-August.

All this is fine so far, but look at what happens to volume. High volume is not always necessary. In fact, it can be a warning sign. But when you make that higher high, you've got that oval again, and the only remarkable volume here is on a bar that brings price well below the high (which you'd see even without bars).

After that, volume picks up, but it accompanies a generally downside bias. When a rally attempt is made, it can't hold above the supply line for more than a day, and there's that oval again. On the highest volume here, price is effectively neutral.

Then there are the Transports, which don't even begin to confirm all these rally attempts.

It's not just a matter of this bar or that bar. It's also a matter of "waves". Each rally "wave" -- i.e., the whole thing, not just the individual component bars -- shows weakness where one would expect to see strength. None of this may be a signal to you to head for the exits, but it's a signal that you should at least find out where they are.

[lrabovetskiy]

I am studying the market turns and trying to see if I can detect them using VSA.

Could you please enlighten me concerning the turn I marked by vertical line?
Volume on decline virtually disappeared and I can see support on the weekly chart but is this enough to go long especially considering holidays?

Would you trade this turn and if yes where would you go long?

Thank you very much,

Leonid

[habi]

[quote=DbPhoenix;31477]It's not just a matter of this bar or that bar. It's also a matter of "waves". Each rally "wave" -- i.e., the whole thing, not just the individual component bars -- shows weakness where one would expect to see strength. None of this may be a signal to you to head for the exits, but it's a signal that you should at least find out where they are.
QUOTE]

DB, thanks for your answer. Yes, I try to see it as a whole picture, I don't just focus on single bars. But some bars have more weight tan others, especially those with higher volume imho. What I try to see is not only weakness or strenght but also how much weakness or strenght comes in to define, what I could expect for the following move. The second part is very hard if not impssible.

[DbPhoenix]

	Quote:	habi
	DB, thanks for your answer. Yes, I try to see it as a whole picture, I don't just focus on single bars. But some bars have more weight tan others, especially those with higher volume imho. What I try to see is not only weakness or strenght but also how much weakness or strenght comes in to define, what I could expect for the following move. The second part is very hard if not impssible.

It can be difficult, yes, but less so if you have a well-defined and well-tested setup and the patience to wait for it. Also if you're selective in whom you listen to with regard to what you're supposed to see. The latter is more difficult than the trading.

Incidentally, about the what-to-look-for part, the same dynamic I described above unfolded in 2000. Unfortunately, most people wouldn't listen.

[zdo]

Db,

Curiosity question -where and when did you get / come up with the oval concept.

thx

zdo

[DbPhoenix]

	Quote:	zdo
	Db, Curiosity question -where and when did you get / come up with the oval concept. thx zdo

The first maven I read was William O'Neil, who, in spite of whatever faults he may have (who doesn't), is still the first person I'd recommend to any EOD trader who has any interest at all in melding FA with TA.

Later, of course, I discovered that this idea stretches all the way back to Dow. But that's the nature of truth: it keeps popping up of its own accord.