[VSA] Volume Spread Analysis

[Anonymous]

Interesting chart(s).

Again, the logic is simple. When we see a WRB that happens to be an Effort to Fall, we know that there is a change or shift in the supply/demand dynamics. Here we see that we get No result from that Effort to Fall as price never makes a lower low or a lower close. Price moves up then falls back a bit into the S/R zone created by the body of the WRB. Now, logically, if this was an area where supply was being dumped, then a "test" of this area for supply would make sense. This is what we get. Now we have our low volume sign in the area of previously high volume.

On the 5 min, we just need to look for a point to get long. The first Test is such a place. We know what the 15 looks like at this point and we now see a valid test on this chart. Note that the second Test comes after we get No Demand (see previous post or book). This second Test also appears just prior to the second Test on the 15. The Test on the 15 shows up at 1815. The Test on the 5 appears at 1810 and confirms at 1815.

[Anonymous]

	Quote:	Nick Radge
	Hi everyone, I was asked to visit here with some of my Elliott Wave + VSA analysis. Here is a short video from today. Its an Aussie stock, but you can see how I put the two together. VIDEO HERE Regards Nick

Thank you Nick. Your insights and participation can only make this strong thread even stronger.

[jjthetrader]

I have a quick question about volume on a test.
Whcih one would be true:
a) Lower than the high volume area it's testing
b) Lower than the last two bars
c) Just plain low, relatively speaking

Also, PP what average do you use on your volume for your charts?

Thanks

[tech/a]

From the discussion so far I'm interested in how those involved here would read this chart in particular the last 3 bars Realative to the information on the chart.



(1) Is this a test?
(2) Why?
(3) What do you expect to occur in the future?
(4) What would negate your expectation?

[TinGull]

Thats tough for me to say...it certainly looks like a test, but the only prior support this chart had was broken with these three bars. Would I be looking to take a long? No, I wouldn't yet. Would I on a break above the highs of those 3 bars, sure. It's obviously showing that the old support is now resistance, so if there can be a break of that, then I'd be looking long on a test of that broken resistance.

[tech/a]

Tin
Sorry a bit off topic.
How do I post charts clearly here?
I use photo bucket but when width is important to "See it all" Detail is lost due to re sizing.
Would I be correct in thinking a direct link would serve best?

On the chart---fair comments---I have more but will let the question run a little longer to hopefully gain more comment.There is a point to it all.

[Anonymous]

	Quote:	jjthetrader
	I have a quick question about volume on a test. Whcih one would be true: a) Lower than the high volume area it's testing b) Lower than the last two bars c) Just plain low, relatively speaking Also, PP what average do you use on your volume for your charts? Thanks

ALL OF THE ABOVE.

An ideal Test would have volume less than the previous two and be lower than the high volume area it's testing. Some Tests, however, will have higher volume than the previous bar and still be low in relative terms. Read that again. A Test, which is a low volume signal, can have increasing volume.

A failed Test will have high volume. That is why it fails. They are looking to see that there are NO SELLERS and are finding sellers, as evidenced by high volume. (we would also consider a Test a failed Test if the market does not make a close higher than the close of the test in on of the next 2 bars)

I use a simple 30 moving average of volume. This is what Tom talks about in the book.

[TinGull]

I'm not sure I understand your Q about the charts...they all seem to come thru fine here, and if I need to blow it up I just click on it and it brings me to photobucket with the big view. Is it something on photobucket as for the resizing? You can always upload them here on TL by clicking File Upload tab up top of the page:

[ranj]

	Quote:	jjthetrader
	I have a quick question about volume on a test. Whcih one would be true: a) Lower than the high volume area it's testing b) Lower than the last two bars c) Just plain low, relatively speaking Also, PP what average do you use on your volume for your charts? Thanks

B and C yes
A on longer time frames only,ie daily for stocks
Sometimes these higher volume, successful tests, have demand overcomming supply on short timeframes contained within them

[Anonymous]

	Quote:	TinGull
	Thats tough for me to say...it certainly looks like a test, but the only prior support this chart had was broken with these three bars. Would I be looking to take a long? No, I wouldn't yet. Would I on a break above the highs of those 3 bars, sure. It's obviously showing that the old support is now resistance, so if there can be a break of that, then I'd be looking long on a test of that broken resistance.

It looks like a Test to me but it is not truely a test until or unless I see a close above the high of this potential Test bar in the next 1 or 2 bars. Simply, this is not a confirmed Test.

Based on what TG said, we could see a Test (confirmed) then prices start falling down. Once we would get a close below the low of the test bar, we would have No Result from a Test. This is weakness.

The more likely situation, however, is that a confirmed Test would signal a move higher. We do have a Wide spread bar that closed lower and closed off the low with the next bar down. Relatively speaking, this bar had very high volume. This would be Demand entering the market.