[Anonymous]

Originally Posted by TinGull »

Perfect today. Note the HUGE action happening here in the circled bar right at VAH...you can also see a diverging delta, showing selling waning, and then BAM!!! You could also notice the increasing volume coming into that VAH. While this may lead some to think that we will go lower...VSA makes you wait for confirmation

Good thing...that abnormally large volume spike with closing price in the middle of the bar is showing you right there that professional activity has come into the market.

How cool.

Nice observations.

A wide spread down bar (close lower then previous bar) that has ultra high volume and closes in the middle of its range is a telltale sign of a transfer of ownership.

The fact that this is happening at the VAH is of no real surprise either. These areas tend to be where Professional Money will show itself. That is why Gavin talked about the importance of (1) volume (2) support/resistance.

For me, what is more important than how one arrives at the support/resistance area, is that one PAYS ATTENTION TO PRICE at these areas. That is, going long as price trades down to these levels makes little sense no matter how "proven" the support area may be. Paying closer attention to what price is doing at this time, however, does make sense.

Support/Resistance areas can not always hold. Otherwise there would be no such thing as a trend. Hence what we really want is to force the Professional Money to show itself in these "expected" areas. Their intentions-to go thru or to respect the area(s) can be seen on the chart.

[Vercingetorix]

Excellent thread, very interesting. I recently read Tom Williams' book (the older edition not master the markets).

I was wondering what you thought about the stock indexes. Looking at the dow I would think that there is background strength, but still a lot of supply. Now bear with me, the concepts of VSA are new to me so this might be totally off, but here is what I see:

1st arrow) We had that down day on a wide spread and high volume the day before. This bar is an up bar on even higher volume. Does this indicate 'hidden' buying on the wide spread down day?

2nd arrow) We make new lows but close near the highs. Is this a stop bar or a test bar? The volume is still high so if it is a test bar does this indicate there is still supply?

3rd arrow and 4rth arrows) These bars look like no demand which would make sense if professionals want more stock at lower prices.

5th arrow) Is this a stop bar, test bar, or down thrust bar? either way I take it to be bullish since we closed on the highs (and found support @ 200 ema). Since we took out the lows from the previous move down it looks like a giant stop run on the daily time frame.

I'm probably off on my analysis, but it looks like all the market needs is a shakeout move and then it should rally. I would be very interested in your guys comments.

[Anonymous]

If you go to Tradeguider.com and view the most recent chart of the week............... you will find Todd is in complete agreement with you. He too sees all the supply in the market and says price needs to come back down and test the lows. Very Nice analysis.

I also see a valid bullish white hammer pattern currently. The key will be once price reaches the mid-point of that WRB (ultra wide spread candle with ultra high volume).

[newsfx]

It is amazing that somebody can read the charts like Todd Krueger. I have read Master the Markets but the information there is very limited. I would like to expand my knowledge about VSA.

Can you guys recommend anything regarding VSA? There is a Boot Camp on tradeguider.com but I am looking for something less expensive. Unless this CD`s are really worth its price. Did anybody purchased them and would like to share some opinions?

This thread and others regarding volume are great. Please post charts and explanation. I would love to do this but my knowledge about VSA is still very limited. I hope that after a while I will be able to share my view on the market.

Greetings

[BlowFish]

I just got master the markets and read it this weekend. I have the original Williams 'paper' book too and prefer the new version. Clearer and less errata, the original had several charts mis labeled and 'supply' where it should have read 'demand' etc. In some ways that was good as it really made you study the charts to see what on earth he was talking about.

I think there is maybe too much information rather than not enough! In odd places things can become a wee bit confused.

I would look at the main principles and then study hundreds (actually probably thousands) of charts until you really 'get it'. Most of what you need in MM.

Another thing, it helped me to think less about predicting what was going to happen and just concentrate on what was happening now. For example you may get a down move ending in a high volume wide(ish) bar that closes high. Price should go up right? Actually all we can say is they have stopped going down (for now). Often it'll drift sideways to up and then crash on down with a wider higher volume bar. A classic 'stair' down. By focusing on the now you can get better at identifying a small correction over a bounce over entering congestion (accumulation/distribution).


Cheers.

[Anonymous]

Originally Posted by Vercingetorix »

Excellent thread, very interesting. I recently read Tom Williams' book (the older edition not master the markets).

I was wondering what you thought about the stock indexes. Looking at the dow I would think that there is background strength, but still a lot of supply. Now bear with me, the concepts of VSA are new to me so this might be totally off, but here is what I see:

1st arrow) We had that down day on a wide spread and high volume the day before. This bar is an up bar on even higher volume. Does this indicate 'hidden' buying on the wide spread down day?

2nd arrow) We make new lows but close near the highs. Is this a stop bar or a test bar? The volume is still high so if it is a test bar does this indicate there is still supply?

3rd arrow and 4rth arrows) These bars look like no demand which would make sense if professionals want more stock at lower prices.

5th arrow) Is this a stop bar, test bar, or down thrust bar? either way I take it to be bullish since we closed on the highs (and found support @ 200 ema). Since we took out the lows from the previous move down it looks like a giant stop run on the daily time frame.

I'm probably off on my analysis, but it looks like all the market needs is a shakeout move and then it should rally. I would be very interested in your guys comments.

I wanted to redress this nice post. I have taken another screen shot that is more up to date. Admittedly, this is after the fact as well as hard right edge analysis.

First, Todd Kreuger still sees weakness in the market and is calling for prices to fall this week. Note that the last black double arrow points to Friday’s action. This bar is a NO DEMAND bar: it closes up from previous bar, closes in its middle and has volume less than the previous two bars.

I will begin at the beginning.

The first thing we see is a wide spread down bar on ultra high volume. This bar is also a WRB. WRB analysis tells us that changes/shifts in supply/demand occur in bars such as these. From a VSA perspective, we have a large range bar that closes down from the previous bar, but closes off its low with ultra high volume. THERE MUST BE DEMAND (BUYING) IN THIS BAR. If this bar was weak, then the close should be on the low.

The next bar is key. This bar closes up. Truly if the previous bar was selling, then this bar should NOT be up. However, we need to take a look at this up bar. Note that the volume is even higher than the previous bar, but the range is narrow. Something is keeping the range down: Supply (Selling Pressure).

The next bar is a High Volume Test. It closes on or near its high, makes a lower low and closes below the previous bar. Again the volume here is high for a test. Which is why the next bar is down and what we actually have is a FAILED TEST.

Now jump to the next bar with the double arrow. This bar closes lower than the previous bar, closes on or near its lows and has volume less than the previous two bars. THIS IS NO SUPPLY.

We do indeed move up a bit from this point. Price moves up and then comes back down. At this point, our secondary method (Japanese Candlestick patterns) is traversing into a valid bullish white hammer pattern.

Note the Hammer. THIS IS ANOTHER TEST. The bar makes a lower low, closes on or near its high and closes up with high volume. If the volume was ultra high, we might call this a SHAKE OUT and see strength, but as a high volume test we see weakness. The Professional Money is testing for sellers and they are finding some. In other words, there is supply underneath this market. Still, price moves up.

We do expect a move back into the WRB support/resistance zone. The reason is beyond the scope of this thread.

Which brings up back to the NO DEMAND sign on Friday. If you use the WRB's as profit target signals there was two so far. It may be time to move the stop just below the last WRB.

[newsfx]

Disregard first arrow. Is the second arrow on daily chart a test bar?
What is the main factor that you can consider particular bar a test bar?

On the 30 min chart this long bar looks to me like a pushing through supply. Am i correct?

Please share your view.

Greetings

[BlowFish]

Great analysis PP looks right on the money to me. Failed tests are interesting, I personally dont find them too reliable.

Thurs and Fri are interesting narrowing range and somewhat reduced volume. (daily indexes and there futures seem to not have the huge volume swings that you see intraday and on stocks). Looks like the bulls are losing interest (no demand). Europe has just opened more or less at the same level. It will be interesting to see where she goes from here. Of course we may test supply higher or they may re establish control or or or but what is going on now is pretty clear to me (PP has hit the nail on the head).

Oh btw PP you mentioned one more 'clue' that was not in your post, mind if I ask what? You aren't a closet indicator user

Have a great week every one.

Cheers.