[Soultrader]

Interesting chart on ES today. First sign of weakness is shown by the transparent circle on volume increase. Then rallies slightly to hit resistance at a key resistance level from 2/5 high.

[MrPaul]

Here is my take on today’s action for the Russell 2000 futures:

I have included a screen shot of my daily journal to give you an idea of what I’m thinking before I start trading. The journal is created the night before and the parts I add after that are the pre-market notes, and the Wrap up of the day.

Orange arrow- After a few tests down the market is able to rise with some conviction. Notice that the third candle of the day forms a doji like candle and the candle after that prints higher. That is an important indication on momentum shift. A long placed here has fair placement but higher than average risk.

Yellow arrow- The market pushes up to meet supply and long liquidation here but the market still remains technically bullish until the lows of the 7th candle in are broken and closed below. Taking half of your position off could be a wise decision here as there are no certainties only probabilities at the right edge of the chart.

Blue arrow- the market tightens and forms a doji on lower than average volume. The volume is slightly higher than the previous candle but that is favorable for a long bias because the spread is higher! Once again the market closes above a doji signifying momentum to the upside is still present. Close only stops are ideal below this newly formed structure.

Green arrow- After drifting downward from finding no fresh demand that market once again finds volume near the previous days high. Volume increases, spreads lift, and an engulfing pattern is made near 50% of the prior move. This is Ideal for a long trade.

Pink arrows- The market offers two very short, very shallow opportunities to add to your position and/or move your stop orders just below them. Look at the volume, there is no supply being found by the market!

White arrow- Lastly, after a 50-60% pullback the market finds demand that prints as higher than average volume with higher spreads (closing off the lows).

I wasn’t present for the market action during lunch (the slow move lower between 10:15am and 11:00am CST) or the last move of the day, so I cannot comment on the moves after that. Hopefully this helps somebody out…

[speres]

Hello people, my first post here. Been practising VSA for quite a while now. I actually trade supp, res, this does help....... heres my take on yesterdays and current GBP/gpy action vsa only.

A reversal
B wide spread up with a bit of a top tail, high volume, weakness coming in. followed by another high vol wide spread up. Pros using this distribute.
C hidden upthrust. You really don't want to be long now.
D no demand. followed by down bar confirmation
E price attempts a rally but is pushed down

more downside to come probably.

[habi]

Originally Posted by Soultrader »

Interesting chart on ES today.

Yes it is. Let's have a look at a 5 min char and focus on the high volume bars. At point 1, we had a up bar with ultra high volume followed by a shooting star with even higher volume, a clear sign of weakness. I often observed, that prices goes above the first sign of weakness, but then gives you a good short entry.

Contrary at point 2. We had a long down bar on ultra high volume, closing on its low, followed by an up bar with about the same volume and a long lower shadow. A trade below this bar with the additional gap support was a good long opportunity.

[mister ed]

Hi all, this thread is going really well - thank to everyone posting it is really helpful and interesting.

I have posted a bit of an analysis in another thread that could be of interest to Wyckoff and VSA users.

It is reproduced here for interest, hope you dont mind. In this re-post I have corrected one typo, otherwise it is unchanged.

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OK - here is my take on STX as of now. Usual caveats apply. Be interested to hear of others' take on things.

Chart 1, the 1 point by 3 box reversal shows a big spike down to the August 07 lows, and a reaction from there to where it closed today. So once again there was demand around the $19 level (downto $18.50). This spike down could well be what Wyckoff analysts will refer to as Preliminary Support.

Chart 2, a 1 point by 1 box reversal shows me some signs of accumulation beginning - after the preliminary support and 3 point rise we have a small dip (test) and then continued buying (response). Strength. As of now, though, this move from the preliminary supply spike down is not enough to take it on an extended move higher, there will need to be more accumulation before a significant rally can develop. Thus expect sideways (to aid the process of accumulation) from here, not straight up.

Chart 3 is the daily OHLC/candle. It shows some VSA warnings. Zoom in to chart 4 to make these clearer.

I will point out some significant points to me - they are in the past so are of limited value now, but these are the things I do watch for.
The move down in mid Jan on huge volume - reversed by a Marubozu day on the 22nd followed by a bullish hammer the next day (I should clarify, the names of the candles are not the important things, rather the price moves that they represent are what are important to me. And, especially on daily charts, the closing price is of a lot more significance than the opening price)). Both on good size volumes, obviously demand is re-entering the market. Supply showed itself on the 31st - narrow range with jump in volume, but demand was also present that day, there is strength here as indicated by the hammer on the 4th.

The rally since then has been on reasonable volumes, although declining. The price is now re-entering an area of previous congestion (early Jan, $22 to $24). The price action for the 11th shows another test lower (the lower shadow of the candle) with a strong close, but volume is still declining.

For me, the rally from the preliminary support low has about run its course for now, there could well be another point in it, but the probabilities say to me that demand is slowing - any move up above the highs of the 11th are a good opportunity to take profits on longs.

Keep in mind that price volume analysis is like a movie, you have to keep watching as things change, but on what is presented as of now thats my view.

One more thing - it is very interesting with news of the buy back being talked about. If you are of the view that news is used as a tool of manipulation much of the time (I am) then this news is a warning bell that someone wants you to be buying here.

ps - I dont have a feed for US stocks, so I am very impressed by Stockcharts!
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[jjthetrader]

I agree with Mister Ed, the new VSA thread is going very well. Thanks to all. It feels like some of the old has been cleared away to allow others a chance to contribute and I must say I find you guys, real traders, much more helpful in reading VSA then the hindsight analysis/methodology that we were getting used to.

Mister Ed, loved the Point and Figure aspect. Would love to see more of that in the future. I'm just starting to incorporate that now.

SoulTrader, loved the MP addition. Can you elaborate on what signaled you on the 'key support from 2/5' in your MP chart?

Thanks to all contributing.

[Soultrader]

Attached is a .pdf copy of the Ney report. Please read it if you haven't yet. Thanks

[Soultrader]

Interesting chart here on ES using price, volume, and mp levels. First sign of weakness shown by the first transparent sphere. The second weakness was screaming for a short.