[Eiger]

I appologize to you Monad for my recent comment and have delted as you requested.

Eiger

[monad]

Accepted, let us put all this behind us,

Next time instruct Manby to come in and face the music himself.
Don't be naive enough to just blindly believe what he or anybody at TG says, you are dealing with savvy southern England crowd here, so take heed)))
All of these guys have skeletons in their cupboards, There is no smoke without fire

[Tasuki]

Originally Posted by monad »

you are dealing with savvy southern England crowd here, so take heed)))
All of these guys have skeletons in their cupboards,

Sorry, just can't resist---*savvy* southern England, you mean like the fairy twinklers in Glastonbury?
Again, apologies, it's been a tough morning---the phrase, I believe, is "skeletons in the *closet*, unless you Brits have expanded your cupboard space dramatically since I was last there.

OK, enough foolishness. I have a serious invitation. I'd like all you VSA experts to please visit the Volume Splitter thread in the coding forum, and check out my latest post (permalink #311).

The fourth chart is the one I want you to look at.

For a little background, the entire point of the Volume Splitter thread is to see visual proof on your charts of the actions of the big traders. VSA has always said, "if you see big volume, it has to come from big traders." Yup, makes perfect sense, but maybe you could gain some additional information if you had an indicator that visually showed you what they were doing, and how strongly they were doing it. Then again, maybe you couldn't gain additional information---the volume splitter thread is a work in progress, and maybe we're all wet.

It's been tough sledding in the Volume Splitter thread, but I think that we have finally done it. Then again, maybe not, which is why I'd really like you folks to check it out.

Yeah, yeah, I know, it's a squiggly line, but maybe this one is not a lagging indicator. Just for the record, the indicator says VS_MACD2---however, it doesn't look like a MACD, nor does it behave like one.

VSA purists will turn up their royal noses at the idea that a squiggly line could give them information about the big traders, but I urge you to keep an open mind. You know what they say, minds are like parachutes--they only work when open.

[SRspider]

Hello, I am new to this thread and have found it very beneficial thus far. Have only been reading for a week and still have a lot of catching up to do. However Its seems very logical and since then I have been watching the market with this analysis in mind. Here is a chart of what i saw on friday with a question on one of the concepts I have read about. Any comments would be appreciate it.
thanks to all who have contributed to this great thread.

[monad]

Originally Posted by Tasuki »

Sorry, just can't resist---*savvy* southern England, you mean like the fairy twinklers in Glastonbury?
Again, apologies, it's been a tough morning---the phrase, I believe, is "skeletons in the *closet*, unless you Brits have expanded your cupboard space dramatically since I was last there.

From where we are Glastonbury is strictly south west, where as you say "fairy twinklers" "The New Age Crowd" hang out. Don't think they are much bothered about the markets. That would be too mundane for them))

Spacewise we cannot match anything in US, whenever I get back from a trip to US, everything looks so cramped here but we like to imagine that our closets are like big US cupboards with lot more skeletons

Good Trading

[Eiger]

Originally Posted by SRspider »

Hello, I am new to this thread and have found it very beneficial thus far. Have only been reading for a week and still have a lot of catching up to do. However Its seems very logical and since then I have been watching the market with this analysis in mind. Here is a chart of what i saw on friday with a question on one of the concepts I have read about. Any comments would be appreciate it.
thanks to all who have contributed to this great thread.

A way to look at this chart from the VSA perspective is to first note the background conditions. The background indicates that this market has been trending down for most of the day. Although some volume came in at A, it was not climactic, which would give a clearer indication that the downtrend was over - so background is weakness.

The rally up to C becomes overheated as we reach the old top at B. Spreads widen, volume suddenly expands. The spread and volume indicate activity. Markets do not like high volume on up bars because along with the buying, significant selling occurs within the high volume. We have high volume up bars on both 1 & 2.

Stepping back from the individual bars a bit, note how the angle of accent steepens dramatically after D. It is unlikely that this can be sustained, though it looks to the untrained eye to be quite bullish and many traders are buying into the rally here.

At bar 2, volume is essentially the same as the volume on the wide spread bar at 1. Notice the difference in the spreads between bar 2 and bar 1, yet the volume is nearly identical. This can mean only one thing - significant selling occurred on this bar. The volume indicates substantial activity (both buying and selling), but the spread shows that for all the buying taking place, the selling not only matched the buying, but prevented price from moving higher. Another way to think about it is this: if buyers were truely in control on bar 2, then bar 2's spread would be similar to the spread of bar 1 and price would have rallied up to about the level of E, give or take. Instead, it is the narrowest bar in the rally. Only large, professional interests who have the wherewithall can do this.

Bar 3 tends to confirm the immediate weakness. The market tries to rally higher and makes a new high, but then falls and closes well below bar 2. The thrust to the upside has shortened, and we see a close just below resistance at B. The spread has also widened (compared to bar 2) to the downside, indicating weakness.

Bar 3, though, has volume less than the previous two bars. So some may see this as a Test bar. It is a bit wide for a clean Test bar, but more importantly, there is weakness in the background. We discount tests when the backround is bearish.

But, let's say you weren't sure. Maybe you are thinking that this is a Test that is occuring after some weakness has come in and maybe the test is negating that weakness.

The key to solve this dilemma is the next bar or two, and the very next bar tells us.

The bar after 3 is another down bar (lower close) and closing under the resistance at B. It is also making a lower high and a lower low (bar high and bar low). Note the volume. This is the key here. It increases. It is showing downside pressure as it slips lower.

Again, another way to think about this is that if the increase in volume was buying over selling, then the bar after 3 would be up making a higher high and the spread would likely be wider as well.

Instead, it has the largest volume of any down bar since the rally at A. During the rally from A to C, down bars brought out lighter volume (it was the up bars that had good volume). Now this has changed and we see volume come in to the downside. So, this shows us that market behavior has indeed changed from up to down, further confirming the weakness we have seen on bars 1, 2, & 3.

When you are unclear about what is going on, wait for a bar or two -- it will usually tell you (a useful rule of thumb).

This is a nice study and I am glad you posted it. It illustrates how to properly use VSA:

• Always, always, always seek first to understand the background
• Identify key support & resistance levels
• Look for the important VSA principles to unfold on your chart, especially at S/R
• Be detailed about how you look at the bars, but always stepping back to gain a wider picture
• If unclear about what is happening, be patient. The next bar or two will usually help you interpret what is going on.

Hope this is helpful,

Eiger

[SRspider]

Thank you for a well thought out explanation. It was very educational.

[TheRumpledOne]

Thanks for sharing, Eiger.