Tech/a on Technical Analysis

[tech/a]

Boggo
You got ahead of me!!!

 

[Boggo]

Boggo
You got ahead of me!!!

Ooops, sorry tech/a, didn't mean to do that

 

[tech/a]

So Here is some reading of some of the consolidations on a weekly chart
culminating with the current one which is seen as bullish in real time.



I hope some find this helpful in their study of chart reading.
Try labeling up your own charts.

Next drilling down to daily charts and individual bars and clusters.

In the end I would like to follow this chart and 2 others real-time to help
hone our skills.

Would someone like to suggest the next 2 Preferably Trading with volume and say above $2 or 1
and above $5 for the other.

If you take a good look at the second chart there are some past V/C bars
influencing the Current areas of trading. Not everything is marked up as It would look very confusing for anyone who cant see whats happening.
But I'm sure you'll see what I see if you have a good look!
This repeats so often you just cant ignore it.
You just need to be aware of what your looking for.

Questions?
Can you see this sort of thing repeating in your charts?

 

[rogue1]

"Once most of the stock has been removed from the hands of other traders (ordinary private individuals), there will be little, or no stock left to sell into a mark-up in price (which would normally cause the price to drop). At this point of ‘critical mass’, the resistance to higher prices has been removed from the market. If accumulation has taken place in lots of other stocks, by many other professionals, at a similar time (because market conditions are right), we have the makings of a bull market. Once a bullish move starts, it will continue without resistance, as the supply has now been removed from the market."

I'm making my way slowly through Master the Market, but this paragraph has got me a little bit lost.

Could someone please explain what it means in simple terms..?

 

[tech/a]

Just in Perth for a couple of days so no charts to help

But
Markets or stock cannot rise if supply in large amounts is evident
If this has been exhausted making a new high and through prior accumulation which can now be seen as accumulation as the price has made new highs

Then the stock/s and or markets are free to move up as buyers are forced to buy at higher prices. Supply has been withdrawn

It will re appear again
When it does consolidation is likely
More later but hope this helps

 

[rogue1]

Just in Perth for a couple of days so no charts to help

But
Markets or stock cannot rise if supply in large amounts is evident
If this has been exhausted making a new high and through prior accumulation which can now be seen as accumulation as the price has made new highs

Then the stock/s and or markets are free to move up as buyers are forced to buy at higher prices. Supply has been withdrawn

It will re appear again
When it does consolidation is likely
More later but hope this helps

Ok, that's starting to make more sense to me.

there's basically a balance between supply and demand that affects the market price, so when it skews heavily towards one way it becomes unbalanced, causing the price to shoot upwards.

Tell me if this analogy holds up.

Supply and demand are like two sides on a set of scales. If demand is heavier than supply then price goes up. If demand is lighter than supply then price goes down. And if each side is really out of balance it swings up or down by a large amount.

So in the case of high volume (weight) and unbalanced supply/demand, it swings by a large amount and at a rapid speed, but with low volume it moves slowly.

Am I getting close..?

 

[tech/a]

Yeeess there is a bit more

I find it easier to think as supply controlling price

No supply then demand will pay higher prices as supply withdraws
If there is plenty of supply then demand will withdraw and price will fall
If supply continues even if on low volume and demand is lower than the supply it will fall and vice verca

Volume unless it is extreme has little effect.
Extreme volume and extreme range even if not seen together need to be looked at closely

Not all high wide range bars to the up side are bullish
Very often they are exhaustion of demand and very bearish

I will go through this with charts and situations later

Very very low volume in small consolidations are also very informative.

 

[Joules MM1]

Ok, that's starting to make more sense to me.

there's basically a balance between supply and demand that affects the market price, so when it skews heavily towards one way it becomes unbalanced, causing the price to shoot upwards.

Tell me if this analogy holds up.

Supply and demand are like two sides on a set of scales. If demand is heavier than supply then price goes up. If demand is lighter than supply then price goes down. And if each side is really out of balance it swings up or down by a large amount.

So in the case of high volume (weight) and unbalanced supply/demand, it swings by a large amount and at a rapid speed, but with low volume it moves slowly.

Am I getting close..?

price requires supply to ascend if you agree that price is value, when there is no supply traders on the bid will reason that if they chase weak supply then they'll get stranded when they want to get out so stalemate occurs as bidders have a value level they wont go past

so that raises the obvious question : at what point does volume go from being thin to being extreme or 'heavy' ?

this is a relative exercise, relative to yesterdays volume, time of the day, time of year, the value zone youre in, which maybe determined by how much that price zone was transacted in the past, who's comming to do business, is there news pending that stops traders from committing with pending orders

the context of the volume may play a much larger role than merely the amount of volume, for example, in a strong constructive uptrend offers remain thin because they know that can get a better sell price that's true but that doesnt mean a lot of volume will chase as pro traders look to enter on a pullback ...that scenario is vastly different to a larger consolidation zone where different ideas of value changed overnight .....getting context and relativity in the trade can make a large difference to how you define your risk of entry ......not all sellers are exiting a long and not all sellers are selling to short, not all bidders are opening a position and not all bidders are closing a short.....

you cannot say at any one time that one group is dominant due to the two phases and the size of those phases (chop or trend) what you can do is observe when one group demand is higher by their volume allowing for fake stacking, you can observe when suddenly, relatively/comparatively, a group of sellers want to just get out or a group of buyers relatively/comparatively just have to get in, which requires you to decide on the context, however you make up that context, there is a story to the play, not just "more" volume, what made that volume show up is not always important, sure, but, if you can give the unfolding game a criteria that makes sense to you based on previous observations then you are getting closer to knowing when to take action (entry and exit)

so you see, more sell volume does not always translate to lower prices, it may merely mean price cannot ascend due to a single player offloading and once that player has done their business then price may ascend, so you must decide exactly what the term balance is.......balance is always relative as it changes over time from seconds to days even out to calendar quarters and then you need to think of the context of that volume.....

i say, i think the only hard and fast rule about balance is that you, yourself, must first have the balance of not assuming only one game is so, that the markets are always in balance, there is only one spread* , for the players who are transacting at the time that you are transacting

*this still applies to a widening spread
my 2c

 

[tech/a]

Joules agree in most part

 

[Joules MM1]

NoBStrading vid

go to 1:07mins for a good example of how what's on screen does not define what's transacting in the auction

 

[Joules MM1]

the key there is intent

and the question you can ask: were the offers pulled to entice nervy bidders to chase the offer allowing the offers to get best price without dumping cos we dont know if 500 offers were on trader who only wanted to shift 200 c's pulled the 300 to make a context which is also pulling players who jump on the momentum which is different to players who sit in the que patiently and forces them to make a decision if they think they cannot get "obvious" sell volume .......so there's a game on there which is testing the players ....

 

[rogue1]

How do you manually analyse price spread..?

 

[just_jay]

Would someone like to suggest the next 2 Preferably Trading with volume and say above $2 or 1
and above $5 for the other.

Not quite $5 but I haven't made it very far in my watchlist review which is sorted by market cap. Just some observations.

Also at critical juncture. Breakout pending or a triple top.

I dont see anything exciting on the weekly chart apart from lower vol compared to recent weeks but a quick scan of other charts show a similiar pattern.

 

[tech/a]

I'm finding it difficult to put aside the time on this thread.
But I think I have a way of getting what I see in a chart across
by posting charts I consider worthy of watching/buying/selling/shorting
or adding to. Complete with comments. As they come up Ill post them up.

 

[tech/a]

 

[tech/a]

 

[tech/a]

 

[tech/a]

I SPI!

 

[tech/a]

 

[tech/a]