It might be helpful to read the daily and pnf charts before looking at the intraday.I posted this chart to show how well the market has stayed within its channel and what a blow-off top looks like. Notice the sharp acceleration of the move after 105.5 and the pickup in volume. Notice the turn and the ease of movement down. Notice how many hours of upward effort are retraced in just 1 hour of down move after a buying climax. All the buying is exhausted in the frenzied move up and churning at the top.
Notice the sharp acceleration of prices up to 1. Experienced traders with large positions sell, often on a scale up, into this kind of move as it gives them the chance to sell without depressing the price. Demand is either exhausted at the top of 2 or supply overcomes demand. Either way experienced traders see the turn and sell on the way down. The buyers are people waiting for the dip, and their demand is filled by the selling of experienced traders. The selling of experienced traders causes the volume to swell to 7 million shares here and 90,000 in the futures which is even higher comparatively. 2 is called a key reversal day because it goes above the previous bar and closes below it. Note how markedly diminished the volume or demand is on 3's attempt to move up again. This tells us the demand of the buyers has already been filled up. If our deductions are correct, we should get a sharp down move with ease of movement and high volume as more experienced traders push their shares onto the market. This happens to 4. Note at 4 there is not enough supply to make a lower low ( beneath the low of 9:45) and we can guess that this recovery rally might go a long way back toward the top. The only reason I stuck with my position on this rally was the very high futures volume on the key reversal bar. It was just to classic. At 10:50 a trading range begins and at 5 it is upthrusted. The immediate return to the trading range tells us the demand above the range is exhausted. We move sharply down to 6 with eom. At 6 the closes of the next 3 bars are within its range, telling us not enough demand to mount any kind of rally. The same thing happens at 7 where all the closes are within the range of the 12:15 bar. Again we break down with little resistance and with ease of movement. At 8 we spring another tight trading range and this time make a higher high, moving through the turquoise line and test at 10, making a higher low. We have now ended the first little trend marked A and begun the second trend. We weakly rally to the next trading range and upthrust at 11. Same drill, with ease of movement to 12. The lower low means we have potentially begun another small down trend. Should that down trend successfully break the low at A we might very well have begun a downtrend of a higher magnitude.
The only thing I wanted to show on this chart is that the move up to 1070 is a blow off that provides the broad market demand that enables large position holders to not only take profits but to get short.
Wrong day!
Bonds are hugging the top half of their trading range and an upside breakout can be anticipated.
Compare how much effort it took to push the dollar down in April and May versus in September. There is enormous resistance to a downward move. This is one of the reasons that I am in the 4 or 5% that are dollar bullish.
I like the volume figures for the New York Composite (NYA). You can clearly see the blow-off move coming into this week and the very high volume this week. This high volume according to Wyckoff Associates signifies a change in ownership from strong hand to weak hands, the type who are attracted to all the bullish hoopla. Today was a clear buying climax and reversal day. It may only be the first of many but a very good argument can be made that these buying bulges have been going on since early May. That is a lot of distribution.
Notice the sharp acceleration of prices up to 1. Experienced traders with large positions sell, often on a scale up, into this kind of move as it gives them the chance to sell without depressing the price. Demand is either exhausted at the top of 2 or supply overcomes demand. Either way experienced traders see the turn and sell on the way down. The buyers are people waiting for the dip, and their demand is filled by the selling of experienced traders. The selling of experienced traders causes the volume to swell to 7 million shares here and 90,000 in the futures which is even higher comparatively. 2 is called a key reversal day because it goes above the previous bar and closes below it. Note how markedly diminished the volume or demand is on 3's attempt to move up again. This tells us the demand of the buyers has already been filled up. If our deductions are correct, we should get a sharp down move with ease of movement and high volume as more experienced traders push their shares onto the market. This happens to 4. Note at 4 there is not enough supply to make a lower low ( beneath the low of 9:45) and we can guess that this recovery rally might go a long way back toward the top. The only reason I stuck with my position on this rally was the very high futures volume on the key reversal bar. It was just to classic. At 10:50 a trading range begins and at 5 it is upthrusted. The immediate return to the trading range tells us the demand above the range is exhausted. We move sharply down to 6 with eom. At 6 the closes of the next 3 bars are within its range, telling us not enough demand to mount any kind of rally. The same thing happens at 7 where all the closes are within the range of the 12:15 bar. Again we break down with little resistance and with ease of movement. At 8 we spring another tight trading range and this time make a higher high, moving through the turquoise line and test at 10, making a higher low. We have now ended the first little trend marked A and begun the second trend. We weakly rally to the next trading range and upthrust at 11. Same drill, with ease of movement to 12. The lower low means we have potentially begun another small down trend. Should that down trend successfully break the low at A we might very well have begun a downtrend of a higher magnitude.
The only thing I wanted to show on this chart is that the move up to 1070 is a blow off that provides the broad market demand that enables large position holders to not only take profits but to get short.
Wrong day!
Bonds are hugging the top half of their trading range and an upside breakout can be anticipated.
Compare how much effort it took to push the dollar down in April and May versus in September. There is enormous resistance to a downward move. This is one of the reasons that I am in the 4 or 5% that are dollar bullish.
I like the volume figures for the New York Composite (NYA). You can clearly see the blow-off move coming into this week and the very high volume this week. This high volume according to Wyckoff Associates signifies a change in ownership from strong hand to weak hands, the type who are attracted to all the bullish hoopla. Today was a clear buying climax and reversal day. It may only be the first of many but a very good argument can be made that these buying bulges have been going on since early May. That is a lot of distribution.
