So the problem : Is today's line across 107.24 absorption or distribution. For an answer we will look at the intraday later.
Let's weight the pro's and cons. There are only two negatives on this chart. The first is the climaxing action into 107.55 and the second is the low volume on today's rally. These are more than counteracted by the smallness of the reaction into the 21st and the fall in volume on that reaction.
Unfortunately because of the way this charting service does its hourly charts you cannot see that the fifth hour of trading had higher volume than the third and fourth hours. This is quite unusual and indicates heavy supply as the bar also happens to be a reversal bar.
I want to explain on the two previous charts the points I labelled R. R stand stands for resurrection because these bars are where the bear case was resurrected(just noticed I skipped at least one, can you find it?). On all of these bars the market was rallying strongly and then turned around and moved sharply lower, closing on the low with a wide range from high to low.The market found support and the selling abated at the bars labelled S. After S the market rallied but the bars on the rallies had less range, so it took more time to recover from the damage than to inflict it. The selling is stronger and more intense than the buying. This is a change of behavior and that it is occurring on the day of the FOMC meeting certainly is suggestive.
It is not often that one gets an opportunity to acknowledge one's teachers. David Weis taught
me about comparing hourly volumes and resurrection bars. Gary Fullett taught me the importance of the bar's range. Both are giants of Wyckoff analysis and I wish I could but get a better perch on their shoulders.
