Is volume overrated?...

Quote from abattia:

For the Unenlightened (and Great Unclean) like myself, could you explain the above statement in relation to the Head & Shoulders pattern, or point us in the direction of some further explanatory material?

(... which we'll do our very best to understand... although this effort may be quite beyond us ...)
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O majestic one, I would be delighted to point you in the right direction - a direction that is opposite to that of the sepulchre where these chaps reside and are scaring the shit out of Mary Magdalene. :)

Yes its true that Price is the boss, the final arbiter, but Volume shows his vigor. In fact, the venerable Dow Theory that has stood the test of time and is the most sacred of investing methodologies, has quite alot of very nice things to say about volume. You can read up on such in the TA bible, TAST9 - borrow from the library if you just need to review a few chapters.

more follows ....
 
If you can understand these basics (only got time to mention a few) you will be doing OK.

All in my own words of course, no time to check grammar etc., sorry :)

(1) Volume goes with the PRICE trend. Its like fuel. Certain parts of a trend are more powerful than others. Usually, as most technicians of any persuasion already know, the middle portion of a trend is the strongest - why? ... because that is when you have the broadest participation(= volume) of the general public and pubic. Buying (in uptrend) (= volume) is high in this segment of the uptrend. This is an excellent sign of health of the trend.

(2) In the latter stages of the trend (uptrend) buying = volume drops off and slows down noticeably, yet Price still climbs, often it seems on vapor. This is perfectly normal as the last portion of a trend has diminishing numbers of new entrants mostly because most who wanted to buy have already bought.

(3) A point will be reached where everybody including the taxi drivers et al, have already bought. There is nobody else left to buy. The trend reverses specifically because PRICE says so and this is corroborated by NO MORE BUYERS. Also, as we get closer to the end that very few see coming, secretive selling is also taking place aka distribution. All these factors combine to bend the trend
 
(contd-)


(4) When you have a trend like that of the dow Jones for example from March 2009 to current on low, low volume, you must exercise commonsense and look at the bigger picture. If infact the uptrend from March 2009 is the primary trend direction, the volume would be going with it, not against it as I will show you in the next post. So you just have to look to the left and notice how nicely the volume went with the downtrend in 2008. Therefore the direction of the Primary trend is DOWN!!!!!!!!!!!

And the current upswing since March 2009 is therefore COUNTERTREND!!!!

Therefore ....

diminishing volume in a rising market = upward correction = bearmarket rally

The volume did a magnificnet job of informing antediluvian pussy lickers like myself to watch out for this bogus rally!! She was screaming delightfully and telling me how big my cock is etc., but she was fakin it!!!!

Such is the beauty of volume. She is a magnificent tool but placed in the hands of an ET-er, its akin to .... "Man in bathroom with tool in hand is not necessarily a plumber"


What do you get when you put 50 lesbians and 50 politicians in a room together?
100 people who don’t do dick.
 
On the left of chart during the crash it shows how nicely volume went with Price, hand in hand like brother and sister.

But to the right, from the March 2009 low, observe the following ...


the rally to june top was on decreasing volume = suspicious already (note: but you go Long anyway because Price will retrace upto 38.2% to 61.8% of the drop; this is a given basic feature of trends, Price being the final arbiter)

from there onwards note how volume decreases on Price rises and INCREASES on Price drops = bad, bad sign = suspicious.




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Quote from deadbroke:

I count ....

10 idiots

1 sitting on the fence

0 in favor of volume

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verdict: Typical ET. Burn the place down! :) :) :D

Top prize of course goes to Joe Paterno for taking certainty in stupidity to a new plateau. :)

-----------------------------------

Now count me in as 1 in favor of volume

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I'd tell you more about Volume but it would be a fckin waste of time - so I'll just let you watch the weekly Dow Jones for the classic, supreme, el magnifico, creme de la creme S I G N A L that volume is giving - and way ahead of any crash just yet.

The topping pattern known as H&S requires a drying up of volume as the right shoulder is being formed. That is THE dead giveaway that something is amiss and one should expect major shit to go down once the neckline is busted!

Think about the entire rally from March 2009 on the daily chart - low, low volume, right. But it looks better on the weekly, although same story really.

God this place is loaded to the hilt with such high density individuals its fckin pathetic. :)
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Yes I am an idiot at times – no doubt… but at least I can count to 11 accurately


Love it… I have hershey thinking he knows how I trade – and deadbroke thinking he knows how I think

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Btw DB

I could ask you to extrapolate out – to the right – on those charts you posted – and explain how you would identify "specific" set ups – by using volume – to get timing, entry point(s), stop(s) and target(s) correct

But I won’t….


Personally I could have a very specific and tradable set up – extrapolated to the right – using about 4 - 6 trend lines…



Do I use volume – truth is yes I do – for certain things… But I don’t try to shove what I do down others throat just for the hell of it


Happy Weekend all

RN
 
Quote from Redneck:

Yes I am an idiot at times – no doubt… but at least I can count to 11 accurately


Love it… I have hershey thinking he knows how I trade – and deadbroke thinking he knows how I think

-------------------------------------------------------------------------

Btw DB

I could ask you to extrapolate out – to the right – on those charts you posted – and explain how you would identify "specific" set ups – by using volume – to get timing, entry point(s), stop(s) and target(s) correct

But I won’t….


Personally I could have a very specific and tradable set up – extrapolated to the right – using about 4 - 6 trend lines…



Do I use volume – truth is yes I do – for certain things… But I don’t try to shove what I do down others throat just for the hell of it


Happy Weekend all

RN
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Extrapolating to the right would be easy to do, RN .... PRICE + volume, trendlines, even trendlines on volume, Joe Granville's volume vol indicator, etc., etc., I review them when necessary and yes, volume is very, very important and useful.

>>>> and deadbroke thinking he knows how I think <<<<

you posted so and even posted a thread that clearly states volume can be discarded. So it wasn't much of a stetch to conclude you fly the same way.

Then, from above ...

>>>> Do I use volume – truth is yes I do – for certain things… But I don’t try to shove what I do down others throat just for the hell of it <<<<<

psycho babble, namby-pamby, wishy-washy attitude. In real life as with trading, such a softie attitude will get you steamrolled.

>>>> shove down others throat <<<<

Oh, I don't give a fck what these guys do or don't do. I'm doing my internship here and all these posts help ME. That they might (???) help another or others is wonderful;

but for me the maximum learning/pleasure comes from dispersing the HERD. And your reaction confirms this. :) :D
 
Quote from LEAPup:

Agreed!

I've been using the ignore feature like crazy for the past few months, and they still keep comnig out of the woodwork!:eek:
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I wouldn't put Joe on Ignore. He's had a difficult childhood. :) :)

You see, Joe, a HERD member from his father's side, but his Ma was a lioness who was a master of reverse psychology - Joe, a child of particularly intemperate disposition, loved to pull pubic hairs from under girls' dresses and reveled in their shrieks of agony.

At age 7, when Ma returned home late one night after having left little Joe in the capable hands of Mary, their babsitter, she beheld them both outside by the pool with Mary pleading and begging little Joe to go to his room as it was way past his bedtime. Joe wouldn't budge.

Ma sent Mary home and went into the house and returned with a blanket and pillow which she handed to little Joe and said, "have a good night, see you in the morning. Love you"

Little Joe was in his room and in bed in under 5 minutes. :)
 
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