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Low Volume... Rising prices

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barney

barney

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Just wondering if we might get the opinions of some of the more seasoned traders on ASF as to todays price action, before the next move on the Aussie index.

What can we read into the conspicuous lack of volume across the board today, on rising prices?

We have some important employment data coming out of the US 2nite.

Who is actually pushing the prices higher? Is it just the late comers and is the smart money already positioned, or is it short covering/ a trap for the unwary just before the next fall..?

The lack of volume looks unconvincing to me ............ thoughts anyone?
 
Re: Low Volume ... Rising prices

Lack of volume your not playing with the same guys I'm trying to beat then :eek:

As this will get many a experienced share trader all messed up. I'm posting and running away for the weekend But the ASX follows the SPI futures and the big boys are running the show up higher on VOLUME. Have been for a while.
 

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Re: Low Volume ... Rising prices

Initial volume spike followed by Low volumes as price corrects slightly demonstrates NO SUPPLY----sellers.

This indicates strength.
Watch for any conviction in tests of lows.
ie wide spread high volume.
Low volume will indicate lack of supply
Same for testing of highs.
Wide spread average volume.
High volume will indicate WEAKNESS---supply.

Its the next few bars in ANY timeframe which gives you an insight to future action.
 
Re: Low Volume ... Rising prices

Trembling Hand said:
Lack of volume your not playing with the same guys I'm trying to beat then :eek:

As this will get many a experienced share trader all messed up. I'm posting and running away for the weekend But the ASX follows the SPI futures and the big boys are running the show up higher on VOLUME. Have been for a while.
Click to expand...
TH, looking at your chart, I could also interpret that as the red candle periods also have the highest volumes ie selling the peaks?
 
Obviously, the traders and the market makers that add liquidity have gone broke.
 
Re: Low Volume ... Rising prices

Trembling Hand said:
Lack of volume your not playing with the same guys I'm trying to beat then :eek:

As this will get many a experienced share trader all messed up. I'm posting and running away for the weekend But the ASX follows the SPI futures and the big boys are running the show up higher on VOLUME. Have been for a while.
Click to expand...

Unfortunately I don't have DOM on futures. I was just noticing a lot of large caps were down compared to average mid afternoon .... As it turned out, a lot of volume kicked in late, so I jumped the gun a bit with that observation :eek:

..... which leads me to another question ........ I have been making the assumption (most likely the wrong assumption), that the volume on the XAO is "always" in direct relation to the volume traded on the futures (ie the futures are leading the market so to speak) ........

Is this actually true? Or, is it possible for the volume of the futures to be high, yet the volume of the XAO to not be (or vica verca) ............. Probably a dumb question ..... but somebody has to ask them :D
 
Re: Low Volume ... Rising prices

tech/a said:
Initial volume spike followed by Low volumes as price corrects slightly demonstrates NO SUPPLY----sellers.

This indicates strength.
Watch for any conviction in tests of lows.
ie wide spread high volume.
Low volume will indicate lack of supply
Same for testing of highs.
Wide spread average volume.
High volume will indicate WEAKNESS---supply.

Its the next few bars in ANY timeframe which gives you an insight to future action.
Click to expand...

Thanks Tech, As Uncle has pointed out above re the selling of the peaks .... Looking at TH's chart, how would we interpret the price action on the last 2 bars of the 22nd April and again on the 24th ...... particularly the second last bar of each day where the volume was still high, yet the last bar we saw a sell off ............. Who was doing the buying on the second last bars?? ........... Considering the volume was very high, was whoever were buying about to do their dough?? ..........

ie I'm assuming the "real smart money" was in well before the second last bar, and were pushing the price as high as possible before dumping on the last bar .............. Is this fair comment, or am I missing something here? .........

Maybe I have the wrong perception of how the market works, but I see price action as the "big boys" playing against each other (we, the small guys, are just the spectators who try and hop on the right train at the right station) ... so those second last two bars on the 22nd and 24th to me might represent some of the big boys who "got caught" by "bigger boys" .............. Am I barking up the wrong tree here?

PS I know TH is away partying this weekend so we won't get any response out of him :drink: (maybe next week) ............ so any thoughts from others is much appreciated
 
Barny lets take a look at TH/s chart.

Firstly prior to 22/4 where has price come from---its come from a low. and moved up over 10 periods.This is the first thing to look for.
High volume after a good run up particularly with range not overly wide indicates Supply. Sellers just sold into buyers. The next wide range bar on high volume confirms the weakness as those caught seek sellers at lower prices to get out,hence the wide range.

24/4 is almost a mirror image.

So what else to look for.
High volume as price has been falling lower on an average range bar indicates buyers absorbing supply.We then look for the next bar to either
(1) Test the latest low on LOW volume or
(2) Thrust away from the low on a wide range highish volume bar,the thrust away or range being more important than the volume.---this shows buyers chasing sellers at higher prices.

Low volume small range bars in a consolidation area.
Then look for volume and range that break the consolidation one way or the other.

Hope this is helpful.
 
tech/a said:
Barny lets take a look at TH/s chart.

Firstly prior to 22/4 where has price come from---its come from a low. and moved up over 10 periods.This is the first thing to look for.
High volume after a good run up particularly with range not overly wide indicates Supply. Sellers just sold into buyers. The next wide range bar on high volume confirms the weakness as those caught seek sellers at lower prices to get out,hence the wide range.

24/4 is almost a mirror image.

So what else to look for.
High volume as price has been falling lower on an average range bar indicates buyers absorbing supply.We then look for the next bar to either
(1) Test the latest low on LOW volume or
(2) Thrust away from the low on a wide range highish volume bar,the thrust away or range being more important than the volume.---this shows buyers chasing sellers at higher prices.

Low volume small range bars in a consolidation area.
Then look for volume and range that break the consolidation one way or the other.

Hope this is helpful.
Click to expand...

Very helpful thanks, ......... I'm deviating from my original line of thought on the thread, which was aimed at the XAO index related to futures volume, but some good food for thought here, so as an example of volume analysis, the current price chart on QAN could represent some valuable learning examples based on what you've just said ............

The last 14 days of price action with volume taken into account paints an interesting picture ..........

It looks like "smart money" has been accumulating QAN over the last few days (but I could be totally wrong) ........

It was noted that CBA had sold quite a lot of shares in QAN during that period, but obviously "someone" was stepping up to buy the shares on offer (QAN was also doing a buy back, but announced thay had stopped that a couple of days ago)

Todays price action ...gap up .... wider range on increased volume, implies buying pressure yes?? ............. So if you were holding QAN shares, todays price action looks very positive .............. unless there was a lot of short covering?? (of course F/A could come into play here as QAN is affected by the POO, and it has dropped substantially .... obviously nothing is black and white) ...........

Perhaps this is an example of how F/A and T/A need to be considered in trading decisions ................... then again, maybe the smart money was reading the POO in relation to QAN and perceived the timing was right to buy ................... I really have no idea ............. but it's interesting looking at the possibilities ..
 

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Qan.
Pretty clear.
 

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tech/a said:
Qan.
Pretty clear.
Click to expand...


Agree on that part Tech, but how do we interpret the last 14 days of trading ..particularly the last three to seven days where the average volume has increased with the sp rising.

A friend of mine tried to catch the falling knife on this a few days ago and was getting a bit concerned until the last three days ...... I suggested that it will probably test the lows again based on the severety of the downtrend, but the increase in volume on the current jump looks a bit more promising than it was ............... Is that fair comment or am I giving him false hope?

PS I suggested at the time to wait until a change of trend was proven, or at least wait for a couple of weeks consolidation, but contrarians will be contrarians
 
Here is some closer timeframe analysis---just my opinion.
 

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Re: Low Volume ... Rising prices

Uncle Festivus said:
TH, looking at your chart, I could also interpret that as the red candle periods also have the highest volumes ie selling the peaks?
Click to expand...

Yes. But the thing you have to remember with Futures is that there is not a fixed amount of "issued shares". The Open Interest figures can tell an interesting story as to who is increasing bets and who is running for cover.

With the SPI there is basically two types of big volume players. the Day trading locals that add most of the volume which can be mostly ignored if you are a longer term player. As they push and pull to fill gaps and play games with the punters. The second and more important ones are the BIG volume swingers that hold for long periods (days, weeks, months). They are the ones that push the ASX into trends and break outs. And the good thing is you can track them with the rise and fall in Open Interest.

As per my first post, and a few in the SPI & XAO threads, I noticed on the 21st of April that they were heavily in the market and for the first time in a long time not pushing down!!

Since then its been text book breakout It started with a trap for the Bears as they tried to print a lower high then the next day a very aggressive buying day. Then a little bit of unloading and finally a push and break above highs into the squeeze zone. Will be interesting to see if the Bears take this one on the chin and cover or try to push back into the old range below 5670.

SPIOI.gif

The Histogram is change in Open Interest.
 
Re: Low Volume ... Rising prices

Trembling Hand said:
Yes. But the thing you have to remember with Futures is that there is not a fixed amount of "issued shares". The Open Interest figures can tell an interesting story as to who is increasing bets and who is running for cover.

With the SPI there is basically two types of big volume players. the Day trading locals that add most of the volume which can be mostly ignored if you are a longer term player. As they push and pull to fill gaps and play games with the punters. The second and more important ones are the BIG volume swingers that hold for long periods (days, weeks, months). They are the ones that push the ASX into trends and break outs. And the good thing is you can track them with the rise and fall in Open Interest.

As per my first post, and a few in the SPI & XAO threads, I noticed on the 21st of April that they were heavily in the market and for the first time in a long time not pushing down!!

Since then its been text book breakout It started with a trap for the Bears as they tried to print a lower high then the next day a very aggressive buying day. Then a little bit of unloading and finally a push and break above highs into the squeeze zone. Will be interesting to see if the Bears take this one on the chin and cover or try to push back into the old range below 5670.

SPIOI.gif

The Histogram is change in Open Interest.
Click to expand...

Where do you get your OI data from TH?
 
That first link isn't working for some reason :confused:

When I use it from my bookmarks it sends me to a diff place than clicking that above link although they are the same URL :eek:
 

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