Here’s An Interesting Twist On Price And Volume
It really is the case that
price and volume are the most important tools in a technicians arsenal.
But, sometimes it pays to look past what we think we
see on the chart, and use some common ‘cents’ when making the interpretation of
what the short-term odds favor for price action.
A very good example of what I mean by this, was
in the S&P500 earlier today–upside volume, usually indicative of strength,
could be used for a high-probability shorting opportunity.
12:24:45
Intraday Setup Alert
The
S&P500 ETF (SPY)
moved aggressively higher on strong volume in filling yesterday’s gap, and
taking out the prior highs. With the index proxy pulling back to what I’ll
call a ‘covering bar’ by shorts, and fresh longs piling–we have a technical
pivot situation of importance. The 110.39 low put in several minutes ago might
be considered as an entry to short the SPY, as we anticipate traders bailing on
their prior purchases, as this level, and uptrend line are broken. The SPY is
off .01 at 110.40.
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Nice. I guess you could call that simple blend of
analysis, the Forrest ‘Dump’ school of trade.
Chris Tyler