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The S&P Chronicles - An Amalgamation of Wyckoff, VSA and Price Action
In all honesty no - I am aware of other indices and oil (I had a core position in oil yesterday - when oil inventories change more than 5m barrels either way, we more than often (but not always) get a significant move
If the markets are out of sync (a divergence some say might say) like the other day; NASDAQ fell -1.1% and the S&P was flat at 0%, I'm looking for a reason to apply short positions, I'm a firm believer that price will lead the way.
Hope this helps
Can you help answer these questions from other members on NexusFi?
What difference is there between selling climax and stopping volume? Also, is there such a thing as buying climax or you have another name for the opposite of selling climax? Also, Yesterday you identofied a chnage of behavior pointing the the volume on your tick chart. To be honest, i would need to use my imagination to some extent to conclude we had a change of behavior. When price tested 2421 area (prior swing low) price could have started a new wave down just as well.
Selling climax is significantly more bullish than stopping volume. On a 5m chart it can be difficult to distinguish the two:
Stopping volume halts price, the close can be on the lows, middle, and the volume very high
Selling climax, highest volume on the chart, close should be on/or near the highs, we must come from a downtrend
Buying climax is used in the process of distribution
The change of behaviour MUST be used in context. Look deep into the nature of wave C, it has achieved a great deal. The total volume was 153k contracts, more than the previous down wave (147k), suggesting that indeed demand is in this market in a big way. We rally back over yesterdays low (extremely bullish) and back into the trend channel (bullish) If the market was weak and supply in control, this should never happen.
More importantly when we combine both the 5m and tick chart we know that we have a potential selling climax (extremely bullish) As we react to D we have a smaller down wave, with a spring at a confluence area (demand line from the channel and support). Via the 5m we spring - followed by 2 lovely little test bars. Combining all this info the market is telling us that supply is spent for the time being. As wave F prints with no supply we know for sure that supply has dried up. Thinking logically the large wave down has exhausted all the sellers as we have become way oversold
I understand your thinking about the testing at 2421, I too was looking for a short play BUT with all that volume behind us (demand) and what the wave achieves it simply negates the idea of a short position. We would like to see a weak rally with low volume, choppy price action, narrow spreads etc we get the exact opposite.
Thanks for the informative reply. Again on the same topic. we just had a climatic move to the upside 5min chart. Would you qualify it as stopping volume?
I would ideally like to see more data for contextual purposes, other time frames etc. However I am familiar with this chart, as its the S&P. We have our axis line of 2437.00 (purple line in the Chronicles) resistance here is to be expected and indeed supply has emerged. We do get a spike in volume and a mid close, it is stopping volume of sorts, or a mini climax but supply SHOULD turn up here as its a major axis line that has been in play for weeks. Nothing is black and white in this methodology, whats important is that we understand whats price is saying, the labelling is unimportant.
This is something I am struggling to understand with volume analysis.
If that candle close was at a major level with high volume then that is all it is. High volume. We can not attach any meaning to the event.
Lets say contextually, you get a pinbar at a major price rally level where the overall trend is down - do you need volume to tell you that a major exchange occured?
No matter where price is or the PA signal, or how high volume is, you still only have a 50% chance of one thing happening over another.
Im not discounting volume at all, I just have doubts on the real time analysis of it. imo, hindsight is the only way to know how volume affected price.
Now, I am a complete noob when measured against your years of experience so please take this as a constructive question and not an attack on VSA. I am still intrigued by it but it has raised questions for me.
Its very difficult to answer ''what if scenarios'' I do not use candlesticks and have no clue what a pin bar is.
From my perspective I disagree, all we do with this method is to stack the odds in our favour by telling a story of strength or weakness, the quality of buying vs selling, what should happen at support or resistance etc? within context of the market as it is. Volume either confirms the presence of demand or supply, contextually via the close of the bar (which in a way is in hindsight, by one bar) Of course there are always rogue bars, remember one tree doesn't make a forest, its to the left of the chart that provides the necessary information.
We play the market by its own actions in real time by reading price and volume. Its a method that has been used for nearly a 100 years and still to this day used by many hedge funds. It's a great question and not taken personally, IF the method doesn't reside well or has internal conflicts (I had a similar situation with market profile, excellent way to trade, but not the interpretation of the market I desired), simply take whats of use and apply into your existing system.
