Paul,
Actually I posted a link to the wrong chart. The volume picture on QQQ is much more clear; on COMPX it is admittedly not. Now admittedly its a market that only trades billions on a daily basis, but perhaps it matters a little, since it its widely used as a hedging vehicle.
Volume on futures is harder to determine. The picture is murkier, however tick volume on ND H1 does in fact decline.
Regarding where to position lines, the positioning is not arbitrary at all, despite the outward appearance. All I can say is given 100, 1000 or 10000 different charts, I would draw them in an identical fashion.
A hint, outside bars rarely factor in the identification of swing points. And frankly I attach little weight to price action that happens in the first 10-30 minutes of any major fed action, particularily in the futures market that I trade, since stops on either side are actively run through and very little "thought" goes into those wild gyrations.
The bottom line on volume - its not as clear as a picture as you portray it - and two major hedging vehicles show the classic declining volume trend that we'd look for in a wedge scenario.
Perhaps for murkieness reasons alone, it probably makes sense to be open to alternative interpretations.
Having said that, I don't use channels at all, so perhaps I'm close minded. But I guess we all work with what works for us.
regards
Mike |
