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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (1742)	7/9/1999 9:48:00 PM
From: TraderAlan	Respond to of 18137

Ramsey, I'm reposting this from #767 of this thread: The Silent Alarm Short-term volume may issue a powerful signal under special circumstances. This Silent Alarm occurs rarely but flags a significant trading opportunity. The Alarm sounds when three conditions are met: - Price bar volume exceeds 3 times the average of the last 50 bars (this can be raised to 5x to filter whipsaws) - Price bar daily range is below the average of the last 7 bars - Price bar sits within congestion and this high volume day triggers no technical breakout Hidden market “hotspots” trigger Silent Alarms. These rare zones reflect intense crossroads of buying and selling pressure. Emotional trading swells volume but a painful standoff develops between bulls and bears. Price sits still as friction reaches a boiling point. Smart traders recognizing the Alarm will stand aside on these days but take positions in whatever direction price ejects out of that bar's range. Silent Alarms should not occur as a breakout through support or resistance. Price must remain trapped when the dust clears on that bar's activity. Try to verify prior emotional trading at the identical price through investigation of the chart history. Finally, make certain the high volume didn't reflect a pre-scheduled transaction, such as a secondary offering. Alan

To: Ramsey Su who wrote (1742)	7/9/1999 9:50:00 PM
From: -	Respond to of 18137

<3 or 4 times the volume but trades in a very narrow band...?> Ramsey, Usually it means that they've been bought by another company, at close to that price per share. Check the recent news on that stock, at somewhere like bigcharts.com or quote.com. There is usually a little gap between where it trades at, and the final acquisition price - which represents the arbitradge risk (that the deal might fall apart, not get approved, government intervention, etc). If that's not it, then I'm stumped. -Steve

To: Ramsey Su who wrote (1742)	7/9/1999 10:52:00 PM
From: keith massey	Read Replies (1) \| Respond to of 18137

3 or 4 times the volume but trades in a very narrow band...? First make sure the large volume isn't just a couple of large crosses and that the buying and selling is coming from several places. Crosses are a different story and have been covered on this thread already. Second... Steve already mentioned this one....check to make sure a buyout hasn't been done. If 1 and 2 are not true than...... High volume in a narrow range normally means one of two things in my opinion...accumulation or distribution. If you can figure out if the "smart money" is accumulating a position from the public or the "smart money" is distributing a position to the public during this period than you are a genius. I always wait for the market to break in one direction which tells me what was happening during that period and than I take my position. The trend leading up to this small body day will often give you a clue what is happening but until you get confirmation you can never be sure. Best Regards KEITH