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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: J.K. who wrote (7159)	3/30/2005 12:03:04 PM
From: Gersh Avery	Respond to of 8752

sorry JK .. I don't have a source for that ..

To: J.K. who wrote (7159)	3/30/2005 12:08:04 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

Hi JK, That's a very good question. I don't really have a good feel for that, except in certain stocks I am trading. QQQQ trades an average of about 100 million shares/day, and the general Nasdaq trades about 2 billion shares. The barometer I use is that if QQQQ is trading 50 million shares by 11 am or so, that's a decent day, since as you know the two big times for volume are the first and last hours of the session. I wish I could be more precise than that, but generally I only notice irregularities in volume if they are very low or very high. In my view, the total volume is not nearly as important as how that volume is distributed. You can have an average volume day, and if it is clustered mostly at the low of the day, that means there is buying pressure, whereas if it is clustered at the peaks, it means just the opposite. OTOH, high volume can similarly be misleading. For example, if the volume is equally distributed between highs and lows, that tends to be a wash, even though the candle on the day may be bullish or bearish. In other words, I think volume patterns help in assessing the significance of candlesticks, and should be considered in deciding how much confidence to place in a particular candlestick or group of candlesticks. The caveat here is that the market frequently does not react immediately to volume patterns or may only react partially, and instead tends to "store" them up for later fuel to drive a rally or selloff. This occurs in all time frames as well, and one of the reasons I am confident QQQQ will soon resume its uptrend is that there has been a large accumulation of volume at lows that the index has not yet reacted to. When it does, the reaction will be sustained. That said, shorter-term volume patterns clearly indicate more downside before that happens. Moreover, volume patterns are fully concordant with a number of other indicators and chart patterns we have posted about repeatedly here, allowing us to place significantly more confidence in the assessments that arise from these indicators. T