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Strategies & Market Trends : Playing the QQQQ with Terry and friends. -- Ignore unavailable to you. Want to Upgrade?

To: J.K. who wrote (1023)	6/25/2005 5:28:28 PM
From: Walkingshadow	Respond to of 4814

Hi JK, I don't buy the Russell 2000 explanation at all. The reshuffling of the index is an annual event, and no surprise to anybody. Everybody knows there is some portfolio adjustment that occurs around this time, but it is not the kind of thing that would cause a sudden surge of volume IMHO. I think Thursday's huge spike (the second one) was the dominant volume event of the week, and was composed of two things: a short program that had kicked in earlier in the day covering, and big-time buying. The volume I am talking about was on the underlying, not so much on QQQQ. Friday's spike was predominantly buying----remember, professionals buy into weakness, and Friday that's all there was wherever you looked----two consecutive triple-digit Dow losses, and 11 consecutive sessions that saw QQQQ and $NDX close below their 20 sma. Again, I will have a close look next week, but I anticipate covering my short position sometime during the week. We'll see... T

To: J.K. who wrote (1023)	6/25/2005 5:37:14 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

This is pretty classic, by the way.... 139.142.147.22 Notice how the first volume spike is on a bearish looking candle, then as bullish candles appear, volume just evaporates. Typically, you like to see a reversal candle, a Doji or something as the big volume candle, but the key thing is not just the sudden volume surge after a sharp or steady decline, but the equally sudden disappearance of volume. The disappearing volume allows the ask to be walked up more easily. This is difficult to do if there are big lots competing with your ask. (As an aside, I have occasionally successfully traded things just on volume alone, if the signal is a very strong one. And I rarely ignore volume, it almost always supplies useful information IMHO.) T