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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: TA2K who wrote (9540)	2/24/1999 4:39:00 PM
From: bdog	Read Replies (1) \| Respond to of 12039

Nicholas, yes, always, always look at volume. bdog

To: TA2K who wrote (9540)	2/24/1999 4:42:00 PM
From: Allan Harris	Read Replies (1) \| Respond to of 12039

Doing the latter is like a boxer entering the ring figuring he can do okay just using one hand to fight. Price pattern = powerful right cross Volume pattern = limp left wrist keeps getting in the way A

To: TA2K who wrote (9540)	2/24/1999 4:43:00 PM
From: David R. Evans	Respond to of 12039

I look at price..... I use a volume calc. in DNS but it is one of eight indicators contained in the system. In most cases, I only care about price.... On the other hand, I will not buy a stock that has low volume because that leads to high differences between bid and ask..... I want to make sure I can get out of a stock at the price quoted and to do that there must be volume.... Dave Evans

To: TA2K who wrote (9540)	2/24/1999 5:33:00 PM
From: CatLady	Respond to of 12039

Yes, volume is important, but I'd stop short of saying "enormously superior" So far, I'll say that I've found volume to be of more direct use in short time frames rather than longer time frames. That's just what I've seen so far, it may not be a truism.

To: TA2K who wrote (9540)	2/24/1999 7:01:00 PM
From: Craig DeHaan	Read Replies (1) \| Respond to of 12039

Nick* I like Allan's concise analogy. Here's another (slighly less so): Stocks travel routes measured in both direction and topography; volume is one (major) source of fuel to arrive at the next destination. Repetitive price patterns, indicators and systems, etc. provide good directional road maps of probabilities of space, but can't fully assess ETAs - the time predictive. Volume influences usually become contagious, accelerating movements otherwise changed only by natural market entropy (balance: buyers = sellers). At these contraction point junctures you especially need to monitor vol for subtle changes that hint of the next direction taken. What starts as a gentle roll from a price pivot recently stalled can quickly gain speed careening either back into a valley recently passed or flying over the horizon effortlessly to a new summit. For me volume is one of the clearest examples of greed/fear psychology at work that can be measured by a chart. C

To: TA2K who wrote (9540)	2/24/1999 10:42:00 PM
From: Robert Graham	Respond to of 12039

Yes, volume can fill in part of the picture that price cannot by itself. Still, the price can tell much of the picture to those who know how to read the chart. For many chart readers this is enough of the picture to base a decision on. Volume analysis can be utilized in different ways. Some technicians include evaluating breakouts by looking at volume during the breakout. Others use it to evaluate the significance of a support or resistance, and even estimate how long price will take to break through a S&R. Still others use it in terms of a mathematical calculation like a volume turnover calculation to increase the likelihood of selecting a candidate that will have a good move up on a breakout or news event. Another type of mathematical treatment of volume is in a calculation of OBV which can help determine the likelihood of a turnaround by the price indicative by a divergence of the indicator. Here are some of my thoughts on volume: The classical treatment of volume specifies that the volume should increase in the direction of the trend, and decrease counter to the trend, otherwise a trend is not being validated by volume and a trend reversal is possible. This rule is a broad sense has truth to it. But in actual use, this treatment of volume can at times mislead the chartist. For instance, on an exhaustion move that finishes off a leg of an uptrend, this approach to volume analysis would indicate a continuation instead of the termination of that leg of the trend. I think a more accurate treatment of volume would be to observe that changes in volume has relevance at particular places on the chart. Volume tends to be a confirming indicator of price action, if it means anything at all. There are times that volume can provide an important clue as to what is behind the current price action of the stock. IMO most of the time volume is meaningless. If it is ignored, nothing will be taken away from the analysis of the chart. What I think is important to understand for a chartist is to interpret volume in relationship to the current price action of the stock, and also in terms of its current setting. An increase in volume should relate in price action to a larger movement in the price of the stock. Some settings are more meaningful than others. For example, a volume increase on a setting such as a breakout from a congestion is a positive sign. But I would be more interested in what volume does on an initial pullback to support and follow through from the breakout. If the volume remained the same or decreased on pullback and then moved forward accompanied by greater volume, this would be a good sign to me. However if the initial volume increase is disproportionate compared to the price movement of the stock at the time of the breakout, I would then begin to suspect the breakout. But note that the volume not increasing at the time of the breakout does not negate the breakout as a possible trade. For instance, the volume can have a delayed presence and increase one or more days after the breakout occurred. Its presence at the time of breakout can be considered a positive as a confirming indicator. But its absence is not necessarly a negative in invalidating the breakout. Once the breakout has developed into a trend, volume in most cases would not be important to me. I hope this helps. All comments welcome. Bob Graham

To: TA2K who wrote (9540)	2/25/1999 12:37:00 AM
From: Vitas	Respond to of 12039

Nicholas, here is one current example of the use of volume. In this chart of LU, you can see a rally that developed over the last week. If you draw a down trendline on the two high volume peaks, and extend to now, you will see that the current volume stayed under the trendline as the stock rallied. The fact that LU did not have a volume day that was able to punch through that down trendline in volume was a bit of a hint that the rally was not that big of a deal. iqc.com Vitas

To: TA2K who wrote (9540)	2/25/1999 2:08:00 AM
From: Lawrence Burg	Respond to of 12039

Don't know what to add, after reading the responses :o) Lots of good insight from all. I've never really made an effort to trend volume, though I might try it a little, the LU example is compelling. It comes in very useful for established, broad base securities, with consistent volumes. I'm still messin' below the mid-cap level so it's less useful. I do use price trendlines extensively now. They add insight to a stocks behavior beyond that provided by DMAs & EMAs. I'd consider price trends valuable both long term & short term. When the action starts to approach a support or resistance however, I rely on the volume to validate any move. That gets into many of the behaviors discussed the other responses to your post. So, for me, price trends provide me the tip off. I use volumes to confirm or deny.

To: TA2K who wrote (9540)	2/26/1999 4:25:00 PM
From: Bonnie Bear	Respond to of 12039

Yes... I follow CEFs and smallcaps...in the thinly-traded stuff, it's hard for a big player to get enough shares to make them worthwhile...so I see a big volume spike on a stock that's recently beat to s**t or on a stock that's been going in a narrow trading range before it starts a move up. And the bid-ask narrows,,,when nobody wants the stock they ream the people trying to get out, the bid-ask seems to narrow when there are buyers. I can't do this on momentum stocks, somebody else can comment on them.

To: TA2K who wrote (9540)	2/27/1999 3:54:00 AM
From: bdog	Read Replies (2) \| Respond to of 12039

Nico... try these Estes Volume formulas for weekend exercise... Estes Volume: mp1:=Input("Volume EMA",1,377,180); V/(Mov(V,mp1,E)) this one shows todays volume as a multiple of it's X EMA, ie, a value of 2 means it traded 2 times it's 180 EMA put a line at .33 for buys and a line at 2 for sells put in horizontal lines at the 2 week max highs and lows Here is another but requires the float of each individual issue Estes Real Volume: mp1:=Input("Days Volume Summed",1,377,30); mf1:=Input("Float, in X million",.1,10000,10); mf2:=mf11000000; (Sum(V,mp1)/mf2)100; this one shows the sum of X days volume as a percentage of the float, ie a value of 2 would be 2% of the float was traded in the last 30 days... enter 1,000,000 float as 1, if you put in 1 for volume summed then you will see the % of float traded each day... then mess around with the parameters and see what happens nothing like a picture, hope I did the math right... bdog