The bears den

[Mecisteus]

S&P500 is +0.7%
MY IB is +1.4%

No chance to add since Dec.

 

[DukeCS33]

Can see whether the move is real or not.

VSA depends on volume and price interaction. It is hard to apply the techniques to intraday trading as one needs to look at seasonality.... eg lack of demand or supply may magnifest during lunch time as many traders are out for lunch... so its relatively hard to decipher the state of the market then. VSA does not predict but it gives a snap shot of the relative demand and supply conditions prevailing at time of reading.

 

[Trader11]

VSA depends on volume and price interaction. It is hard to apply the techniques to intraday trading as one needs to look at seasonality.... eg lack of demand or supply may magnifest during lunch time as many traders are out for lunch... so its relatively hard to decipher the state of the market then. VSA does not predict but it gives a snap shot of the relative demand and supply conditions prevailing at time of reading.

Any interesting example that I can look? I thought volume and price action must match? If not the move is likely to be fake?

 

[MrHighlander]

Can’t believe stock market is rising

Clutching desperately at whiff of good news

 

[theMKR]

Can’t believe stock market is rising

Clutching desperately at whiff of good news

Even TSLA went to green, albeit for a short moment after losing like 8dollar in premarket.

i knew MS would jinx it

 

[theMKR]

I predict a good fall in the next 5mins. Time to short then slp

 

[DukeCS33]

Any interesting example that I can look? I thought volume and price action must match? If not the move is likely to be fake?

One can have a green bar with low volume. The move is as real as it gets. The interpretation depends on the background and context. Eg a long green bar in the form of a bullish engulfing right at bottom or one just after a key reversal may tell me that the supply is spent and the market is ready to rise up as demand is over powering a spent up supply. This may be a strong sign of strength to me.

Conversely, a long green bar with low volume at the bottom when there is supply in background and there has been no successful supply test tells me that the sellers may have temporarily withdrawn but may emerge later... Maybe there was a bullish piece of news so they decided not to participate.
This is all relative and one needs to look at context which makes it so difficult to code.

 

[Trader11]

One can have a green bar with low volume. The move is as real as it gets. The interpretation depends on the background and context. Eg a long green bar in the form of a bullish engulfing right at bottom or one just after a key reversal may tell me that the supply is spent and the market is ready to rise up as demand is over powering a spent up supply. This may be a strong sign of strength to me.

Conversely, a long green bar with low volume at the bottom when there is supply in background and there has been no successful supply test tells me that the sellers may have temporarily withdrawn but may emerge later... Maybe there was a bullish piece of news so they decided not to participate.
This is all relative and one needs to look at context which makes it so difficult to code.

How does one know where is the top and bottom? Using support and resistance?

 

[DukeCS33]

A temporary easing of curbs on Huawei for 90 days to prevent disruptions for US customers was taken in a positive light and seen as hope or a precursor that Trump may do a u turn. That was enough cause for equity markets to rally? I just think that things are not that simple but it appears that the Market has some buying power from liquidity sitting on the sidelines. This may be put into action if we see lack of bearish news and as the SP index moves away from the current pivot point around 2860 which was the last resistance from March high.
From a VSA perspective, I think last night's rally lack professional participation and so, I still think its going to be a case of sideways trading. I would like to see a retest of the upside at 2890 and that's where we may get some inkling if the Supply that drove Markets lower may still be present.

I am now looking to take profit on my only Long from last week in SYMC. It nudged higher even though the Main equity indices were being sold off and validated my views based on pure VSA interpretation. I seldom trade against the Index's direction as stats show that some 70% of stocks would follow the lead from the main index... that ratio increases when the index plunges.


Oh... I want to add somethingelse: Weekly charts in the indices do not show a bear market at all... so far I interpret it as a small bearish impulse being blocked by bulls.... there is still indecision on the overall direction at this point in time. Supply has come in but it is still met with Demand in good measure. So no clear signals for the bears as far as I am concerned. And with the Moving averages sloping upwards, it is still a bull trend overall. Bears, please temper your expectations. We have at best a bearish impulse and at best a short term correction. From a fundamental read of macro, I am bearish. From a technical analysis point of view, I have no reasons to be bearish yet but I acknowledge that there may be a change of behaviour towards the bearish side but not sure if it is enough to tip the scales.

 

[DukeCS33]

How does one know where is the top and bottom? Using support and resistance?

Based on trendlines, support and resistance lines, dynamic support / resistance from moving averages, fibo levels, or in the absence of all those, interpretation of candlestick reversal patterns. There is no absolute in technical analysis and that's why it is very much an art as it is a science. Practise and remember past examples... guess that's where experience comes into play as well in interpreting.

 

[edwardZ]

How does one know where is the top and bottom? Using support and resistance?

if you happen to know where the money bulk is sitting on whichever price number, then that is the top/bottom thus only market markers will know and set the next strong level (support/resistance) on their terms

else, the next best way is to look at where price is within the current trend and observe the price action at the key support/resistance of each trend, usually market makers will show their hand abit by printing the candles in those morningevening stars, bullishbearish engulfing, M W reversals etc and the Speed of candle movements etc

 

[churnmaster]

I think I qualify to be in this thread.

Has been expecting the market to turn full bear mode soon in the next 6 to 12 months. Not because I did any sort of extensive researches but merely observing the quality of the IPOs recently. Loss making companies (e.g Lyft, Uber, Fiverr, Pinterest) rushing to get themselves listed seems like a red alert to me.

And the best one being Softbank's Vision fund which invested in many of these cashburners, planning for its own IPO, before its too late to take the money out of this market.

 

[theMKR]

And the best one being Softbank's Vision fund which invested in many of these cashburners, planning for its own IPO, before its too late to take the money out of this market.

the market too rich already, they willing to pump every IPO regardless.

 

[Trader11]

the market too rich already, they willing to pump every IPO regardless.

BOJ is behind their back

 

[theMKR]

shorting MU today!!

 

[churnmaster]

A temporary easing of curbs on Huawei for 90 days to prevent disruptions for US customers was taken in a positive light and seen as hope or a precursor that Trump may do a u turn. That was enough cause for equity markets to rally? I just think that things are not that simple but it appears that the Market has some buying power from liquidity sitting on the sidelines. This may be put into action if we see lack of bearish news and as the SP index moves away from the current pivot point around 2860 which was the last resistance from March high.
From a VSA perspective, I think last night's rally lack professional participation and so, I still think its going to be a case of sideways trading. I would like to see a retest of the upside at 2890 and that's where we may get some inkling if the Supply that drove Markets lower may still be present.

I am now looking to take profit on my only Long from last week in SYMC. It nudged higher even though the Main equity indices were being sold off and validated my views based on pure VSA interpretation. I seldom trade against the Index's direction as stats show that some 70% of stocks would follow the lead from the main index... that ratio increases when the index plunges.


Oh... I want to add somethingelse: Weekly charts in the indices do not show a bear market at all... so far I interpret it as a small bearish impulse being blocked by bulls.... there is still indecision on the overall direction at this point in time. Supply has come in but it is still met with Demand in good measure. So no clear signals for the bears as far as I am concerned. And with the Moving averages sloping upwards, it is still a bull trend overall. Bears, please temper your expectations. We have at best a bearish impulse and at best a short term correction. From a fundamental read of macro, I am bearish. From a technical analysis point of view, I have no reasons to be bearish yet but I acknowledge that there may be a change of behaviour towards the bearish side but not sure if it is enough to tip the scales.

Very well said. This is mostly the case, with both fundamentals and technicals pointing in different directions. This is what makes trading more challenging. When both are aligned its much easier to trade.

The beauty of technical analysis, is its ability to tell you WHEN is a good time to express your fundamental view.

 

[peipei1]

Anyone sensing trade war is going to get much worse before it gets better? China already taking a less polite stance. US has nowhere else to go except negotiate a lower term. I read the old TPP was written up to protect IP across the globe. Trump had rip that out and start his silly trade war, at first it was about the deficit before it becomes IP protection, goes to show his administration is not really prepared for it.

Last night price never really moved, lucky never initiate scalp. Still holding warchest, no DCA until things are clearer.

 

[DukeCS33]

Anyone sensing trade war is going to get much worse before it gets better? China already taking a less polite stance. US has nowhere else to go except negotiate a lower term. I read the old TPP was written up to protect IP across the globe. Trump had rip that out and start his silly trade war, at first it was about the deficit before it becomes IP protection, goes to show his administration is not really prepared for it.

Last night price never really moved, lucky never initiate scalp. Still holding warchest, no DCA until things are clearer.

It is never about a promise to protect IP. It is about enforcement. The Europeans are also complaining of forced technology transfer in exchange for market access.… thee can be 1001 agreements but without a mechanism to enforce with penalties, the agreement would be useless.

The trade war can continue in its current state until one party blinks. Trump fired and the Chinese has yet to react. It is unlikely that the Chinese let this slide - in any case, we shall know when the increased tariffs hit or when the temporary curbs on Huawei expires or the Chinese may well respond before that.

 

[DukeCS33]

I came across this only today and its too late to chase this trade... but I thought it may be an interesting demonstration of VSA analysis for this stock : CTSH

You need to refer to your Chart with candle and volume shown. I have provided my interpretation of VSA analysis based on the candles on each date:

3 May: Ultra high volume sell off aka selling climax. The close off its low and high volume suggests hidden buying in the background. To most, they may just look at it as a bearish candle

6 May : Sign of buying but we know that there is still supply in the background especially right after a sell off

7 May : Prices marked down and there was a slight increased in volume (potential sign of supply still there in the background)

8 May to 10 May : buyers are battling out and absorbing supply -interesting change with buyers showing up now and trying to push prices higher without succeeding for 3 days

13 May : A last shakeout of weak hands as stops placed by weak buyers below recent lows get taken out

14 May : lower volume bullish bar suggest that supply may have been spent.

15 May onwards: Market just took off as Buyers dominated the sellers. The above average volume and white candles just show that demand is there. Notice the overlap where open was lower than the prior close - in a way its just trying to ascertain if there may be fresh supply coming in. Also recall that the S&P sold off between 16 to 20 May so it makes the climb up even more spectacular.

Potential long entry point may be considered after shakeout bar on 14 or 15 May. If I traded this, I would be watchful for any reversal - A stock that has declined so much on heavy supply would have overhang of sellers on top... so need to maintain discipline to take profits and not think that the stock will fly forever.

To the uninitiated, my explanation may not make sense to you but these are techniques that I have been applying to my trading. All my countertrend trades where I pick bottoms were analysed via VSA and so far I have hit a 80% win rate on a risk reward ratio of 1:2

If you would like to learn more about VSA, please google and read up on Wcykoff and Tom Williams work.

 

[theMKR]

actually CTSH has been on my target to short.

but i am out of funds, so its still TSLA top choice. yesterday lost a bit due to forced sell at end of trading hours

i am camping to short MU now. cant freaking sell away at the price i want

XLXN and VMWare is another one in my immediate watch today