Friday, September 3, 2010

The RIFIN battle

After reading my recent post about the basics of volume based TA please try to analyze the chart below:

As you can see, this battle was enermous.
In phase 1 and 3  following the indicators, especially the selling/buying volume indicator you can see a schoolbook-sample how a bearish cycle looks like.

Now, if you see phase 4 and 5, you will understand me. It's a clar signal, not all the smarts wanted this change. They seemed to agree in a bearish fakeout, but then, some of them made an unfair turn: they started to buy, buy buy and buy and other smarts did not give up their positions for days. The buyer side simply killed them, looser side could not get rid of their short positions.Their losses are huge. Then the fight seems to be won by bulls in phase 5. Trend changed. In next phase (just right to phase5)  you can see a small bearish cycle with a very low efficiency. Remaining smarts made an attempt to drag market, but they could not.
This fight was a total volume over 6.5 bn in few days and we are only talking about RIFIN, a relatively small-volume index. It was an extremely important point to save financials. They have serrious damage and all their indicators heading down. And, as you know, there is no market improvement without banks. RIFIN (high correlation with SPX financials) has been saved.

You can imagine now, how big that battle was and why did I give my respectful congratulations and expressed my thanks.

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