Sunday, October 3, 2010

Answers for James

1. I use and they do not show intraday volume for RUA or SPX. So I use corresponding ETF for volume study of my own - IWV and SPY. Am I making mistake by doing this? 

James, if you use MV charts, you don't need to use the stockcharts one. If you dont want to use MV volume data then you make a correct and logical study. However, I recommend to use MV volume data and indicators. IF you use MV data and indicators, then NEVER follow the lover volume derivative instruments. ETFs are driven by indexes. I make daytrade on e-minis and use SPX for those. E-minis have influence on SPX if volume constellation on SPX is ready to absorb that.

2. BUT if I look at daily chart, I get more worrisome signs. Using same (8,16) and (6.2) setting, the 3 month chart shows blue cycle being close to over!

Larger period needs shorter indicator setups. Setups also change by index a little.
Please find correct setup for histo and oscillator for 60-min and 1-day RUA below:

RUA 1-day:

RUA 60-min:

There is no 3-months chart, I suppose you are talking about the histogram and oscillator of RUA on 1-day chart. First of all, please change the setup of your indicators according to mine.
You are right, 1-day RUA histogram shows negative number again, but oscillator is a little above of the critical level of 33%.

I can see more indicators than silver subscribers and they tell me situation is close to critical, but volume momentum is RISING, also sentiment is advancing and what is the most important selling volume is still at zero level.
Also your drill down technique needs change. First is checking 2-days chart, that is the major trend, then 1 day, then 60 mins.

Please find RUA 1-day with all indicators:

First we need to check whether selling volume is zero. If not, then it requires immediate action. This need to be checked after the second hour of the day and later every second hour. Decision should be made in last hours only based on 1day chart. If selling volume is still not zero then it's a clear signal for liquidation. Sentiment is rising, and it suggests further bull impulse.Then sentiment needs to be checked. Reading of this indicator is above 46 is o.k.  Now it's rising. Now we check oscillator and the last we check is histogram.

After 1-day let's see 60 min:

As you can see, there is a bearish attack started at 10:30 a.m. Sep 30. MVO suggested a major price fall, but an invisible hand started a contra-attack next morning and did not let prices to fall sharp. This can be read fro the selling & buying volume indicator. The power of the bull/bear cycle can be measured by reading histo. As you can see the bear attack has been eliminated for a.m. 11:30 1-oct. For all the fight SBV oscillator gives neutral signals, does no help too much. Finally AD sentiment became bullish, slowly giving signal above 50. We can count with a nice bull monday. Also please observe the rising bullish momentum. While momentum is bullish (green) we can order much larger chance for bull price change than to bearish change.
I feel market makers pushed a huge buy volume in the last 2 trading days resulted minimal price rise, so now tension is big and price manifestation is imminent.

Your first volume TA was pretty good I feel!

Jag: 3. What parameters do you use for the smaller timeframes and on the daily?

Smaller timeframes need longer periods.
I give RUA:
30 min histo: 20,40
30 min oscillator:16,4
15 min histo: 22,7
15 min oscillator: 22,2
1 min histo: 13,41

1 min oscillator: 70,3

Please be careful with short-period decisions. Daytrading needs excellent understanding of related risks and needs experience.

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