There is an old common belief that “volume at the bottom washes off sellers” – that might be true, but just as equally it exhausts buyers and nothing will prevent price from declining further (as much as from reversing and rising). The same true in reverse as applicable to the tops. Anyways, volume has never been a huge part of my analysis and, especially last few years with all HFT, dark pools, mutual funds “pre-set” exchanges – I am just getting irritated trying to make any sense of volume patters.
Why I brought volume up than? Two reasons
First – I’d like to “re-introduce” “DefenderYou” (we know each other for a long long time, through the good and bad times) – when he says something (not about day trades, but about larger/longer picture) – traders better listen – he is representative of “Big Boys Mentality”. Shall DefenderYou decide to “re-introduce” himself to TTW gang as he did at ES – it will be great. (From myself I have to say he is slightly more of a “buy side” trader – do we have some bias here? :) I recall way back we were joking that if DY would just buy FLTW with all the margin – there would be no need to trade ever again. and I was joking that is I just held those puts long enough… Bulls have plans, bears have plans…:)
Secondly, yesterday’s “volume discussion” was about “volume distribution throughout the day” rather than “as as a unit. I’d like to repost one of the yesterday’s charts and add one new.
11/06/2009
Futures approx. BO
Daily Range Projection
Low
High
/ES
1051
1076
SPX
1056.97
1076.32
/NQ
1695
1745.25
NDX
1709.52
1734.51
Pretty Picture For Common Sense Impaired
