Quite a move up today with volume decreasing.
Declining volume indicates lack of interest. There are just no two ways about it. If this index/ETF were in a triangle or a bull flag, you may expect this. But it is not. Maybe a bear flag forming but remains to be seen
I am not saying this volume is astoundingly low. It just does not look like Volume matches Price movement.
That can be a problem. That can be a Bear Bounce or outside sources injecting money in to the market to scalp retail investors. But who knows? Not me )o:
There are many reasons why but injected printed dollars to prop up the market temporarily is only one of the possible reasons. Shorts covering could be another since maybe the shorties think we are headed for new highs in every index so they are covering their shorts before the market hits all time highs?? That could be another reason. I just somehow doubt it.
Folks who go short successfully are experienced traders and my hat is off to them!!!!
Price should match volume to a certain degree, or at least be in the same ballpark. Computer generated algo-rhythms that hedge funds use can kick in and trap retail investors.
Sometimes, well often:
When the stock is moving up and volume is falling then it indicates the interest of the buyers has reduced in the stock and the uptrend is going to reverse.
Similarly, when the stock is moving down and volume is falling then it indicates the interest of the sellers have reduced in the stock and the downtrend is going to reverse.
Sometimes Price and volume can be the most important indicators.
I will watch for now. No recommendation.
Be safe/Laura/The market is full of uncertainties and what was that saying about "do not get your panties in a wad" I apologize for my "vulgar" language but it is the truth as I see it (o"
Declining volume indicates lack of interest. There are just no two ways about it. If this index/ETF were in a triangle or a bull flag, you may expect this. But it is not. Maybe a bear flag forming but remains to be seen
I am not saying this volume is astoundingly low. It just does not look like Volume matches Price movement.
That can be a problem. That can be a Bear Bounce or outside sources injecting money in to the market to scalp retail investors. But who knows? Not me )o:
There are many reasons why but injected printed dollars to prop up the market temporarily is only one of the possible reasons. Shorts covering could be another since maybe the shorties think we are headed for new highs in every index so they are covering their shorts before the market hits all time highs?? That could be another reason. I just somehow doubt it.
Folks who go short successfully are experienced traders and my hat is off to them!!!!
Price should match volume to a certain degree, or at least be in the same ballpark. Computer generated algo-rhythms that hedge funds use can kick in and trap retail investors.
Sometimes, well often:
When the stock is moving up and volume is falling then it indicates the interest of the buyers has reduced in the stock and the uptrend is going to reverse.
Similarly, when the stock is moving down and volume is falling then it indicates the interest of the sellers have reduced in the stock and the downtrend is going to reverse.
Sometimes Price and volume can be the most important indicators.
I will watch for now. No recommendation.
Be safe/Laura/The market is full of uncertainties and what was that saying about "do not get your panties in a wad" I apologize for my "vulgar" language but it is the truth as I see it (o"
Comment:
R written in orange on chart = Resistance/Sorry for not being clear
Comment:
There is also a Bearish Harami Cross that formed the two days before the move up.
A Harami Cross can be bullish or bearish. It is different from the Harami which is also a 2 candle pattern. The Harami Cross is known to be more powerful than the Harami and consists of 2 candles of opposite color with the second candle being a Doji. It should make you scratch your head and say "wow" when price breaks up from this candle pattern. This pattern does need confirmation with a 3rd bearish candle to the downside (which did not happen in this case) and would then be called 3 inside down. The opposite is true of a Bullish Harami pattern.
A Harami Cross can be bullish or bearish. It is different from the Harami which is also a 2 candle pattern. The Harami Cross is known to be more powerful than the Harami and consists of 2 candles of opposite color with the second candle being a Doji. It should make you scratch your head and say "wow" when price breaks up from this candle pattern. This pattern does need confirmation with a 3rd bearish candle to the downside (which did not happen in this case) and would then be called 3 inside down. The opposite is true of a Bullish Harami pattern.