PRS LONG TERM APPLICATION #5 WATERFALL VOLUME WITH PIVO

But before I write this though I want to make this point clear. Volume analysis only works enough to be useful if THE INSTRUMENT YOU ARE LOOKING AT IS RESPONSIBLE FOR ALL VOLUME traded for that instrument. That is to say, most of the time it's really stupid to do. For this reason, when you see me do volume analysis for gold prices, I do it for at least 2 XAUUSD tickers, 1 futures ticker, and an GLD etf ticker. I don't do this bc I like to. I do it bc I have to, bc they sometimes say COMPLETE OPPOSITE THINGS. So I begin this piece with the expectation that the reader understand this. I don't want to have a discussion on dark pools blah blah, just understand that the dogma of volume over price probably died in the 1980s depending who you talk to.

On a second note, PIVO is Pham Infinite Volume Oscillator. It works similarly to volume weighted MACD or Chaikin Oscillator, only instead of using 2 or 3 lines for crossover vs an h-line (zero line or horizontal line), I use about 40-45 divided into 5 or 6 layers that correspond with price layers.

On a third note: above zero is accumulation even if declining. Conversely under zero is distribution even if ascending. This true for all lines and layers involved full stop. With that, I'll take the break for now and come back with more.

Let's start with SP500 futures prior COVID crash between 3250 and 3400.


This is 1 hour bars showing back to back volume water fall. Prices don't need these things to decline. But when they do, especially back back, there are major risks ahead.

Gold in early August:

What I've learned during this test run is short term trades not worth the trouble unless you have an algorithm execute for you while you go drink. That said here again is an example of this use for trades that are 10 days or less.

See whee the price spike in the rectangle at the top. This occurred with 2nd red wave down making a waterfall signal. This is not the same as ES above bc there's no negative count. That said, the gray in price above went flat It's just all around annoying situation. This is why that Monday, I said: SL 2037 and moments later SL 2040.

This is GBP-JPY 8 hour bars. The rectangle highlights the signal of the incoming waterfall. An important part of this is where the blue wave gets rejected at the red wave. This means short term buying is not enough to change the trend of money flow (based on the ratios of waves). When this happens on 8 hour bars or longer time frame bars, it is a very bearish sign. There are so many details of this indicator I won't have time to explain it all. But I will write as much as I can.

What does a real crash look like prior to complete capitulation? It looks like an "underground waterfall in volume" with complete down trend set up in price. Here's oil earlier this year:

What I mean by "underground" is the waterfall look starts under the h-line in negative territory. While price regressions prior to the crash is trying to find the next footing down.