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Old 18-04-2009, 04:20 AM
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Default Rumination on VSA

I am starting this thread to share some observations, thoughts and ideas on VSA. We will not cover the basics as they are already available on TJ. Also I have been messing Kiran’s nice thread on Wycoff with some charts and comments on VSA. So with this thread I am free to create my own mess… Everybody is invited to add to the mess…

Ah...my first thread in this forum....
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Old 18-04-2009, 04:55 AM
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I was browsing one of the financial web sites.. “ Mkts end marginally higher led by banks, capital goods…” Screamed the headline… A friend who calls up regularly to seek my opinion on the market rang me up. He said “Good the market is up… we are still bullish, great’..
Actually when you look at what actually happened in the market today with a VSA perspective a different story is presented. On EOD chart today’s NIFTY bar is a perfect Upthrust bar. The day opened and the nifty was marked up almost 120 points and during the later part of the day brought down to near days low. The drop after 2.30 was quite sure and that would have trapped many at higher levels. Of course the volume was not as high as the last few days. But the volume is high enough to qualify for an Upthrust bar. My chart does not show it as a upthrust …. The problems with software and coding . Very nice move by the smart money..
As I said earlier somewhere… the yellow lights on on…




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Old 18-04-2009, 05:09 AM
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Thanks for starting this thread, Karthik all guys knew you are the most sought after man when it comes to volume.Should we discuss market delta and related charts for discussing price and volume relation? as jesse sir advised me 'the best way to learn market delta, apply basic wyckoff and vsa principles'
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Old 18-04-2009, 08:53 AM
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kartik...some doubts.
1. how to spot professional accumulation & distribution as it is happening & not after the fact,,,still finding it difficult to understand.
2.reaction of price at support/resistance trend lines in a rangebound market.
3.how do u manage to get tht transparent cloud on ur volume histogram..i still cant do it even after u hav told me in TJ...can u help pls.
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Old 18-04-2009, 10:19 AM
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Why the emphasis on high volume upthrust? low volume Upthrusts are fairly common.
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Old 18-04-2009, 10:34 AM
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But would you attach some significance to this upthrust? Vsa says upthrusts are important when there is an area of weakness to the left and here there is strength in the background. Therefore, in my opinion trend is up and strong and this UT bar can be ignored unless other signs of weakness emerge.
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Old 18-04-2009, 12:25 PM
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Originally Posted by Vinay View Post
Why the emphasis on high volume upthrust? low volume Upthrusts are fairly common.

Hi Vinay,

True, low volume upthrust are common. I call them Psuedo upthrust. But of course high volume upthrusts are more significant.

regards
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Old 18-04-2009, 12:45 PM
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Originally Posted by Vinay View Post
But would you attach some significance to this upthrust? Vsa says upthrusts are important when there is an area of weakness to the left and here there is strength in the background. Therefore, in my opinion trend is up and strong and this UT bar can be ignored unless other signs of weakness emerge.

Thanks vinay for binging this up.

Let us look at the last five bars on a EOD basis. We can see some distribution in the first two bars. Then the third bar was good bullish bar with high volume. Then was totally negated on the fourth bar with a bearish bar with equally good volume. the last one was again an upthrust bar on lower volumes. Then can we still confidently say that we have strength in the background? dont we see weakness creeping in? that is why i said that "Yellow" lights are on..It is still not "Red".

When you brought this up another thought came up in my mind. Most of the times our perception of the current situation both economical and political and other situation which affect the market does tend to cloud our empirical analysis. Maybe my apprehensions about the next government and lack of any good news on the economical front and my expectation that the smart money would conclude their current cycle by the time of election results does make me give more importance to the pseudo upthrust

Ah...the discussion here is getting lively and i do hope it continues...
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Old 18-04-2009, 01:42 PM
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I analyse it thisway:
1.Test? volume less than previous two bars but spread is not narrow and close low notin the middle or higher end. Following two bars are up.
2,3,4. each bar is having an upclose and volume more than previous two bars(solid greenvol bars). they show strength.
5. downbar closing in the middle volume fairly high.It is not a weak bar.
6. This bar is interesting. NR7 bar. with volume less than previous two bars closing in the middle. It would have triggered weakness if next bar was down closing.
7. Since next bar is very strong bar with ultra high volume. if all is well with volume, spread and close then why next bar is down ?
8. again a ultra high volume bar closeing at the lows and opening at the highs. Is this an upthrust? I like to see an upthrust with up close than previous bar than a down close.
Threre is no weakness in the background because we are in the high ground with no resistance to left. So what is this bar. To me this is a Two bar reversal with a potential weakness to follow not an end of rising market reversal.
9. this is a low volume upthrust. with a close higher than previous bar. If monday is down close this will also qualify it as a no demand bar. if it happens so one can think of shorting but I would not short this market. I will simply watch and stand aside.

I have a different take on News events influencing markets because my elliottician brain comes to play games with me when events unfold


Last edited by Vinay; 18-04-2009 at 01:53 PM.
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Old 18-04-2009, 03:54 PM
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Vinay

Nice Analysis. It is obvious that you have done your homework on VSA.

I am also not saying that the market is ready for shorting. Just the time to be cautious... the "Yellow Light"... Just raising the
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