Thread: Chart Analysis Using VSA And Wyckoff's Methods

Originally Posted by Placebo

IMO , visually the chart looks bullish since the secondary test is holding but the larger trend is still down and price will need to gather momentum to take out the overhead resistance. But as of now i'd stop being bearish and wait for price interaction with resistance.

Cheers

Yes i would agree, you can see price trying to break higher, i guess we could even see a spring or shakeout

Originally Posted by Grazy81

Hi Placebo

I was just viewing the PDF file and found a great example of where i would have taken a short expecting a reversal.

The bar after bar N to me looks like an upthrust which also reached about 3/4 of the way to the top of the trend channel so to me this looks like weakness but then the next bar shot through the upthrust bar.

In hindsight with the increase of volume on that upthrust bar you could say price was attempting to push higher but was rejected temporarily. Also the one thing that may have put me off of that trade is where my entry position would be as by the time i would have entered on the open of the next bar it would be too low down in the channel

I was just wondering on your view of this.

Grazy

You are missing what was happening overall in the background. A common difficulty when using VSA and Wyckoff is focusing only on the last couple of bars. Not a prudent approach to trading.

In this chart at M, the market is oversold. It has broken down below the demand line, and the bar shows clear buying on good volume. Also, the volume at this point is less than the previous down wave (around G). This indicates that selling has dried up.

There is no way that this is an UT at N! What is it up thrusting? Nada. Also, it has lower volume than the last few bars. Selling isn't strong here.. There is supply or selling on the bar prior to M and we are back into this same area, so it is not a surprise to see a little selling. Note it is unable to draw enough supply to break the low of the previous bar - so selling is weak.

It is the same with the bar after N. Lots of volume (effort), but price basically stays unchanged (no result). With a bullish background, it suggests a move up, which is what happens. This isn't the place to sell, but Buy!

Keep the overall picture in mind. You are committing the bias of 'salience' - ie, putting way too much weight on what seems to jump out at you, without looking deeper into the context of the situation -- it's not a prudent move.

Here is the latest move which we anticipated in a previous post.

We had a nice spring yesterday which just dipped below the recent lows then rebounded and so far a nice reaction to that today.

Happy new year to you all and may your trading be profitable.

Originally Posted by Placebo

The chart looks even more bullish now after the Spring. Price should be able to take out the overhead resistance easily. But if it does not then the spring indicated temporary buying pressure with distribution intent. Price could very well be re-distributed at lower levels and drop significantly. All depends on if the overhead resistance will hold or be taken out.

Cheers

Well price is up at the resistance levels now so it could be an interesting few days on this one

Originally Posted by Placebo

Grazy81

Can you update us with what is currently happening with the asset ?

Cheers

Sorry for the absence things have been hectic at work and i was without my car for best part of last week.

Anyways price fell out of the bottom of the range and has just tried to re enter the bottom of the range. So price will either rebound and drop off or it will re enter the range and form a potential terminal shakeout.

I will try and add a chart in the next day or 2

Grazy

Here is the chart as promised



I have marked up the old range along with the old spring.

As you can see we are in a critical area where price can either be rejected by the old range or continue and the circled area will then form a terminal shakeout, the previous day tried to break through but was rejected but todays has pushed through this point absorbing what ever selling there was yesterday so we shall have an interesting day or two instore.

Any other opinions are welcomed

Grazy

Just a quick update

Price has reached the top of the range so the area circled in the previous chart turned out to be a terminal shakeout it is now a case of whether it is enough to break out of the range to the upside

G