Good questions:
Selling climax is significantly more bullish than stopping volume. On a 5m chart it can be difficult to distinguish the two:
Stopping volume halts price, the close can be on the lows, middle, and the volume very high
Selling climax, highest volume on the chart, close should be on/or near the highs, we must come from a downtrend
Buying climax is used in the process of distribution
The change of behaviour MUST be used in context. Look deep into the nature of wave C, it has achieved a great deal. The total volume was 153k contracts, more than the previous down wave (147k), suggesting that indeed demand is in this market in a big way. We rally back over yesterdays low (extremely bullish) and back into the trend channel (bullish) If the market was weak and supply in control, this should never happen.
More importantly when we combine both the 5m and tick chart we know that we have a potential selling climax (extremely bullish) As we react to D we have a smaller down wave, with a spring at a confluence area (demand line from the channel and support). Via the 5m we spring - followed by 2 lovely little test bars. Combining all this info the market is telling us that supply is spent for the time being. As wave F prints with no supply we know for sure that supply has dried up. Thinking logically the large wave down has exhausted all the sellers as we have become way oversold
I understand your thinking about the testing at 2421, I too was looking for a short play BUT with all that volume behind us (demand) and what the wave achieves it simply negates the idea of a short position. We would like to see a weak rally with low volume, choppy price action, narrow spreads etc we get the exact opposite.
Hope this helps
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