Apr 152010

Here is a snap of all the traded volume in late 9/08, which was the last time we saw the current prices. The rejection & acceptance areas are harder to pinpoint because the market moved fast in the overnight sessions and grinded through the days. Anyway, my drawn lines are gut instinct as to which prices are most important given the multi-day picture. Rejection in red, acceptance in green. Yesterday, notice the fast rip up can be seen with the virtually zero traded volume between the 1 and 5 handles from back in 2008. If the market does what it almost always we think the next rotation up will play up like this as evidenced by the lines drawn on the sheet:

-We will likely grind a bit slower from 5 to around 7.5 or 8

-We will likely see another fast rip up from 7.5 or 8 to 12

-We will likely grind REALLY slow from 12 to 18

Volume is king. As you know we use nothing else to make price decisions. It never lies and is not market specific. Futures, options, equities, fixed income, real estate, Coca-Cola, bubble gum – all the same. Rejection of previously unfair value on the first retest, acceptance of fair value. Always and forever. Common sense…

 Posted by at 7:46 am

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