Discussion in 'Technical Analysis' started by hcour, Feb 20, 2006.

  1. hcour

    hcour Guest

    Mar Yen w/total vol and OI:

    From Sept - Dec there is a strong tight consistent downtrending channel; note how nicely the supply line and the dt'ing 20d ema converge here as well as the higher down vol vs up vol overall and the OI climbing steadily. 12/01 and 12/02 (circled) there is the highest vol in the dt, that second day closing near the high, then the next 3 down days go sideways on extremely narrow spreads and some of the lowest vol of the dt as price is at previous long-term significant support going back to most of 2003 at .83ish.

    Heavy vol starts to come in 12/08 & 12/12 on good spreads up closing near their highs, then 12/14 EOM (ease of movement) on massive vol and the widest spread on the chart closing on the high back to previous resistance. Automatic Rally or Sign of Strength? Covering from those old shorts? The subsequent reaction is positive, shallow on low vol and there follows a good rally 1/03 to 1/06 on good spreads & closes & vol, but there is no follow-thru. The next 5 bars make absolutely no price progess on narrow spreads and mostly poor closes. 1/17 drops back shallow into the trading-range where it sits on the now flat and converged 20d & 50d ema's on decent down vol. The subsequent rally last only one bar 1/23 and is a shallow test of what has now become an upthrust. The subsequent reaction is sharp on relatively good spreads closing on their lows that wipes out the 12/14 EOM bar, the ma's crossover and OI increases significantly, vol contracts somewhat.

    On the present consolidation OI has flattened. 2/10 a wide spread up on the strongest vol in 2 months, closing below mid-range on a dip in OI, then 2/15 closing on the low, upthrusting on strong down vol and a bulge in OI, those 4 days following 2/10 doing nothing. 2/17 price starting to look like it may be at an apex just below the center of the trading-range and the flat converged short-term ma's. All this suggest to me that volatility is contracting and supply is in control - at the moment, as always. A break/test of the Dec lows would be most significant.