tag:blogger.com,1999:blog-816559531110064247.post1732201699414891269..comments2024-03-08T01:03:44.522-08:00Comments on Humble Student of the Markets: Rally not confirmed by volumeCam Hui, CFAhttp://www.blogger.com/profile/09672203690656029787noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-816559531110064247.post-77212126934705943592011-10-16T08:08:12.039-07:002011-10-16T08:08:12.039-07:00Tiho -
Remember the first rule of technical analy...Tiho -<br /><br />Remember the first rule of technical analysis: Volume precedes price.Cam Hui, CFAhttps://www.blogger.com/profile/09672203690656029787noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-43983842323420419932011-10-15T18:35:42.531-07:002011-10-15T18:35:42.531-07:00I have to admit, your volume thesis written here m...I have to admit, your volume thesis written here makes absolutely no sense. I think you are teaching people wrong things and I think the "volume rally" is just a myth that people keep bringing up. Constantly people keep saying "this rally is not confirmed by volume".<br /><br />All that matters for bulls is that volume falls down from intense selling pressure levels. When volume spikes during a huge sell off like during May 2010 or August 2011 - we call that a "wash out". Market price starts to rally when volume starts falling, meaning selling pressure is diminishing. That is a good sign for bulls, even if its just temporary.<br /><br />Do you remember any rally that has been confirmed by volume in the last decade? Voluming was decking the whole time during the 2003-2007 bull market. After March 09 everyone said that volume was not present. Afterwards, from August 2010 everyone said volume didn't confirm the rally. In 2003 to 07 and from March 09 market doubled. Since August 2010 to May 2011 market went up 20 to 30%.<br /><br />For example, look at the recent UBS Technical Analysis Newsletter published on 11th of October 2011 - <a href="http://www.scribd.com/doc/68333480/UBS-Technical-Strategy-Update11-10" rel="nofollow">link here</a>. On page 3, UBS strategist says: <br /><br />"First we need to see declining selling pressure before we get a more meaningful low and a buying set-up. Although in the last 2 weeks we had several 95% down volume events, the overall selling pressure has been deteriorating and this is typically what we see prior to important market bottoms." <br /><br />Like I said, your analysis makes no sense. Bulls actually won't to see decreasing volume, which indicating falling selling pressure and that bears are losing control. It takes a lot of volume to move markets down like in August that swiftly and that quickly.<br /><br />On top of that, don't you think ETFs have something to do with this? All global stock exchanges are losing business as volume is dying down. Don't you see them all merging between each other to cut costs and survive in these bought times.<br /><br />I hope this whole "volume is missing from the rally" myth just vanishes already. The whole argument just resembles perma-bear outlook.Tihohttps://www.blogger.com/profile/10336666083094327126noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-43432908056961791462011-10-13T10:51:49.496-07:002011-10-13T10:51:49.496-07:00This comment has been removed by the author.Cam Hui, CFAhttps://www.blogger.com/profile/09672203690656029787noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-33326808460300610392011-10-13T08:52:59.258-07:002011-10-13T08:52:59.258-07:00Yes you are correct. The post has been correct.Yes you are correct. The post has been correct.Cam Hui, CFAhttps://www.blogger.com/profile/09672203690656029787noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-44279522559590595052011-10-13T06:30:44.025-07:002011-10-13T06:30:44.025-07:00Cam, I love your work...did you mean that your co...Cam, I love your work...did you mean that your conviction is that the current market rally is NOT sustainable?FGHhttps://www.blogger.com/profile/07732904118916982468noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-26992313385643527692011-10-13T01:21:05.693-07:002011-10-13T01:21:05.693-07:00Don't you mean above, "To reinforce my co...Don't you mean above, "To reinforce my conviction that the latest bullish impulse is NOT sustainable"?Erichttps://www.blogger.com/profile/03159697599043912246noreply@blogger.com