Volume Price Analysis


Volume: High Spread: Wide Close: Low

  • Upthrusts usually appear on market Tops, that is after a Rally where the market has now become Overbought. Normally seen after there has been Weakness in the Background

  • The MM know that the market is weak, so the price is marked up to catch stops, encourage traders to go Long in a weak market and Panic traders that are already Short into covering their very good position

  • A wide spread down bar that appears immediately after any Upthrust tends to confirm the weakness

  • The MM knows people react to the 2 FEARS – the fear of losses and the fear of missing out, and so trades with this in mind. He also knows, or can give a very good guess, as to where the STOPS are.

  • The MM marked up the prices in early trading hours indicating strong bullishness. Enticed by this bullish move, the Weak Money rushed to acquire the stock. (Shorts if any would also have rushed for cover). Meanwhile the MM is quietly distributing their holding to the Weak Money. In the later part of the day the MM drastically marks the price down trapping the weak money holding stocks at much higher prices. The MM

  • The MM are quite capable of generating an Upthrust, which is a moneymaking manoeuvre. It is a common strategy to suddenly mark-up prices to catch the unwary. This action is seen after signs of weakness and frequently indicates the start of a falling market. Once the market is known to have become weak, MM can mark the prices up quickly, perhaps on good news, to trap you.

  • As the early price is marked up, premature short traders are liable to panic and cover with buy orders. However, those traders looking for breakouts will buy, but their stop-loss orders are usually triggered as the price plummets back down. All those traders who are not in the market may feel they are missing out and will feel pressured to start buying.

  • If we see high volume on a doji (or doji-like, shooting star) for example (with red body for stronger indication), you can feel its weakness being "confirmed". Most of the time the Upthrust will be moving into new higher territory. The High of this bar will be much higher than the previous high.. High volume should be an important consideration.

  • Overall, these up-thrusts are very profitable for the market-makers or specialists. An upthrust is usually seen after a period of weakness and usually indicates lower prices.

Stopping Volume

Volume: High Spread: Wide Close: Upper side

  • Characteristic: (1) Wide spread down bar closing on middle to high; (2) Volume must be very high to ultra high; (3) Still on point 2, the 2nd bar should took out the high of the previous high convincingly, volume should still be high as well but lower than the previous bar.

  • Normally in a down trend you will see a down bar with high volume bar closing on the upper side. This is called a Stopping volume.

  • This indicates that the MM is absorbing all the stocks. The MM has decided to start the game all over again and have decided to stop the down tide and start accumulating.

  • As a result the stock will soon see side ways movement or go into a long accumulation phase.

  • In effect the stopping volume or absorption volume indicates that the long bearish move is likely to end soon.

  • The volume which appears as the market is falling is the pre-cursor to the market finding some support as the market makers move in to support the price action. The market makers attempting to halt the move lower by buying into a falling market.

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