(DJI 15 min candles approx 2 days period)1 or 2 candles before the big bleed that you see on the last candle, i said "i wish i could short right now."
Explanation: All of the potential buyers have become holders. Considering that this whole rise has been contrary to the mass of economic data being released... the holders will wake up and realize.. Then they will become the sellers.
We should have ALOT more volume than this, considering that we are day 2 into testing a MAJOR resistance point for the market.
Weekly Chart DJI
However, as you can clearly see, the volume quite simply isn't there. On the short term, we're seeing a slow crawling rise on low volume.
This is a bearish sign. Because no one wants to hold a stock that isn't going to rise. And it may sound crazy, but no one wants to buy a stock that doesn't rise either, even though common sense says, that if they bought it, it would rise. It may rise later, but not without a little of a fall first. The reason for this has to do with the the seller sentiment, the methods of approaching the market employed by the huge monies, and then it has to do with the reactionary methods of stock traders to these principles. Most of all, though, it's a matter of simple probability. The higher it goes, the less probable it will continue to rise and the more probable it becomes for it to fall. When you hear about a market testing, or consolidating, or slumping a bit, it could very well mean a resetting of the probability ratio---
....but don't bet the farm on it. This is just one of the things it could be.
Personally, it will definately go back and test a previous support, and the success of the of the subsequent rise and retest of the resistance will depend primarily on the speed of this process.
Why?
A precipitous drop followed by a frenzied climb back up to resistance = good sign. It means there is still a healthy apetite for stocks at this valuation.
If the retest process is much slower, it may give the overall economy some time to recover and show tangible signs of improvement.. this would be ideal. The market goes down to a realistic valuation and rises in rhythm with the economy.
If the rhythm is somewhere in the middle it = bad.
Possibility 2: could this be the second candle consolidation period?
Explanation: All of the potential buyers have become holders. Considering that this whole rise has been contrary to the mass of economic data being released... the holders will wake up and realize.. Then they will become the sellers.
We should have ALOT more volume than this, considering that we are day 2 into testing a MAJOR resistance point for the market.
Weekly Chart DJIHowever, as you can clearly see, the volume quite simply isn't there. On the short term, we're seeing a slow crawling rise on low volume.
This is a bearish sign. Because no one wants to hold a stock that isn't going to rise. And it may sound crazy, but no one wants to buy a stock that doesn't rise either, even though common sense says, that if they bought it, it would rise. It may rise later, but not without a little of a fall first. The reason for this has to do with the the seller sentiment, the methods of approaching the market employed by the huge monies, and then it has to do with the reactionary methods of stock traders to these principles. Most of all, though, it's a matter of simple probability. The higher it goes, the less probable it will continue to rise and the more probable it becomes for it to fall. When you hear about a market testing, or consolidating, or slumping a bit, it could very well mean a resetting of the probability ratio---....but don't bet the farm on it. This is just one of the things it could be.
Personally, it will definately go back and test a previous support, and the success of the of the subsequent rise and retest of the resistance will depend primarily on the speed of this process.
Why?
A precipitous drop followed by a frenzied climb back up to resistance = good sign. It means there is still a healthy apetite for stocks at this valuation.
If the retest process is much slower, it may give the overall economy some time to recover and show tangible signs of improvement.. this would be ideal. The market goes down to a realistic valuation and rises in rhythm with the economy.
If the rhythm is somewhere in the middle it = bad.
Possibility 2: could this be the second candle consolidation period?
