Unhealthy Trends Cont. 2
Look for the downtrend in early February. Let's see what happens next.
It can be seen that the downtrend was not the start of something bigger. Before hand there uptrend, then the trend is upward as well. This is probably downmove correction is not part of a healthy strong new trend.
• When prices rise and volume decreases, it means that this trend will continue, prices will either increase or lower rates begin to decline.
• When prices are lower and decreases the volume, this trend is unlikely to continue for the cost or reduce a lower rate or begin to decline.
1st Compact uptrend: In early March volume picks. Down moves come in the form of reducing the volume and upswings came on higher volume. Tom cut the number of Easter.
2nd Easter holidays, the price heads back to the increased volume, fast starting uptrend. The first volume is reduced in the divergence of the price action that can be interpreted as a sign of warning. The smaller ranges here means investors are sure wave uptrend is over. However, the volume starts picking up as the price continues heading up means merchants are getting on board this trend.
3rd Tom gets higher as the price increases reaching and going past 1.2900. The torrential uptrend is coming to an end with the emergence of a huge red candle. There is great uncertainty and large ranges (although reduced volume), as investors try to figure out which way the next price movement will go. There is room for a drop of Memorial Day.
4th Traders are still uncertain and battle on. Once the price reaches a high resistance at 1.2900 last a correction. Fundamentals of shift and here the Fed sounds very hawkish due to high inflation numbers. The move is going down to the increased volume.
5th Then it cools and so does volume. The rest of June, a trend of decrease in volume due to uncertainty and traders were waiting for the FOMC meeting this coming week. A statement from the FOMC meeting on June 29 went against market expectations and the result was a sell dollars for increased volume.
Monday, May 23, 2011
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