Brief Price by Volume/Watchlist Thoughts

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I spent 4 hours, alone, in a car driving to & from a jobsite today.  I used this time (and the voice memo function on my ipod) to explore my thoughts about what, exactly, I’m trying to identify with my watchlist.

Price by Volume plays a significant role in my analysis, and I started to think about the significance of these “volume voids” that I’m searching for.

I have yet to listen to what I was saying, but the basic premise is that I came to the conclusion that there are two circumstances under which a void in volume will exist.

  • one in which price has previously traded
  • one in which a stock is breaking out to new all-time highs.

What I need to do is separate out stocks that fit criteria “A” and criteria “B”…as my expectations cannot be the same for both conditions.  One is bounded, the other is an open-ended function.

More on this tomorrow as I will have my thoughts more organized.

Until then, my best to you all.

-EM

2 Responses to “Brief Price by Volume/Watchlist Thoughts”

  1. I like where you’re going with this. I’ve gotten as far as calling them slip zones to describe the reduced friction I’m observing.

    And are the open-ended situations more or less likely to become the site of swift rejection by the market?

    I like the idea of treating them as two separate beasts.

    • Re: open ended voids. That is what I’m going to explore. Swift rejection is a possibility, but on the other hand, at that point every single shareholder is in the black, so at that point there is a limited supply of something that is probably in high demand.

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Brief Price by Volume/Watchlist Thoughts

193 views

I spent 4 hours, alone, in a car driving to & from a jobsite today.  I used this time (and the voice memo function on my ipod) to explore my thoughts about what, exactly, I’m trying to identify with my watchlist.

Price by Volume plays a significant role in my analysis, and I started to think about the significance of these “volume voids” that I’m searching for.

I have yet to listen to what I was saying, but the basic premise is that I came to the conclusion that there are two circumstances under which a void in volume will exist.

  • one in which price has previously traded
  • one in which a stock is breaking out to new all-time highs.

What I need to do is separate out stocks that fit criteria “A” and criteria “B”…as my expectations cannot be the same for both conditions.  One is bounded, the other is an open-ended function.

More on this tomorrow as I will have my thoughts more organized.

Until then, my best to you all.

-EM

2 Responses to “Brief Price by Volume/Watchlist Thoughts”

  1. I like where you’re going with this. I’ve gotten as far as calling them slip zones to describe the reduced friction I’m observing.

    And are the open-ended situations more or less likely to become the site of swift rejection by the market?

    I like the idea of treating them as two separate beasts.

    • Re: open ended voids. That is what I’m going to explore. Swift rejection is a possibility, but on the other hand, at that point every single shareholder is in the black, so at that point there is a limited supply of something that is probably in high demand.

Comments are closed.