Long VSTM Day 3

TODAY’S CALL: 

It showed good strength today. I would have liked to see more volume behind it, but the volume seemed in proportion to the price move, so it was a valid move. Ended with a nice long lower wick as well, a good sign.

MICRO ANALYSIS

Here is today on the 15 minute chart. How is that for nasty shake out?! The day opened with a pretty long lower wick candle, and sure enough popped higher on the next. But, from there it looked like a train wreck. The opening candle looks like wholesale participation to create greed and get retail to chase it.

As wholesale market it down, after marking it up, those weak hands’ greed turned to fear and volume increased again as those hands bailed.  I think those three volume bars between 10:15 and 10:45 were high because wholesale was participating again buying up all the shares that they just shook out of the weak hands. Once their buying absorbed all the selling, we got that third green bar. The next one after that looks like a low volume test, which remained low to signal they mopped up all those weak shares in that waterfall.

Then, from 11:15 until 2:00 it was tumble weeds as for volume. Funny how quiet it got after all that action? I think there was some low volume testing again headed into the final hour and once wholesale was satisfied that the retail selling was done and wouldn’t hinder their mark up, they got behind it again buying and creating more crazy volume at 2:00.

I think they ended there day then and let retail bid it up again in their greed and took their profits there to end the day, which is why those last bars have less effort but still big results. Fortunately, after yesterday’s analysis, I anticipated a strong close to stay above 2 and I didn’t flinch during the morning shake out.

MACRO ANALYSIS

Here is today’s daily candle in context to the previous 5 days. You can see today ended in a bullish doji due to the morning mark down, then afternoon mark up by wholesale. You can also see the rising volume, which is due to wholesale starting to participate in the action. So far, a good looking setup for a reversal back up to that 2.50 area of resistance.

GLOBAL ANALYSIS

Here is the weekly chart showing basically the same days as yesterday’s chart.  Continuing with yesterday’s global analysis, I drew a yellow line to the second LPS to end that second SOS. It’s right there at 2 and the fact that we closed the week above 2 makes next week look good.

I’m guessing that last five weeks were all red candles because there were a lot of retail wanting to sell at that 2.50 resistance. Wholesale wants to make sure they mop them all up. It also looks like they created a bunch of weak hands around 2.50 who were expecting a break of the resistance, but are now selling out since wholesale is marking it back down.

GAME PLAN

I think this week was a success for wholesale. I’m expecting next week to be green and move higher away from that 2 on increasing volume. Monday could maybe see a little more shaking out depending on what retail selling pressure might be left. As long as we stay above 2 on a closing basis we should be ok.

Leave a Reply

Your email address will not be published. Required fields are marked *