Volume Price Analysis

Long $SGYP Day 160 Analysis

Not much has changed from the last game plan, especially since it was only two days ago. It looks like the last few days have been all retail trading. The volume has gone back down to average, which suggest there hasn’t been any manipulation. There seems to have been a lot of fear and confusion in retail, which was the point of the previous wholesale campaign to kill the loan rally. However, today showed some signs of better sentiment in retail. I will be watching to see what wholesale’s next move is if, in fact, retail is starting to rebuild some confidence.

micro analysis

Here is today on the 15 minute chart. First, a little bad news. The solid orange line is the resistance line of a new down channel that has been created. That will be seen more in the macro analysis. The other thing is it made a low at $2.57, which is a new lower low.

There are also several other good things about today. The opening candle set the tone of the day. It made it’s low there, but quickly recovered and made that long lower wick, which is a good sign of strength. The next positive development was where I have the two orange leaders pointing up. Those were two strong moves associated with the highest volumes of the day. After the second leader, the price faded but the volume associated with it was weak. So, it was a weak move down.

In the gray area the 5DMA crossed below the 20DMA on that move down. It closed that way, but was starting to point back up like it would make an attempt to cross back above. That is more evidence of weakness in the down move.

Looking at the volume profile, the price moved right up to the top of the value area then retraced and found equilibrium at the POC. Basically, the price action did what it was supposed to based on the map created by the volume profile, again more evidence that today was a retail day with no manipulation. Also, the volume profile is positively skewed today. The larger bell curve is at the top, which means the price was finding value higher. Another positive indication going forward.

macro analysis

Here is today in the context of the last 8 days. The volume profile is showing this week. Looking at the volume and price over the last 7 days, it looks like valid retail trading. The 8th day, first candle, was the loan news day which was the last time wholesale participated to manipulate the price. There was above average volume on days 4 and 5, but the effort was in proportion to the result, so I think those were just heavier retail days.

As stated in the micro analysis, today looked like some confidence was returning to retail. However, I pointed out the price and volume of today and 3 days ago with the yellow arrows. Day 3 had similar price action and volume as today, but didn’t fare so well in the following days. That doesn’t mean next week will repeat that, but it shows there is no guarantee one day will turn things around.

The 5DMA (light blue) is still below the 20DMA (dark blue), but after today it looks like the distance of separation is slightly declining. It is way too early to tell, but that is the first sign in a while that the negativity is losing momentum. The 50DMA (pink dashed) is below the 200DMA (red dashed) and gaining momentum, so there is no improvement in the longer term trend.

I mentioned a new down channel in the micro analysis. The orange dashed lines show the new down channel created after the loan news. Today it hit the resistance of that channel and retraced lower away from it. A stronger day might have seen it break out of the channel.

From the volume profile, this week the bulk of volume traded at $2.73. Today closed at $2.70, which is in the range it should have closed according to the volume profile. Again, as stated in the micro analysis, that would suggest that this week was all retail and no manipulation.

global analysis

Here is the weekly. It was another negative week to add to about 2 months of brutality. The week ended down on less volume, but still above average. The upper and lower wicks are about equal length, which shows indecision and the negative spread suggest negative sentiment for the week.

The 5DMA (light blue) is still decisively negative under the 20DMA (dark blue), but as the micro analysis, its showing slightly less momentum in the short term down trend. If this down move continues, the 50DMA (pink dashed) will cross the 200DMA (red dashed) signifying a new longer term down trend. The 50DMA crossing below the 200DMA is seen as a pretty significant technical event which could possibly bring a new wave of retail shorts.

The orange small dashed line is the neckline of a possible head and shoulders. It tried to make a move over it, but was rejected. If the pattern is correct, it should play out to the $2.43 support. The orange longer dashed line at the top of the chart is the resistance of a long term descending triangle. I’m not too concerned with that at the moment, but a descending triangle normally breaks to the down side as it reaches its apex.

I think the descending triangle is a little too soon in it’s cycle to break down, but if it did and it coincides with the 50DMA crossing below the 200DMA, that could be big trouble. On the other hand, if trading range support holds, that descending triangle resistance will make a good target of where to sell at least a portion of my position.

Finally, the volume profile is still building new value lower. This initiative action of new lower value would indicate if it does move back into the previous higher value area around $4, it will be rejected. The acc/dist line and the OBV are still free falling with the price which validates the distribution by smart money.

game plan

I still haven’t added to my position, but still have an order in to buy at $2.45. I think the triple bottom around $2.43 will hold and a spring under that will form. However, despite today showing some signs of strength, the longer term technically is looking very ugly.

However, there are also some potentially positive fundamentals out there that need to be considered and usually fundamental events trump technical ones.

So, the game plan is to keep following smart money because nothing trumps them. This past week has been all retail. It appears that their confidence may be returning after being shaken by recent wholesale manipulation. I’m still looking for another good shake out of retail. Wholesale seems to have them on the ropes and letting them get back in the game followed up by another nasty sucker punch wouldn’t be past them. That may sound cynical and all conspiracy theory sounding, but it happens all the time if you watch for it using volume price analysis.

Therefore, I refuse to add to my position despite what the chatter is. I’m looking for a trend reversal, not a short term pump. In fact, based on such bad technical data, I’m rethinking my open order at $2.45. It may be safer to cancel it and wait for some positive technical and positive fundamentals to align. I’d rather add on the way up at $3.50 than guess $2.45 and it continues to fall.

Based on today, if wholesale lets retail remain in control, next week should start well. In fact, as evil as it sounds, I can see next week starting well and even ending up. As retail gains confidence, panic buying could ensue and that’s when wholesale would take control back and do a nasty shake out again creating a spring.

Unless something of note happens before hand, I will re-analyze this after next week.

 

 

 

 

 

 

 

 

 

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