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I thought that there was always some kind of a secret that could unlock the
riddle of trading in Volume and Open Interest. But after years of looking
there are only a few week applications that have made sense. Here is one if
the V is up and the OI is up and the prices is up then the trend if up is
confirmed. Just turn that around V up OI up and Price down a down trend is
confirmed.
Brent
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> From: charles meyer <chmeyer@xxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: sp500 update
> Date: Friday, October 30, 1998 7:21 AM
>
> Ben, Earl, & Group:
>
> The most striking aspect of
> > this huge rally is the lack of volume and failure of OBV to confirm the
> > rally - this is especially noticeable in the S&P futures and SPY.
>
> Anyone out there who has been able to solve the riddle of the inter-
> relationship between price and volume? I am a Wyckoff student--before
> that a Don Wordon student. I have a great file on volume information
> but am baffled and confounded by Earl's observation; have been for a
> long time. The Wyckoff explanation just doesn't seem to work in real
> time--volume can be very misleading. I always wanted to believe Joe
> Granville's statement that 'price leads volume' but can't get a handle on
> how to trade it. Perhaps the best answer, from someone I respect, was
> the idea that I put too much emphasis on volume. Seems it is so easy
> to manipulate volume and the stats are skewed by program trading and
> option activity. Comments?
>
> Charles.
>
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