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I think you've about covered it - the best clues are offered by volume at
points of extreme fear and greed. Otherwise, I think OBV is about as good as
it gets and sometimes it works and sometimes it doesn't - I do find it
worthwhile to be wary when OBV does not confirm, however I would never
enter/exit a trade purely on OBV.
Earl
-----Original Message-----
From: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, October 30, 1998 9:56 AM
Subject: Re: sp500 update
>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
>
>----------
>> 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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