Re: [RT] Re: chart formations

["BobR" <bobrabcd@xxxxxxxxxxxxx>]

Volume can still be a useful timing/confirming tool 
when trading options on indexes if massaged with indicatoritis.  Attached 
are two of my long term favorites.  The CV.gif is Ben's baby and has been 
one of my favorites for intraday and end of day analysis.  The nickname Bob 
and DonMoontide is a psuedo name because of the way volume can swell like a tide 
on a full moon and because we have been trading partners for years.  Anyway 
Friday morning gave a great buy on the NASDAQ and the NYA cumulative volume(not 
shown) as they both crossed the hourly, one day and two day lines.  ADV and 
ADVQ were > than DECL and DECLQ as were their volume counterparts.  
Price kept making trendline breaks to the upside and you just had to be long and 
not fade the CV.  Thankyou Ben.
 
The second chart is a bit unorthodox and shows the 
volume per minute throughout the day.  If you want volume behind your 
trades, then the AM and PM have the higher flow rate in millions of shares per 
minute compared to midday.  That is common knowledge but seldom 
measured.  Likewise you want net volume to be confirming the trend for a 
lower risk trade.
 
BobR
<BLOCKQUOTE 
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
  ----- Original Message ----- 
  <DIV 
  style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From: 
  Ira Tunik 
  To: <A 
  href="mailto:realtraders@xxxxxxxxxxx"; 
  title=realtraders@xxxxxxxxxxx>realtraders@xxxxxxxxxxx 
  Sent: Sunday, October 15, 2000 6:30 
  PM
  Subject: Re: [RT] Re: chart 
  formations
  Since the early 70s and the introduction of options, volume 
  numbers have meant less and less as an indicator.  At one time I used 
  volume in my technical analysis and when I saw what was happening on the floor 
  of the options exchange I realized that volume meant a great deal less in any 
  system then it did prior to that time.  As the years have gone by and 
  more and more funds, institutions, firms and the public are using options, 
  volume numbers have been skewed.  If a market maker has  a position 
  of 100 calls at or near the money, he can trade up to 10,000 shares of stock 
  with impunity. This is small size.  The only thing that stops volume from 
  growing even greater is position limits on the stock options.  The arbs 
  against futures, and now index symbols, makes volume numbers even less 
  accurate as a predictor.  There are just to many outside factors 
  influencing the volume numbers for them to have the same meaning that they had 
  30 or 40 years ago.  Good trading.  Ira. 
  Gitanshu Buch wrote: 
  
    
    Not sure how I would position-trade this market on the long side - bear 
    market rally or not.To 
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Attachment: Description: "CV.gif"

Attachment: Description: "flowrate.gif"