Weak Volume Bearish?

Den välkända diskussionen om huruvida markanden är bullish or bearish när priset stiger samtidigt som volymen stiger eller sjunker, är inte alltid en enkel tolkning. Det finns t ex massor av situationer när priset stiger och volymen är svagare än väntat, men trots det så är det inte bearish. Delar med mig en test gjord av L.W (grundare till Williams %R) som visar att så kan fallet vara.

----- Original Message -----
Sent: Sunday, April 04, 2004 8:39 AM
Subject: Volume contradiction

PRICE UP VOLUME DOWN---Every book I have ever read on the market---and that's a lot of books---alleges this is a bearish relationship. Makes sense, price rallies but the rally can't muster up more buyers, clearly interest is waning.

I fired up my handy-dandy laptop, opened up the Genesis software (gfds.com) and went to work. The first question I asked was; IF Close > Close.1 And Inside Bar = False And Volume > Volume.1 buy at next bar open stop.

Notice I made sure the up day was not an inside day, but a day that had some real range to it. I did the same thing in my second test the only difference was I changed to find out what happens if the volume is less than (<) the prior day. The market tested was the S&P 500 from 1982 through April 1, 2002. For all "trades" a stop of $4,500 was used with an exit on the first profitable opening.

Guess what.there is a difference and what there is suggests the opposite of all those books, in that less money was lost with less volume on the up day than more. Here are the numbers;


+ CLOSE + VOLUME 752 TRADES -$10,115 -$13 PER TRADE

+ CLOSE - VOLUME 714 TRADES - 5,043 - 7 PER TRADE


Both patterns had about the same number of trades but twice as much money was lost on the up day with increasing volume! Drat those books.why did those guys say all that stuff?

THIS IS JUST THE FIRST PART OF A LONGER STUDY BUT THE EVIDENCE ABOVE KEEPS REPEATING IN ADDITIONAL TESTS.



LARRY WILLIAMS

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