S&P500 volume

by Malcolm Pryor on 31/12/2012
Candle volume and equivolume charts dont have time as the x axis, they have volume. This means that the wider the candle, the more volume there was on that day. Big volume days can have predictive value, particularly at support and resistance zones. On the attached chart of the S&P500 index the candle for 21 December stands out at being very wide, roughly 3 times the width of the previous candles. And it was a big down day. That shows very dramatically that a very large number of traders exited long positions or added to shorts on that day, setting up a powerful resistance zone around 1440 to 1450. From a fundamental point of view no doubt many will point to the fiscal cliff issues as the cause.


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