Silver Volume Swings

Richard Wyckoff told his students to think of waves of price and volume. The dog fight of bulls and bears will always resolve.

There are not many books that actually assist money making, yet Tim Ord's book below certainly helped this site.

Tim Ord

In the book above Tim Ord expands Richard Wyckoff's logic and explains how to review waves of price and volume. Let's use silver ETF as an example (code is within Analysis chart, more examples here)

The chart below uses a fixed bar period to form a 'price wave' and sums up the raw volume for each price wave. Up price waves are blue, down price waves are red.

Let's review the purple numbers 1 to 5 on chart 1.

(1) High volume break out rally higher, very strong demand.
Point: Sign of strength by bulls. 

(2) After a failed attempt to move higher a high volume sell off, a lot of supply, weakness confirmed with move down after swing 24.
Point: Bulls gave up and sold, and some increased shorts. 

(3) A high volume sell-off, shorts getting exited, breaks support, which eventually failed.
Point: A high volume test of support by the bulls, the bulls prove they are in control and the bears are shaken out when swing 9 lower fails. 

(4) High volume rally.
Point: Bears short covering and giving up, bulls accumulating at a cheaper price.

(5) High volume rally. Bulls accumulating may be tagged as a sign of strength if price gets to resistance. Point: Sign of strength in play, but a work in progress, if it stalls price maybe for more sideways churn. 

Chart 1: Silver (SLV ETF) Volume Swings

(Click on image to enlarge)

Chart 2: Silver Futures Curve

(Click on image to enlarge)

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