Volume - Primary Importance ?

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Tuesday - 23rd December 2008
9.00 a.m. - Malaysian Time
9.10 a.m. - A little bit of updating

Every time you contacted your broker ( dealer ) and asked for his/her opinion regarding the market, he/she would say that the market was not 'good' because the volume 'was not there'. Do you think the volume does really do the trick?

I do not really know for sure but as for me whenever I trade I seldom look at the volume. The most important thing to look at is the variance between the highest and the lowest of the prices. If the variance is high ( some say the volatility ), then it is good to trade. If not then it is not worth while to trade. The reason is simple, if you are to follow the volume concept which indicates that high volume means high activities and high activities mean high volatility, then there are times where the volume is large but the market do not move tally to the volume's movement. On the other hand, there are times where the volume is small but the price range is large. So the volume does not really act as a factor but more as an indicator.

Today

Should I do the forecasting for today ? Well......er... the volume is.....er.. tentatively, getting smaller every day due to the incoming of Christmas and end of the year holidays. Since, as I pointed earlier, that the volume is not the determinance, so my forecast for today is as follows;

1) If the market opens between 1578 to 1596 . Buy if the market manages to pass the levels between 1597 to 1604. If these levels are beaten up, the market may go further up and a white bar may be formed at the end of the day or at least in the early part of the trading day today. If the market manages to beat down the levels between 1561 to 1571, the market may fall further down and a black bar may be formed today.
2) If the market opens between 1597 to 1620. Buy after the market has fallen a bit and then moves up 5 points above the opening level.
3) If the market opens between 1553 to 1577. Sell after the market has gone up a bit and then retraces 5 points below the opening level. If the market manages to beat down the levels between 1561 to 1568 ( i.e. if the market opens higher than 1568, off course ), the market may fall further down and a black bar may be formed today.
4) If the market opens other than the above, it is your call or may be you can do some preparation for the coming Christmas.
5) If you are fimiliar with trendlines , look for 3 tops/bottoms etc...if not see bold letters as #4
6) As usual, please refer to # 9 ( Thursday's Tips dated 26th June)
7) Also refer to # 9 and # 10 ( Tuesday's Tips dated 1st July )

That's about it. If not sure just contact your dealer/broker or may be Santa !

Enjoy your trading moment!
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