I kept the position even when the bounce faltered, as I want to be slightly invested since this is the best way to "feel" the market... and also because the EV pattern still looks good.
The trade ideas for today are below.
Yesterday, we have updated the Volume Surge tool with the up/down volume measure.
Let me explain it using the GWR example. Yesterday, GWR broke out on strong volume (GWR was not on our trade ideas list.)
For a breakout to be valid, the Breakout volume must be higher than the strongest down volume of the past 10 days. This is how the Gil Morales and Chris Kacher have defined their pivot point buy/short alerts.
In the Figure below, it means that the volume shown by the Blue arrow must be higher than the volume of the Red arrow.
The Table below shows the Breakout Calculator results calculated on the data at the close before yesterday. The BC measures for the past 300 days the returns after Breakouts on Volume at the entry price indicated here of $50.6. This price is higher than the high of the previous day.
We then use the sensitivity analysis of the BC to calculate the buying range on a breakout. Results are shown below. The prices indicated show the entry range during a breakout phase.
What was lacking was a way to determine whether the current price was high enough for triggering a Breakout on Volume.
You can now see this in real-time through the link below:
http://www.effectivevolume.com/conte...2-volume-surge
When you reach the page, you arrive to the image below (for AAPL.) This shows the current volume in real-time as well as the distribution of the average volume for the past 10 days.
But, if you click on the "Theoretical" option (we will use another name later,) then you see two horizontal lines. These lines are the Real-Time down volume and up volume. For Breakouts, the RT volume must be higher than the RT Down volume. For breakdowns, the RT Volume must be higher than the RT up volume.
The GWR volume surge Figure is shown below and indicates that by midday, the RT volume was higher than the EOD down volume. I cannot show it here, but usually, the strong volume signal can be detected or anticipated by looking at how far the RT volume is from the evolving RT down volume.
I will use this option during the trading day in order to be able to anticipate a signal.
Please note that GWR issues its earnings early next week. Hence, I will not trade it before earnings. I do not want to be in a trade that loses 50% or 30% like DATA or LNKD did overnight. I was showing it here as a mere example.
