Hi Billy. I was wondering if prior price support / resistance has any bearing on your analysis. Looking at Friday's low it is very close to the previous 'major' low back on march 15th which also was/is somewhat close to support that held nicely back in January and February as well. Do the major players and/or HFT's track previous major lows?
Happy,Originally Posted by happy
I don't know but I guess they likely do track previous major lows like everybody else. Recently they especially like to hit obvious stops there, shaking out weak hands before reversing sharply in the other direction. This is happening on all timeframes where we constantly witness fast reverse moves born out of false moves. That's because fishing for these stops helps them reduce the VWAP while filling their positions and they will force the public to chase them in the following days, often with big gaps at the open.
I am aware of these lows and I try to evaluate their potential support strengths with the current pivot clusters. These are the ones that really matter.
Billy
Hi Billy--
I ran across this article on Zero Hedge this weekend. Perhaps others saw it, too. But it seems to tell a very similar story as you do. I'm glad you have spotted this phenomenon.
I admit I find it both fascinating and a little horrifying.
Many thanks,
Last edited by nickola.pazderic; 06-13-2011 at 11:36 AM.
We may be witnessing a live example of a programmed intraday shakeout reversal. Volume should pick up from here to really make me feel comfortable it has a chance to follow-through. Billy
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