Hi Dan - have been following your posts for some years at JSM and it's great to be able to follow your insights/musings here in more depth now. Thank you.
A question, if you have time: a number of admirable technicians (Clive Maund and Morris Hubbartt) are sceptical of this recent move up in gold, as volume has not been strong. I would appreciate your thoughts on the role of volume in this move and/or price moves generally.
Bruce - I will try to accomodate your request as time permits. I have had an extremely busy day today. We generally want to see strong volume accompany any move higher since that is the force that lifts the market. When volume is tapering off it is generally indicative of a lack of conviction.
STrong volume is not needed for a market to move higher; it can do that as many doubters sit on the sidelines unsure whether or not to join in. However, strong volume is necessary for a market to sustain a move higher. Once an overhead technical resistance level that has been a significant barrier gets breached, one will see the volume increase as the doubters then move in and conviction increases.
Hi Dan - have been following your posts for some years at JSM and it's great to be able to follow your insights/musings here in more depth now. Thank you.
ReplyDeleteA question, if you have time: a number of admirable technicians (Clive Maund and Morris Hubbartt) are sceptical of this recent move up in gold, as volume has not been strong. I would appreciate your thoughts on the role of volume in this move and/or price moves generally.
Many thanks. - B. in Toronto
Bruce - I will try to accomodate your request as time permits. I have had an extremely busy day today.
ReplyDeleteWe generally want to see strong volume accompany any move higher since that is the force that lifts the market. When volume is tapering off it is generally indicative of a lack of conviction.
STrong volume is not needed for a market to move higher; it can do that as many doubters sit on the sidelines unsure whether or not to join in. However, strong volume is necessary for a market to sustain a move higher. Once an overhead technical resistance level that has been a significant barrier gets breached, one will see the volume increase as the doubters then move in and conviction increases.