Morning Report – March 11th, 2014

The broader market looked vulnerable most of yesterday, but by closing, a hammer had formed in the NASDAQ which turned out to be a test for supply for the NASDAQ. I posted this thought on the bulletin board yesterday afternoon as the Comp was rallying, and the TradeGuider software confirmed my analysis at the end of the day.   A test for supply means that buyers overcame the selling pressure from the Bears to absorb much of the supply that was available.  This does not mean the Composite will automatically go higher, we still need a confirmation day, but it does mean that the Bulls are not rolling over easily, and are absorbing the selling as long side traders bail out fearful of losing more money. When the selling pressure reaches an extreme, buyers step in to absorb the supply.

This 5 minute chart of the SP E-mini’s from yesterday shows it graphically. I used the futures contract because the chart contains volume. If you’re planning to attend the upcoming March seminar, I will be incorporating VPA, or volume price analysis into my presentation. The image below shows how well VPA works with the Force Indexes to give us insight into a market or stock. If you are planning to attend, I recommend that you read Anna Coulling’s book on VPA. Click here to follow the link to Amazon. Read Full Report