"Nothing else in the world...not all the armies....is so powerful as an idea whose time has come."- Victor Hugo

 This has given me the brainwave to continue to 'short-circuit' whenever I am called upon to step into the breach for our mentor, who continues to be indisposed!

 Here is another loop to my Idkit:   http://awanginvest.com/?p=977 [1]

Volume is akin to the gospel I preach, the air I breathe and the song I sing, to quote Tom O'Brien.

In trading, volume is it! Without volume, I cannot get a clear read on the supply and demand curves and where prices may be heading.

What is volume? It is essentially the amount of say shares exchanging back and forth in a given period of time, usually as a daily amount. In school, we learn that volume is the amount of liquid or air in a 3-dimensional container or shape.

Trading volume is the amount of shares bought or sold in a given time period. One half of the transaction equation includes a buyer and the other half the seller. Therefore volume helps to gauge the demand and supply for a stock provided that there is a clear direction in price movement. High volume in a rising stock reveals a high demand for it, while high volume in a declining stock reveals a high supply with relatively low demand.

Volume ‘s greatest usefulness lies in its ability to reveal the truth and genuineness of price movements. Another benefit is its ability to predict a technical event such as a breakout. For example, if a stock is approaching the upper boundary of the channel, and with strong volume, it is likely that the stock will pierce the channel and may continue upward. Conversely, if volume is light, the stock is unlikely to pierce the channel and will continue its downward trend within its channel.

Volume must be quality volume. In all price moves, we should look for significant moves on strong volume with pullbacks on lighter volume . This is quality volume. The buying and selling activity is genuine - the strong move in price is accompanied by strong volume, and the verification of the reality of the move is demonstrated by light volume on the pause, pullback or retracement. Similarly, a price move down accompanied with strong volume is given validation when there is a pause or temporary move up with lighter volume.

A high volume day on a bar chart would stick out as a skyscraper - referred to as the last day with volume or real price. Real price is the price point where there is an enormous amount of buying and selling activity.

When volume occurs after the top of a prolonged uptrend, it is important to note the price destruction may follow. A price decline on high volume, coupled with wide price spreads spells trouble as it indicates large operators are quickly getting out of the equity - known as Volume off the top.

There are 4 phases to every market move : Accumulation, Mark-up, Distribution and Mark-down as in the Tubbs Model.  These phases have their respective impacts on volume.

 Both volume and price activity are much more intense during mark-down as opposed to mark-up. Once volume quiets down and price stabilizes, accumulation will crank up and commence the price cycle once more.

The more time a stock spends in accumulation phase, the more protracted the mark-up phase will be, ie the longer the case, the longer the effect.

Through quality volume, we find harmony in the market, even when the market is in chaos.