I would think the bulls would have been hooting and hollering and begging for WLT to go down and test that $9.88 low. Sometimes they don't know what is good for them. Yeah, the volume has really lightened up but I don't like it when they sit right above the swing point building cause for lower prices.
CLF, the leader of the two, reached the 78.6% retracement level and gave it up today. It is over bot and well above the 20MA too.
Well, I know that you may not consider what happened on Wednesday a retest of the lows on low volume, but I think most would say it was a successful retest and thus this move up is legitimate and very positive for longs. The 'sector wide' news seems to be getting a bit better. In the end, your words here onepoint....we seemed to have had that successful test with low volume which is good for longs. So now what? Thoughts? GL, B
FRIDAY AUG 9th
It will be in a trading range (TR) for awhile. If August 7th was the test of the low, that is, the test that says the selling is done then we need to see a sign of strength (SOS), wide price range on the kind of volume that stands tall above all the other nearby volume bars on the chart. When we do, the buy is on the following low-volume retracement. Until that happens it can still go down and test 9.88 or even blow it away to the downside. And it doesn't need high volume to go lower, because WLT has been in a downtrend, it has supply in the background. It does however need a very-high-volume up-day to prove demand; to change the trend.
The current TR is between 9.88 and 14.75. The safest way to trade the range is to sell the bounces until proven otherwise. It has recently been manipulated higher.....the sharks are selling to the sheep. It is going against that bar of the 24th which had 27M shares and doing it on much lower volume. The price is going up but the buyers and sellers are way fewer than there were on the 24th when they were at these same prices.
Say you went to a swap meet to buy widgets one week and there were 500 people there and the price of the widgets were selling at $10. Then you went back the next week and there were only 100 people there and the widgets were selling for $12. Which price is the fair market price? Would you think the price was manipulated higher? Would you buy them at $12 or would you wait?
I understand your logic and always love your tech. analysis OP. I believe a retest doesn't have to break below or hit $9.88 though. Just come close to it. I.e. around 10%. I have seen it a few times where it also goes the other way where it breaks the bottom on big volume. Then reverses the next week never to look back for many years.
On a separate side note I just bought IPI today at $11.01 for a swing trade. I know it's risky, but I like the odds of a retest to the 2009 lows of $14ish and a retest of that gap down last week. Then obviously there I think it will go back to hate mode. I think IPI is nearing a short term bottom if you guys are playing any potash swing trades let me know?
Sometimes they don't test the very low of the low bar, but then they reject the lows and immediately get out of the danger zone; a hypodermic needle. This is just hanging right above the swing low........it wants it I think.