SVOL/ADVV trading (b)log

[IngoPan]

Hi!

Every now and then, i am going to post some trade setups in here solely based on the sentiment traders ADVV / SVOL strategy.

[IngoPan]

Afternoon trade 10/10/06:


SVOL chart as of 10/10/06:
http://www.sentiment-traders.com/svol101006.png

Focus on the time between 12-14 o´clock. After a powerful run in
the morning, the stock volume traded at ask minus the
stock volume traded at bid ( SVOL ) experienced distribution.

ADVV chart as of 10/10/06:
http://www.sentiment-traders.com/advv101006.png

As we see on the chart, during lunchtime, the
advancers stock volume - decliners stock volume
( ADVV ) are in a state of equilibrium.

Remembering the divergence between ADVV
and SVOL, we assume that the market is in
distribution mode, means market will be trading in
the trading range set in the morning session, creating
a potential, low risk trading opportunity.

So let´s take a look at the price action on Russell 2000 chart:
http://www.sentiment-traders.com/rut101006.png

At 14:20 we entered a long position in the ER2 Russell 2000
future, as ADVV and SVOL started to tick up synchronously.
ADVV went from slightly negative to positive one, showing
strength and is confirming our assumption of a sideways market.
As we bought the lower third of the intraday chart, we were
able to use a tight protective stop loss of 1.5p. We entered
the Er2 at 48 and sold it at 41 for a 3p profit.

[Weisse]

Thanks for your info.

[acouch]

Thanks for the explanation Ingo,
much appreciated :)
ac

[johnboy]

danke schon Ingo.........very interesting.......sorry i don't know how to put umlauts on vowels.

[IngoPan]

Afternoon trade 10/13/06


As we see from the chart, market participants are buying a lot stocks on the ask side than they are selling one the bid side.

http://www.sentiment-traders.com/svol101306.png


Advancers-Decliners volume is steadily rising, suggesting us that any rebound is a potential buying opportunity.

http://www.sentiment-traders.com/advv101306.png

As we dont wanted to go against the trend/market
we waited for a significant pullback from highs to enter
the market on the long side. As you can see from the chart,
the pullback happened during lunchtime, while the SVOL chart
doesnt show any significant weakness. The divergence between
SVOL - ADVV confirming our assumption, that this move is
more a pullback than a starting selloff.

http://www.sentiment-traders.com/ym101306.png

At 3PM we bought YM at 11990, anticipating a new high
to be made, which was then finally finished around market
closure, giving us a nice +25p,low risk profit.
http://www.sentiment-traders.com/www.sentiment-traders.com/svol101306.png

[pat255]

Very nice explanation on SVOL use ...The charts of ER & YM u posted could u pl also show the tf of the charts ...just to know what u use for looking at the charts ...

Pat

[IngoPan]

Very nice explanation on SVOL use ...The charts of ER & YM u posted could u pl also show the tf of the charts ...just to know what u use for looking at the charts ...

Pat


tf? Whats tf please ?

[IngoPan]

The trade setup on 10/26 was an easy one.
SVOL skyrocketed all day, while ADVV rallied also and took a pause
around lunchtime. During lunch, YM sold off 30+ points suggesting a
reasonable entry on this pullback from highs as SVOL/ADVV didnt move much.
We bought YM at 12130 (5 min swing low). SVOL/ADVV continued their rally
so we decided to stay long till close,anticipating a hod close. We sold YM
at highs at 12160 for a 30p low risk profit.

ADVV:
http://www.sentiment-traders.com/advv102406.png.
SVOL:
http://www.sentiment-traders.com/svol102406.png
YM:
http://www.sentiment-traders.com/ym102406.png

[IngoPan]

Afternoon trade 10/25/06:



SVOL skyrocketed all day long, while ADVV set lod after lod.
Normally, this would indicate a neutral market. But around 14:30 we noticed that ADVV stopped trending down as it didn?t make another
lower low.
At this point we favoured a long trade as we anticipated ADVV to move in synch up with SVOL. We bought YM at 12155 and sold it some minutes before close for a net profit of 20 YM points.

SVOL:
http://www.sentiment-traders.com/svol251006.png
ADVV:
http://www.sentiment-traders.com/advv2501006.png
YM:
http://www.sentiment-traders.com/ym251006.png

[IngoPan]

On 5 min chart, both, SVOL & ADVV make highers highs / higher lows while
the Russell 2000 Index makes lower highs / lows.
Additionally, at lunch, ADVV reached the 0 level while SVOL is rallying higher,
making consecutive new highs. As we know from the previous trades
in the (bl)og, this divergence pattern is slightly bullish, as ADVV is trading
around 0, retracing from intraday lows, while ADVV is trading at hod.
We therefore decide to get in the market long after lunchtime, anticipating
a rally of the Russell 2000 from lower third of intraday range to upper third.
As you can see from the Russell chart, the index started catching up on
SVOL / ADVV with a powerful move to the highs, generating a 5 point profit
in the ER2 Russell 2000 future.

SVOL:
http://www.sentiment-traders.com/svol301006.png
ADVV:
http://www.sentiment-traders.com/advv301006.png
Russell 2000 index:
http://www.sentiment-traders.com/rut301006.png

[Enliten]

Pat asked earlier on what tf you were using in these charts , seems to me tf would be time frame and it looks like the chrts you posted here are 5m? thanks for all the explanations they are helpful;)

[Enliten]

sorry i now see your previous post ....

[IngoPan]

sorry i now see your previous post ....

Yes, 5 min for a better overview.

[IngoPan]

After having traded in negative territory for aprox. 2h, at 12:48pm, ADVV becomes positive.
Supported by SVOL, which is trading around hod at that time, supposing the bullish sentiment of the marke has been approved.
We decide to enter a long engagement, anticipating a synchronized up ticking of ADVV / SVOL / ER2.
We buy ER2 at 776.5, expecting a strong upmove. At 14:47pm we sold ER2 at 782.5 for a 6p profit
as we are suspecting the Dow 12.200 resistance to hold.

http://www.sentiment-traders.com/svol151106.png

http://www.sentiment-traders.com/advv151106.png

http://www.sentiment-traders.com/er2151106.png

[zee]

Very helpful Ingo. Please continue to give examples when you have the time.

[IngoPan]

ADVV:
http://www.sentiment-traders.com/advv19107.png
SVOL:
http://www.sentiment-traders.com/svol19107.png
YM:
http://www.sentiment-traders.com/ym19107.png

Typical,low risk short setup as YM made higher lows and lower highs on 5min chart during lunch hour(s), creating a wedge.
During this time ADVV is constantly selling , making new lods subsequently.
SVOL isn´t bullish at all as its oscilating around 0 and is therefore not trending.
We enter the market short at YM 12630, expecting another downmove to the lows of the day after lunchtime is over.
The red long range candles support our weak view of the market
and we cover our position for a +30 point profit at 12600.

[IngoPan]

Around lunchtime, markets retraced from their am session highs.The Nasdaq100 Index NDX even made a new lod, creating a quite bearish scenario for pm session trading.
http://www.sentiment-traders.com/ndx14207.png
Adding ADVV/SVOL into our market view, creating a completely different, very bullish scenario. SVOL and ADVV did new highs during lunch without any major retracement.
http://www.sentiment-traders.com/advv14207.png
http://www.sentiment-traders.com/svol14207.png
Hoping that market will follow its bullish sentiment, we bought the YM future at 12665, anticipating a power up to the highs of the day. We closed the position near cash close for a +20p YM profit.
http://www.sentiment-traders.com/ym14207.png

[IngoPan]

More to come tomorrow.

[IngoPan]

sentiment trader´s trade as of 4/11

The ADVV indicator opened positive and had up momentum till 10:30 am. Around 10:30 we noticed a steep decline in ADVV which made the YM future selling by 30 points. Around 1pm ADVV made no lower low and. Additionally ADVV wasn not trending since opening. This made us buy the YM future at 12625, anticipating a strong upmove from the ADVV <-> Market divergence. While ADVV is staying in the positive, YM is in negative. We expect YM to follow the advancers volume.
After lunchtime, the market found some buyers around recent lows. We sold YM at 12645 for a +20p profit.

[IngoPan]

http://www.sentiment-traders.com/advv290507.png
http://www.sentiment-traders.com/svol290507.png
http://www.sentiment-traders.com/ym290507.png

[IngoPan]

http://www.sentiment-traders.com/advv290507.pnghttp://www.sentiment-traders.com/svol290507.png
http://www.sentiment-traders.com/ym290507.png

[IngoPan]

http://www.sentiment-traders.com/advv290507.png
http://www.sentiment-traders.com/svol290507.png
http://www.sentiment-traders.com/ym290507.png

[IngoPan]

http://www.sentiment-traders.com/advv290507.png

During lunchtime, we saw a sharp decline in the futures accompanied by a sharp drop in ADVV/SVOL.
Around 14:45, ADVV stopped trending down, right a bit below the 0 line. The YM future ADVV completed a double bottom 20p around 14:30 and we looked forward to buy the break of the 0 line in ADVV, which is, beside the bullish double bottom in the YM future, considered to be a bullish setup, too.

http://www.sentiment-traders.com/ym290507.png

We bought the YM future at 13510 with a stop of 20p. After lunchtime, the market found upside momentum again, making higher highs (HH&#180;s) and higher lows (HL&#180;s). We sold the future around cash close at 13550 for a 40p low risk profit.

[metamp]

Much appreciated ......thanks

[pat255]

Ingo can u post some explanation on Advv & ADvvr the ratio & how do u use it ..with example if u can...thks

[pat255]

Ingo could U pl post a recent setup that is based on the ratios,,Also do u use 5 min chart for setup or lower timeframe for the setup ..thks

[IngoPan]

Ingo could U pl post a recent setup that is based on the ratios,,Also do u use 5 min chart for setup or lower timeframe for the setup ..thks


To trade off ratio + advv, i use 1 and 5 min charts ( for intraday).