Several Ways to Profit from MarketVolume (MV) Services

MarketVolume's services were developed for trading the derivatives of the major US indexes and exchanges. Their analysis is based on intraday volume and is currently the most advanced method of market timing currently available anywhere.

No matter what trading style you prefer, you must always follow the general market trend determined in MarketVolume's Market Stage.

Straightforward Buy and Sell Signals for QQQQ trading

These signals were designed to satisfy the demands of mid- and long-term QQQQ traders who want to only make 10 to 20 conservative trades during the year, but still make a good return.

They offer two types of ETFs (QQQQ, SPDRs and DOW) signals:

Second Method of Making Money

Long-term traders who want to conservatively trade indexes and index derivatives would be best suited for this method. Only 5-10 conservative trades per year are needed to follow this trading method, and no quantitative analysis need be done!

All you need to do is follow the Market Stage section of the Market Commentary, where you will find what the long-term trend is for all the major indexes

Third Method to Make Money

Mid-term traders who want to trade indexes and their derivatives can follow this method and only make 5-10 trades per month. For this method of trading you don't need to perform much analysis of our charts, but it is suggested that you do pay attention to them and at least take a look at them once a day.

To follow this method of making money you can use MV's chart of VMA spikes to determine mid-term correction points. You can also use MV's Market Stage for general trends and the Market Status for mid-term trends.

Forth Method of Making Money

This method is geared towards short-term active traders who want to trade index derivatives and make approximately 5-10 trades per week.

To follow this method of making money we suggest that you keep track of our volume charts on an intraday basis and learn to analyze volume on your own. Of course MV's Market Commentary can be used to supplement your trades, but we highly suggest that active traders learn to analyze volume on the fly

Fifth Method to Make Money

Mid and long-term players who want to trade QQQQ shares or any NASDAQ 100 index derivative, such as options or futures, can take advantage of our ETFs (QQQQ, SPDRs and DOW) Signals! You'll only need to make about 10-20 trades in a year!

All you need to do is log onto the site once a day and check our updated QQQQ Signals. Call your broker and place an order based on our advice! The main advantage to this system is that you don't need to learn any complicated timing systems in order to profit from QQQQ trading.

1.74 How to make money using our Market Commentary?

For mid-term traders you must keep track of both the Market Stage and the Market Status sections of the Market Commentary. Since mid-term traders are interested in time-spans of about a week or two, it is important to know what the daily fluctuations and mid-term movements might be. Therefore we suggest that a mid-term trader also keep track of our Volume Charts on at least a daily basis in order to understand where the market might move in the next few days.

For mid-term traders it is still important to know what the general market trend is, as you don't want to trade against the market if you plan on holding your position for more than a day. We recommend that during Resistance and Support Corridor stages, you close open positions and stay in cash due to increased market volatility during this period.

We suggest that before making any trading decisions you compare our Market Status with the results of your analysis. Analysis can be divided into two stages. 15-day and 30-day intraday charts with a 120-minute Volume Moving Average (VMA) are excellent for general mid-tern analysis. 5-day charts with a 60-minute VMA are also excellent for analysis of particular volume spikes. Large VMA spikes will show you when institutional traders are buying and selling.

You do not have to spend every day in front of your monitor analyzing charts and waiting for signals. It is often enough for a mid-term trader to spend just a short time before or after the trading day by analyzing volume behavior for the past day. After you have found the levels of volume that you think could cause the market to make a mid-term directional change, all you need to do is set an alert for volume or price and you will be notified once that level has been reached.

This example shows the basis of MV's analysis. Traders can see in our charts the relationship between the index price and the Volume Moving Average.

The above chart was extracted from our JavaVolume Charting technology. These charts enable you to predict future market movements and trends by giving you access to real-time volume and index data, which include a volume moving average, index moving averages, up/down volume, the ability to draw trendlines directly on the chart, as well as many other features no listed here.

Above you can see the mid-term relationship between price and volume. An increase in volume subsequently affects the movement of price, causing it to change direction.

You can see that almost every time the Volume Moving Average peaks, the index reacts. One can make many profitable trades knowing this.

The blue line in the chart is a trend of Volume, which we call the Volume Moving Average (VMA).

1.75 NASDAQ 100: For Long-Term Traders

This example shows the basis of MV's analysis. Traders can see in our charts the relationship between the index price and the Volume Moving Average.

Above you can see the long-term relationship between price and volume. An increase in volume subsequently affects the movement of price, causing it to change direction.

You can see that almost every time the Volume Moving Average peaks, the index reacts. One can make many profitable trades knowing this.

The blue line in the chart is a trend of Volume, which we call the Volume Moving Average (VMA).

1.76Nasdaq 100: For Short-Term Traders

This example shows the basis of MV's analysis. Traders can see in our charts the relationship between the index price and the Volume Moving Average.

Above you can see the short-term relationship between price and volume. An increase in volume subsequently affects the movement of price, causing it to change direction.

You can see that almost every time the Volume Moving Average peaks, the index reacts. One can make many profitable trades knowing this.

The blue line in the chart is a trend of Volume, which we call the Volume Moving Average (VMA).

1.77 The Power of the Head and Shoulders

A Head and Shoulders pattern (hereafter H&S) is a bearish reversal chart pattern that often marks the top of an uptrend and predicts a selloff in a particular index or ETF. The left shoulder and head are formed as the index is rallying and does not indicate anything bearish. However, once the neckline is formed on the right side of the head, that is our first warning point that the buying momentum has slowed because rather than setting a higher low on the previous rally, the index sells off all the way down to the prior low. When this occurs, people who bought near the top (the head) are now trapped in the long position. Then, as another wave of buyers attempt to rally the index, the people who are trapped long at the top sell into the rally in an attempt to just come close to breaking even. This weakens the index even more, which prevents the achievement of a higher high and also forms the right shoulder. This usually marks a break of the uptrend as the index comes back down once again and tests the prior low. At this point, everyone who bought on the left shoulder, head, and right shoulder are now trapped and out of the money in their positions. So guess what happens? They begin to sell, which causes a break of the neckline, which subsequently causes a rapid and often volatile collapse of the price due to selling momentum.

Although the most ideal entry point for shorting a H&S pattern can be debated, I prefer to enter after the right shoulder has been formed and starts back down to the neckline. If you enter before the right shoulder is formed, there is not enough confirmation that there really is a H&S pattern being formed, so you will often stop yourself out by shorting too soon. On the other hand, if you wait for the neckline to break before selling short, your entry price is not that great and can often result in getting shaken out of the position right before it cracks or missing the selloff altogether. However, by shorting after the right shoulder has been formed and the price starts coming back down, you are essentially selling into strength, which gives you a lower risk and higher profit entry point. If the H&S fails and does not follow through, your losses are also reduced because you shorted at a decent price. Remember that the goal of our trading strategy is not to squeeze every single dollar of profit out of a trade, but rather to catch a bulk of the profits with minimal risk.

When a H&S drops below the neckline (which is sometimes ascending or descending), the predicted sell-off amount is usually equal to the distance from the top of the head down to the neckline. So, if the price at the top of the head is $100 and the price at the neckline is $90, the predicted drop would be equal to $10 (100 - 90) below the neckline. Since the neckline is $90, the predicted sell-off is down to $80. This is a guideline you can use to determine a target price for where to take profits on a short setup.

Although H&S patterns follow-through a majority of the time, there are occasions when the pattern fails, meaning that it never drops below the neckline after forming the right shoulder. A failed H&S pattern occurs when the price rallies above the high of the head after forming the right shoulder. When the price rallies above the head, make sure you quickly cut your losses if you are short because the move is usually strong if there were enough buyers to propel through all that resistance and set a new high. After getting through the resistance of the H&S pattern, the failed short setup often becomes a great long play. Here is an example of a failed H&S:

One indicator you can use to assist in determining the probability of whether or not the H&S will follow-through is volume. As with every other type of chart pattern, volume is the most critical type of technical analysis, and this pattern is no different. Specifically, what we look for is lighter volume on the right shoulder than on the left shoulder. If volume on the formation of the right shoulder is significantly less than the volume that formed the left shoulder, it indicates there are less buyers to rally the index, which increases the probability of coming back down to test the neckline and eventually breaking below it. Conversely, increasing volume on the right shoulder is often a warning sign that the pattern may not follow-through and we will need to cover our shorts if the right shoulder ends up breaking above the head.

It is important to realize that the amount of time it takes an index or ETF to complete the breakdown of the H&S pattern is largely dependent on the time frame of which the setup occurs. For example, a H&S pattern that sets up on a 5-minute intraday chart will usually follow through and complete the selloff within a few hours. However, if you see a H&S on a sixty-minute chart, it will probably take several days or even a week to complete the predicted drop. A H&S on a daily chart will usually take weeks or even months to follow-through. Therefore, if you see a H&S pattern on a daily chart, it's typically not as easy as blindly going short unless you are the type of trader who can stomach volatility. If you short a H&S on a daily chart, you will probably stop yourself out unless you allow the setup a significant amount of time and price volatility before it follows-through. Because of this, we prefer to trade H&S patterns that occur on shorter time frames such as 15 or 60 minute charts. These make for ideal swing trades on the short side and are often the source of short setups for ETFs listed in The Wagner Daily.

There is a bullish variation of the H&S pattern that is called an Inverse Head and Shoulders pattern. This pattern is identical to the H&S pattern detailed above except that it is flipped upside down. The predicted move to the upside is also the distance from the head to the neckline, just like with a regular H&S. Here is an example:

Finally, let's put everything you have learned together to look at an actual chart of a H&S pattern where the neckline was recently broken.:

Now, here's a look at where the S&P (SPY) is exactly one week later:

After studying the daily chart of SPY (S&P 500 Tracking Stock SPDR) above, you will probably get a better understanding of why we have seen broad selling during the past several days. Whether or not SPY will see the predicted target of just under 81 is a crapshoot because the markets are oversold in the short term and due for a bounce within the next several days. However, the bounce could be shortlived. One thing is for certain though and that is Head and Shoulders patterns work!