Last Week's TNA Action & Volume

TNA gapped down below the trendline on Wednesday August 25th. This followed a low volume upthrust towards the end of the prior trading session. The first bar was a stopping (high) volume bar. Here's some quotes: ...during a reaction, prices will start to resist further down-moves. These resistance areas are frequently seen on a down-day, on very high volume, closing on the highs.This action changes the direction of the move, or causes the price to go sideways, away from its original downward direction, showing that professional money has stepped in and has taken an opportunity to accept the selling – usually from weak holders. The professional money has to accumulate stock and encourage other traders to part with their holdings – sharp down-moves will encourage this. Any low volume test after this event will be a sign of strength. Stopping volume can be compared to a downhill skier who, as he finishes his long run, has to stop by turning the skis sharply. This is spectacular, throwing up plenty of snow, which eventually stops him. The stopping volume was followed by absorption 28 minutes later and then TNA ran up.
The lower chart looks at the latter half of the day in more detail. Stopping volume occurred again in the 12:34 PM period. This was followed by sideways motion=consolidation=testing supply. Note the flattening of the MAs, low absolute CCI values, small AO & KH teeth, flattening of the TSI & Demarker and bottoming of the CSI. Here are some Testing Supply quotes from the ebook: http://www.tradeguider.com/mtm_251058.pdf
The professional trader knows that given enough time (with bad news, persistent down-moves, even time itself with nothing much happening) the floating supply can be removed from the market, but he has to be sure the supply has been completely removed before trying to trade up his holding. The best way to find out is to rapidly mark the prices down. This challenges any bears around to come out into the open and show their hand. The amount of volume (activity) of trading as the market is marked down will tell the professional how much selling there is. Low volume, or low trading activity, shows there is little selling on the mark-down . This will also catch any stops below the market, which is a way of buying at still lower prices. (This action is sometimes known as a springboard).