• Author / Uploaded
• Piet Nijsten

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The ABC’s of VSA: Signs of Weakness By Lauren Snedeker

Objectives for Today • Learn to read a chart and detect weakness in the market • Learn how Supply and Demand play a role in detecting weakness in the market • Come away with one clear VSA Principle in your mind

Supply/Demand $200

Price For Uggs Boots

Demand for Uggs Boots

# of Units

Supply in a Weak Market • In a Rising Market, look for a huge amount of Volume to appear • Volume = Selling orders by the Smart Money into a rising Market • The Signal is often Climactic Action or Supply Coming In or Buying Climax The Distribution Phase

What it looks like • Volume = Ultra High • Spread= Massive • Close = Mid to High • Trend = Up

The UpThrust • Up Bar

• Bottom Close

• Next Bar down to confirm signal

Smart Money Thinking • As the price rises, Smart Money sells into the market: to catch the Herd going long • As each order comes in one after another, it creates Ultra High Volume • When the volume disappears, they have dumped their supply and are not interested in higher prices = No Demand

No Demand What it IS: the withdrawal of interest by the SM in higher prices • Up Bar • Next Bar Down to confirm • Narrow Spread • Low Volume: the lower the better to show lack of selling by the SM

No Demand 1. It is a confirming signal of weakness 2. You need weakness in the background: Buying Climax, End of a Rising Mkt, UpThrust

3. You should be in a downtrend before shorting – downtrend implies weakness

No Demand: Serious Weakness

Why that worked Followed an UpThrust In a downtrend Serious weakness in the background: Potential Buying Climax three times No Volume

Confirmation at the 30 minute

Trap Upmove (Bar B) Based on two bars: 1st closes up off the highs 2nd widespread down bar closing near the lows 2nd bar’s high is higher than the 1st bar, tricking people into going long If low volume (no selling) & weakness in bkgrd it is a strong sign of weakness – can lead to a strong rally – Bar A = Weakness in Background

Failed No Demand

Why it failed • The volume was fairly high • The next bar closed up on higher volume • The Supply Coming In bar right before it had a lot of volume = a lot of selling to do before it can go down again • Not until the UpThrust and then the down bar on lower volume do you see the short

Conclusion • • • •

Weakness appears on an UP Bar Short when you are in a downtrend Use the UpThrust as the middle signal No Demand is a confirming signal of serious weakness behind you • Be Patient!!!!!!!

Special Offer • • • •

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• Email me after the webinar: [email protected]