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This Week's Lesson: Friday, October 24, 2014
Volume Always Precedes Price

The on-balance volume has long been his favorite indicator, and here, MoneyShow's Tom Aspray details a variation he has developed that can warn of longer-term tops and bottoms.

This statement is one of the cardinal beliefs held by most technicians. It first came to my attention in the late 1970s when I read Joe Granville's book New Strategy of Daily Stock Market Timing for Maximum Profit, where he wrote “stocks do not rise in price unless demand exceeds supply. Demand is measured in volume and thus volume must precede price.”

In the early stages of my career, I did extensive testing of this concept and developed my own methods of interpreting the on-balance volume. It is the volume indicator in which I have the most confidence. Over the years, I have explored the OBV in more detail and last year discussed multiple time frame analysis of the OBV in The Best Volume Indicator.

In that article, I discussed the long-term bottoming and topping formations in the OBV and why the relationship of the OBV to its 21-period weighted moving average can be so important. I touched on the bullish and bearish setups that I have often observed with the OBV, which is the focus of this week's trading lesson.



Alejandro Zambrano
Don't Get Short Sighted by Market Volatility TIPS FOR TRADERS
Alejandro Zambrano, of, thinks that—while market swings do complicate trading&mdas;they can also be advantageous for the trader who can keep his emotions in check. Here, Alejandro offers some suggestions on how to become a more emotionally stable trader.

Thomas Aspray
Four Best Bets in Tech Trading Lesson
Many of the best performing stocks in 2014 have been in the tech sector, and MoneyShow's Tom Aspray thinks intermediate-term analysis of two tech ETFs and two stocks will help determine if they're likely to continue as market leaders.

Conservative vs. Risky Option Strategies VIDEO NETWORK
Option expert Michael Thomsett talks about conservative option strategies, as well as what he considers as the riskiest option strategy that traders should avoid.

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