The Price and Volume Relationship

Chart 1. For those of you who know me, I have compiled studies (tables of the market states and changes) based on every market cycle from 2003 to now on what happens to price in a rally or uptrend, when the market is under pressure, and when the market is in a full blown correction. What I have found from analyzing and compiling data from IBD Investors Business Daily (Full Credit) is that when volume spikes on periods of heavy selling and those clusters of selling pressure have been on higher volume seem month for the same week and they happen with force it precedes a correction. In this recent month on the chart there are four blue arrows at the bottom that show the days when the candlesticks were red and long and have higher than average volume in fact they have mini-spikes. In context to the days when the market took off from July 10 to the all-time highs they happened on lower volume granted it is summer but still it had some trouble within the 10 point range of 2470 and 2480.5 and there are wicks above and wicks below showing a lot of indecision and consolidation. The trendline below is in yellow and it completes what looks like a diamond formation, in this case possibly a diamond top. And this whole chart pattern formed the day before Non-Farm Payrolls Friday. Chart 2 The EUR/USD spending a lot of time right below 1.19 in this two hour chart and is waiting on further direction tomorrow as well, the trend is intact and sellers were only acting with a lot of force above 1.19, but it is anybody's guess as far as climax, because the move was a monster one and I would have loved to participate in it more if I did not believe it was so expensive. I'm not going to fight the crowd Chart 3: the yen has been stronger across the board with the crosses currencies NZD, AUD, etc. and I'm just managing some winning positions being that middle of a longer-range it can still drift lower 109.50. Below I have the green box between 108.50 and 109.00 so there's still more room to run, even though I do not want to make a judgment before the numbers get released tomorrow.