...if increased volume comes in on a dip lower (any dip lower....first, second, third,,,,), AND price responds positively to that increase in volume, and moves above an important level (to prove there is 'intent'). Then I would expect that the increased volume was Buying, and where there is buying there is usually Price Support and Defence, against supply as price is Marked Up.
ETF's often follow a single asset, or a single asset class (or sector), and this causes their charts to regularly show exaggerated price moves.
Price will regularly pierce deeply into levels where support or resistance is reasonably expected to be. This can make price appear to breakout or breakdown, but then the support or resistance eventually comes in as expected.....and they don't.
To me, the reasons why this occurs is because most of the market all take one side together, depending on whether the market finds the asset favourable or not, at the time. This pushes prices up further than they should probably go when there is a positive 'buzz in the market', and down lower than they should probably go when opinions become negative.
Yep, post away, I'll answer when I can......or someone else might.....
I've not heard Dr Gary put a fixed limit on the number of thrusts (up or down), although I generally understand the reasoning.
Personally I let the chart do the talking, and just follow what is says will likely happen. For me this is because just as often the opposite happens :- eg.- after repeated thrusts higher, especially when price is up against a potential resistance line. Half the time the resistance will absorb all the demand at that level and cause a price failure (actually what really happens here is price pulls back in an attempt to remove the supply, and it appears to be a price failure at the time, but it is all part of the normal "attempt to remove supply process"), and the other half of the time will see the resistance weakened with each thrust up against the line, and eventually the resistance is weakened to the point where price breaks through (and what is really happening here is the sellers at that level have had all their supply absorbed (bought), and with very little selling pressure now at that level, price pushed through with ease).
