from shaws morning notes, page-44

A No Demand bar is one which the smart money & the market in general show they no longer want higher prices in the short term.

If the retail market want to mark the SP up, the smart money will take no part in the rise, and sell into it if it goes into their distribution zone.

It is shown by lower volume than the previous two days and narrow spread, closing halfway down the bar or lower, confirmation is seen the following day, when the SP falls further.

It shows short term weakness.

It will be interesting to see just what happens with the SP over the next few days.

Under normal trading conditions, you would expect the SP to maintain this level (or slightly higher) for a few days, then move down to retest the supply (and the bottom of the trend channel), and when a low volume test is successful (showing there are very few sellers left at this price) the SP would then move up strongly, and a distribution would take place, completing the cycle.

But Exco is not normal anymore I guess (at least not for the next few months), the situation Exco is in now doesnt happen that much, so the SP may not move in the expected ranges.

I guess it's possible that the SP could just move forward in small increments each day for a while.

When the SP gets to the top of the trend channel and moves into the area the SP rose strongly into on the day of the announcement, I expect there might be some trapped holders, who bought at those high levels and may want to get out without a loss, so this could be an area of strong supply.

Normally to get through this type of area easily, the smart money would gap the SP up through it, in the hope that holders will be convinced to continue holding, with the prospect of higher prices on offer in the short term.

Good times for market watching ahead.


cheers