lionel,You seem to have a grasp of VSA (volume spread analysis)...

lionel,

You seem to have a grasp of VSA (volume spread analysis) already.

I have only been studying this for a few months myself, there are a couple of guys on HC that are seasoned traders in VSA and are steering some of us who have shown an interest, in the right direction.

A few things you need to know first, the SM will only buy on down bars, that way they can hide there trades, so when there is supply present, if the price is attractive to them they will absorb that supply.
This way it is hard to see their fingerprints on the chart although the giveaway is the higher than average volume, they cant hide that.

The opposite is true when they are distributing (selling), it will be only on up bars, and at a level that will not bring the market down, at times when they are distributing over a period of days they will support the SP at times, to keep the punters interested, while they continue to sell to them.

If the price on offer is not attractive to them they will not participate in the market, as they know a market without direction for a period will concern some weak holders, who may lose patience and offer their shares for sale.

You are right in saying that todays low volume bar could be seen as bullish, in isolation, as the SM always take the path of least resistance.
What you have to also take into consideration though, is the background to the bar you are looking at.
We now have weakness in the recent background, with the selloff this week, so a "no supply bar" even on low volume, with weakness in the background cant be bullish.
Although you also need to watch the next bar or two for confirmation of that weakness, until you get that you cant be 100% sure.
Markets can change directions unexpectantly at times, and some times the SM will make a low probability event take place (because they can) if they can see a reward is in it for them.

I think the SM will not participate much in the Exco market short term, especially if the SP is trying to rise (unless the retail buyers can push the SP up to the highs of early this week, then they will sell into them again), without their participation the SP will find it very hard to sustain a meaningful rise.
They will let the market drift, and if the chance presents itself, they will "test" the market by quickly dropping the SP down a few cents, to see how much supply they can shake out (this can also trigger some stop loss points, and can also be a profitable excercise for them).

The SM have many tricks they can and do play to try to put the retal holders on the wrong side of the market, in the hope they will sell back to them at the right price.

They will not buy at any price just for the sake of it, although when something happens they can take an advantage from, they will.
If you look at the weekly chart, it would seem that the SP will fall for sure.
This weeks bar looks very weak and has be sold into heavily.

I'm sure the SM have a very healthy stack of Exco shares, but if the price on offer becomes attractive to them they will always buy more, no doubt about it.

cheers