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Trendlines Broken

By Ilene
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Technical analysis of the market today, courtesy of Brian at Alpha Trends.

Trendlines Broken

The uptrend lines since this rally began have been broken today, the markets are below the flat/declining 5 DMAs and the VWAP* (purple MA) since the rally began is now coming into play. A bounce from these levels will give good indication as to the conviction of the buyers of the recent rally. Be very defensive.

 
Posted by Brian at 3/30/2009 10:53:00 AM
 
Note:   Volume Weighted Average Price (VWAP)
 
Consider a market maker with a day order to buy 1 million shares of a stock for an institutional customer. The market maker cannot just go in and buy the full position in the first two hours of the day and then leave his desk to go play golf. Market makers are evaluated by their customers for the quality of trade execution; did they get a fair price for the customer? The most common method of used to analyze the quality of a trade execution is to compare the price the order was filled to the Volume Weighted Average Price (VWAP). The VWAP is calculated by dividing the dollar volume of a stock by the share volume over a given period of time. Simply put, the VWAP is the average price that each share was executed over the period of time being studied. There are several ways to calculate the VWAP in RealTick, the analysis and trading software I use. I prefer VWAP analysis with a moving average, in particular for shorter term day trades on a one day chart of the equity I am trading.  Read more by Brian at Alpha Trends.

 

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