charts for week of aug (16-20), page-10

sorry shareholder won't happen again :)

" ... Just wondering if you could clarify what you mean by 'a test of that volume', are you referring to a low volume day following the sell off (i.e. with relatively higher volume)? "

yes Jim you have it correct, the testing is really a test of the supply that had been present in the recent bars that being whatever timeframe you may be working.

after a sell off (panic selling from the weak holders) the smarter money will step in and absorb the supply (selling) because they see it as now being of value and their buying may stop the selling or may only pause the selling before it starts again.

now the testing is a sign to them that the selling has stopped for that period and it's now okay to move the price because really they don't want to move the price back up if they still have to buy (from the selling weak holders), why buy at a higher price, they are also really just waiting to remove as much of the floating supply that is around in the timeframe they are working in as well

you may not see a test on whatever timeframe you are working in but it is always a good idea to work in multiple timeframes as you have a better chance or idea of what is going on. for example if I scalp intraday I always work with 3,7,15min bars and what I do there is wait for the strength/weakness to start to turn up on the 15min and then pan down into the 7min for confirmation of either a test or its opposite, likewise when working on bigger timeframes like the daily I always start with the bigger timeframe now being the weekly and then pan down into the daily for confirmation of your entry/exit, sorry about waffling on Jim but hopefully it has made things or confirmed your thoughts of what is happening around a test