Most Traders Miss Volume's Real Message

High volume doesn't mean up. High volume means commitment.

Most traders see big volume and immediately think "bullish momentum." That's amateur hour thinking that'll get you chopped up faster than you can say "breakout."

Here's what volume actually tells you: commitment levels. When I see massive volume, I'm not asking "which direction?" I'm asking "who's fighting harder?"

The Three Volume Personalities Every Trader Must Know

After years of watching volume patterns, I've boiled down volume behavior to three categories that'll change how you read every chart:

Flat days on high volume = Battle
Hard-fought war. Bulls and bears throwing everything at each other. Nobody wins, but everyone's committed. These setups are dangerous because when someone finally breaks, the move is violent.

Flat days on average volume = Balance
The market's saying "yeah, this is fair price." Very quiet, agreeable marketplace. Just equilibrium doing its thing.

Flat days on light volume = No one showed up
This is what we're seeing right now in the SPY. We're barely at 50% of normal volume halfway through the day. People are afraid. They don't know what to do with the jobs revision data.

Here's the kicker: with just a slight volume bump, this market could explode in either direction.

The Volume Envelope System That Spots Real Breakouts

I've built a simple envelope system using a 10-period moving average with 50% above average as the upper band. When volume hits that upper band, you've got 150% of normal volume - serious commitment behind the move.

Here's a look at the chart I posted today in the TheoTrade Live Chatroom:

Watch how it called gold's massive breakout:

First resistance touch: Below-average volume = predictable failure
Second approach: High volume but no break = sellers defending
Final breakout: 200%+ volume = barrier destroyed, trend continues

Gold sustained higher-than-average volume pushing higher. That's structure saying the move isn't done. Protect profits at key levels, but don't bet against volume-backed momentum.

The Action Plan for Volume-Based Setups

For breakouts: Wait for 150%+ volume confirmation. No volume, no breakout. Period.

For flat markets: Identify which volume personality you're dealing with. Battle? Stay away until someone wins. Balance? Look for continuation. No-show? Prepare for volatility.

For trend continuation: You don't need high volume on bounces. Average volume maintains trends. Above-average volume on pullbacks = buying opportunities.

Why This Beats Your Indicators

Every indicator you're running is based on price action that already happened.

Volume tells you about the conviction behind price action as it's happening.

The market will always tell you what it's thinking.

You just have to listen to the right conversation.

Stay Sharp,

Blake Young

Don's going nuclear on Wednesday

He's dropping the timing system that won $230,000 in a courtroom.

Not some feel-good trading story. Real money. Real case. Real system.

The same signals he used to convince a judge and jury are the ones separating winners from the walking wounded in this market.

Here's what you'll see:

The exact timing intel that lawyers paid six figures to understand

When retail money turns into smart money (and how to ride the flip)

How to stop getting your face ripped off by terrible timing

Most traders think timing is luck.

It's not.

There are invisible clocks running this market. The pros see them. You don't.

That's about to change.

Shadow Clocks with Don Kaufman
Wednesday, September 10 | 1 PM ET

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Fraud Territory: Major Jobs Data Exposed + China Tech Explosion

Gianni drops a bombshell about the recent jobs revision going "well beyond margin of error and entering fraud territory" while revealing his bullish pivot to Chinese tech ahead of Fed cuts.

Plus: Why he believes the AI bubble critics are dead wrong, his bold call on precious metals forming 2025 highs, and the rotation play within the Magnificent Seven that could power markets higher. Don't miss his shocking take on how the market has been "misled" by the data.

WATCH NOW

🎯 Levels & Triggers

SPY

Recent resistance failure came on higher-than-average selling volume, signaling weakness.
Current bounce is occurring on light volume — only halfway to average by midday.
Interpreted as a lack of conviction in any bullish upswing.

IWM

Currently overextended/overbought.
Bearish structure idea: Sept 19 put vertical → Buy 235 put / Sell 233 put.
Trade pricing: debit around 0.78 for a $2-wide spread.
Math: requires 39% win rate to breakeven, while market-implied probability is 42%.

This equates to a 3% statistical edge in favor of the trade.

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