Assessing and Identifying Trends
To be able to assess an anticipated major trend, it must be recognizable that such speculative transactions such as the volume / open interest increases during the life of a self reinforcing trend in the market. The prevailing market bias is a trend following market which means that the longer the trend persist; the stronger the sentiment becomes the breath of the market.
It becomes an established trend that has to run its full course of path until such time that the market becomes self-reinforcing. When such process has achieved its objective , the opposite direction may well take place after the full leg has taken place. The cross over points would have been achieved and a possible exhaustion can take place. A similar action has taken place like the price comparison and the current major trend of the US Dollar collapsing on the last weeks' closing of the month of July 2009 as a much clearer example.
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