T-bond volume-price boxes and a withheld rectangle top

Sessions as volume-price boxes

Volume-price analysis reads each session as a box of price range versus participation to judge whether demand or supply is expanding. Price stays on the vertical axis, and each session's total contract volume is plotted on the horizontal axis, so the day appears as a volume-price box whose width is participation and whose height is the session range.

A tall, narrow box is interpreted as light volume and relatively easy price travel. A wide, short rectangle is interpreted as heavy volume with little price progress. The working premise is that volume usually expands when price travels with the prevailing trend, while light-volume countertrend sessions indicate the opposing side is not attracting participation.

Volume scale on this T-bond chart

The T-bond construction uses a volume scale of 25,000 contracts per horizontal unit. Night-session price and volume are excluded because those prints are typically disproportionately small.

January boxes and a short-term uptrend

After a three-session decline beginning 3 January 1989, the 6 January session reversed and closed at its high slightly above the prior three-day highs without a dramatic widening of the box. From 9 January through 12 January, boxes then narrowed on sideways trade and widened on the advance. That stretch was treated as a short-term uptrend while that volume-price relationship persisted.

A rectangle that is not yet a top

The 18 January session produced the largest volume seen to that point and a rectangular box. Price then held inside that range on lighter volume. A rectangle pattern is a multi-session holding area whose later resolution is judged by whether price leaves the range on expanding or contracting box width. A top was to be inferred only if sellers later pushed below the range on increasing volume.

Support and resistance are the recently defended lows and highs that define the rectangle. A break is confirmed only when the opposing side produces a wider box through that boundary.

February: support fails on a large box

On 8 February a narrow-range, relatively large-volume rectangle followed a light-volume rally off support. On 9 February price traded through support on a large box and closed on the lows, which was read as a completed top and a downtrend.

The next four sessions made lower prices on shrinking boxes, treated as an oversold pause rather than expanding supply. The 16 to 21 February bounce stayed light-volume with clustered closes, so demand was still judged weak and the downtrend intact.