Market tops are not a point. Wyckoff's Distribution pattern is well-established in market lore as the unwinding of bullish exuberance.
A massive face-ripping runup in Phase A accumulation leads to a blowoff top which we saw in April >May with Buying Climax (BC).
The unsustainable bullish move ends in an Automatic Reaction (AR), or rejection of the ATH. The depth of the AR forms a support line for the Trading Range (TR) of the Phase B cycle in distribution.
What is distribution? It's the systematic unloading of huge positions by 'smart money' institutional investors selling to the rest of us, soon to be bagholders for the big players.
The AR after ATH leads to a Secondary Test (ST) which is typically slightly lower than the ATH. A series of dumps and pumps follows within the TR established by the AR bottom price after ATH.
During Phase B there is expected a Sign of Weakness (SOW), which may be a deep selloff or series of selloffs, followed by a further upthrust after dsitribution (UTAD), which can exceed the BC ATH, or form a double top.
UTAD rapidly suffers a sharp reaction and produces a further SOW which often ends in another ST to the Last Point of Support (LPSY). NB: LPSY marks the end of Phase C in distribution, beyond which further advances are not to be expected. After LPSY price enters MARKDOWN PHASE D.
It is impossible to predict the exact form of every top. Some have multiple upthrusts and SOWs. Typically there may be three thrusts, these can form a series of lower highs, a Head and Shoulders pattern or a Three Drives pattern in which the ATH occurs at end of Phase B and marks entry to phase C at LPSY. Sometimes there is only a Double Top.
This theory CANNOT PREDICT THE FUTURE but is very useful in understanding that you are about to be taken to the cleaners and be left holding the BAG.
NB: Wyckoff Rule 1: The Market and Individual Securities Never Behave in the Same Way Twice!
Rather, trends unfold through a broad array of similar price patterns that show infinite variations in size, detail, and extension. Each incarnation changes just enough from prior patterns to surprise and confuse market participants.
Rule 2: The Significance of Price Movements Reveals Itself Only When Compared to Past Price Behavior: Wyckoff described a 'Composite Man' who moves price according to his own interest. Today's PA is a result of the price moves of previous days, weeks and months. Composite Man consists of all the institutions, traders and participants all ganged up against YOU! Composite Man's prime motivation: taking YOUR money.
Wyckoff Theory: marketcalls.in/price-action/understanding-wyckoff-accumulation-and-distribution-schematic-a-study-of-stock-market-behavior.html
A massive face-ripping runup in Phase A accumulation leads to a blowoff top which we saw in April >May with Buying Climax (BC).
The unsustainable bullish move ends in an Automatic Reaction (AR), or rejection of the ATH. The depth of the AR forms a support line for the Trading Range (TR) of the Phase B cycle in distribution.
What is distribution? It's the systematic unloading of huge positions by 'smart money' institutional investors selling to the rest of us, soon to be bagholders for the big players.
The AR after ATH leads to a Secondary Test (ST) which is typically slightly lower than the ATH. A series of dumps and pumps follows within the TR established by the AR bottom price after ATH.
During Phase B there is expected a Sign of Weakness (SOW), which may be a deep selloff or series of selloffs, followed by a further upthrust after dsitribution (UTAD), which can exceed the BC ATH, or form a double top.
UTAD rapidly suffers a sharp reaction and produces a further SOW which often ends in another ST to the Last Point of Support (LPSY). NB: LPSY marks the end of Phase C in distribution, beyond which further advances are not to be expected. After LPSY price enters MARKDOWN PHASE D.
It is impossible to predict the exact form of every top. Some have multiple upthrusts and SOWs. Typically there may be three thrusts, these can form a series of lower highs, a Head and Shoulders pattern or a Three Drives pattern in which the ATH occurs at end of Phase B and marks entry to phase C at LPSY. Sometimes there is only a Double Top.
This theory CANNOT PREDICT THE FUTURE but is very useful in understanding that you are about to be taken to the cleaners and be left holding the BAG.
NB: Wyckoff Rule 1: The Market and Individual Securities Never Behave in the Same Way Twice!
Rather, trends unfold through a broad array of similar price patterns that show infinite variations in size, detail, and extension. Each incarnation changes just enough from prior patterns to surprise and confuse market participants.
Rule 2: The Significance of Price Movements Reveals Itself Only When Compared to Past Price Behavior: Wyckoff described a 'Composite Man' who moves price according to his own interest. Today's PA is a result of the price moves of previous days, weeks and months. Composite Man consists of all the institutions, traders and participants all ganged up against YOU! Composite Man's prime motivation: taking YOUR money.
Wyckoff Theory: marketcalls.in/price-action/understanding-wyckoff-accumulation-and-distribution-schematic-a-study-of-stock-market-behavior.html
Trade ist aktiv
SOW continues on bearish news. Futes point lower after EOD meltup, lol. This SOW may find support around 7300 for a bear flag rally, perhaps another TACO trade; LPSY might be ~7420 looking back at supports. Index likely to enter bear market in Phase D going into Sep>Oct (the usual time of weakness); the meltdown will be marked by fierce panic selling.
NB: There is an open initiation gap at 6620 which will almost certainly fill in Phase D. Do not get FOMO!
Anmerkung
Closed under 20 MA, intraday rally failed. Expect another try to get up before further distribution.Anmerkung
Here's the countertrend move, starting out anyway. Consolidation will cause moody price swings for a week until it breaks up to LPSY. August could be bloody Red imo.Anmerkung
Gosh where did the rally go? QQQ surprised me, it faded hard EOD; SPY not so much.Still looking for lift to LPSY, wait and see what happens when RSI goes oversold.
Very very tricky to trade these distribution phases, just when you think; "It's for sure going down!" Up and away it flies again. Be careful!
Anmerkung
SOW in progress... do not FOMOAnmerkung
Above noted; "Be careful!" LOL will this rally be LPSY? It is a downtrend, short the rallies.All DJT news is Fake... he put on the TACO trade again today.
Anmerkung
Wow that rally was a flash in the pan... could be setup for a move higher, LPSY ~7500; all out, jw. Bearish! Short the rallies :-)Anmerkung
SOW provoked a fierce Bear Rally to LPSY, spike on Fri AM tapped the last support. Shorting in SQQQ, SPXS; GLTA!
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Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.