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Dancing with the Trend: Distribution in progress?


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#1 dTraderB

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Posted 12 June 2018 - 09:01 PM

Bulls grinding it higher; may be boring but quite effective, so far, as the next swing high is a few points away. My VIX and VXX daily are still on a BUY (SPX sell).

 

Interesting analysis at the link below:

 

The term used to identify market bottoms is called accumulation and is usually very dramatic and quick.  Sometimes only one bottom spike, sometimes more, but they are generally easier to identify; certainly so, more than distributions.  I need to close on the note that the current market could easily be setting up a period of distribution with its big up and down moves and volatility.  Could we have seen the top?  Is this a double top?  What is going on here?  However, as a simple rules-based trend follower I do not have to make predictions; I just follow the model.  I do however feel the need to comment on what I see happening; this is not an easy market.

Dance with the Trend,

Greg Morris

http://stockcharts.c...stribution.html



#2 fib_1618

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Posted 13 June 2018 - 05:34 AM

The term used to identify market bottoms is called accumulation and is usually very dramatic and quick. 

 

For example, the lows of May 29th would fit such an occasion.

 

And as it pertains to important market tops, there is ZERO "distribution" going on at this time.

 

Fib


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#3 dTraderB

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Posted 13 June 2018 - 11:48 AM

I don't see this rally continuing into next week. 

 

But, I could be wrong. 



#4 fib_1618

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Posted 13 June 2018 - 01:08 PM

I don't see this rally continuing into next week.

 

At this point, there is enough fuel (investment capital) in the marketplace for the current advance to continue into the first week of July.

 

Any further fuel would push this time window out a bit more to pretty much the whole summer.

 

Fib


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#5 Waver

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Posted 13 June 2018 - 02:31 PM

Fib,

outside of the fact that has been the most recent low before this rally, was there anything to indicate back then that May 29th was an accumulation market low?



#6 fib_1618

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Posted 13 June 2018 - 04:30 PM

outside of the fact that has been the most recent low before this rally, was there anything to indicate back then that May 29th was an accumulation market low?

 

There were many...some excerpts from the 5/29 chat:

 

2018-05-29 16:07:10 fib1618: checking the BETS
2018-05-29 16:07:44 rite01: +25?
2018-05-29 16:08:29 fib1618: strange...AMEX was UP today
2018-05-29 16:08:54 rite01: I saw that
2018-05-29 16:09:31 fib1618: +25
2018-05-29 16:09:43 fib1618: so still on a hold
2018-05-29 16:09:47 fib1618: let me check the data
2018-05-29 16:09:58 fib1618: 😉
2018-05-29 16:10:20 fib1618: well...for such a terrible day price wise
2018-05-29 16:10:25 fib1618: breadth was stellar
2018-05-29 16:10:36 fib1618: 1234/1732 on the NYSE
2018-05-29 16:10:50 fib1618: 1121/1827 on the NASDAQ
2018-05-29 16:11:14 fib1618: smells like specialist accumulation

 

2018-05-29 16:30:13 fib1618: OK...then let's get started
2018-05-29 16:30:56 fib1618: the NYSE CO breadth MCO continued lower today
2018-05-29 16:31:16 fib1618: but in spite of the loss of 1.52% in the NYA
2018-05-29 16:31:36 fib1618: the CO MCO still remains above its recent lows of early May
2018-05-29 16:32:37 fib1618: even more interesting is that the CO MCO closed today right on the rising bottoms line connecting the February and March lows
2018-05-29 16:33:49 fib1618: so with today's gap lower below this same rising bottoms line on the price chart
2018-05-29 16:34:01 fib1618: we now have a non confirmation
2018-05-29 16:34:26 fib1618: and we usually will see prices rebound sharply as a result
2018-05-29 16:34:57 fib1618: if that wasn't enough
2018-05-29 16:35:22 fib1618: the NYSE Composite breadth MCO only declined 7 data points today to a -5 reading
2018-05-29 16:35:38 fib1618: this then tells us that the broad market did NOT sell off
2018-05-29 16:35:50 fib1618: but several highly weighted issues did
2018-05-29 16:35:56 fib1618: which sector(s)? don't know
2018-05-29 16:37:24 fib1618: so today's sell off was more technical (and/or emotional) than anything longer lasting as we are right up against natural resistance right now on the NYSE Composite breadth MCSUM at the +500 level
2018-05-29 16:38:00 fib1618: and though the NYSE MCO components are on a negative crossover now
2018-05-29 16:38:08 fib1618: they still remain above their zero lines
2018-05-29 16:38:31 fib1618: so this is more of a corrective sequence than anything else

 

2018-05-29 17:03:45 fib1618: last week's weakness in the Dow breadth data was a telling sign
2018-05-29 17:04:09 fib1618: and now the Dow breadth MCO is highly "oversold"
2018-05-29 17:05:02 fib1618: the MID breadth MCO remains in a bottoms above bottoms configuration
2018-05-29 17:05:12 fib1618: and just like the NASDAQ
2018-05-29 17:05:21 fib1618: the SML breadth MCO remains above its zero line
2018-05-29 17:05:32 fib1618: with the components still on a crossover buy signal

 

2018-05-29 17:21:57 fib1618: one thing's for sure
2018-05-29 17:22:02 fib1618: we have a big mess now
2018-05-29 17:22:10 fib1618: and from that
2018-05-29 17:22:25 fib1618: prices are likely to chop around without any direction for the next couple of days
2018-05-29 17:22:36 fib1618: unless the buyers come in with both hands on Wednesday
2018-05-29 17:22:49 fib1618: my my
2018-05-29 17:22:53 fib1618: NYSE TRIN at 1.95
2018-05-29 17:23:09 fib1618: Open 10 now deeply "oversold" at 1.33
2018-05-29 17:23:33 fib1618: seems like the shorts are about to get their heads handed to them
2018-05-29 17:23:53 fib1618: NASDAQ TRIN at .90
2018-05-29 17:23:59 fib1618: Open 10 at .91
2018-05-29 17:24:03 fib1618: neutral

 

There were other whispers on this as well and, of course, personal experience with how stocks are merchandised on the exchange..

 

Fib


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#7 dTraderB

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Posted 14 June 2018 - 07:20 AM

Thanks, FIB. 

I am not ruling out a new all-time high in 2018 but post-midterm elections, into December 2018. 

 

It all depends how the market assimilates the new interest rate environment and the unstable political domestic and international environment. 



#8 fib_1618

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Posted 14 June 2018 - 12:22 PM

It all depends how the market assimilates the new interest rate environment....

 

Maybe the chart shown below will provide the insight you're looking for in this area as it directly pertains to gross liquidity in the system.

 

The other part of your sentence are just distractions to take your focus away from what really drives stock market prices.

 

Fib

 

boombust061418.png


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#9 12SPX

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Posted 14 June 2018 - 12:49 PM

Sorry I see little correlation for liquidity especially since 2012.

 

It all depends how the market assimilates the new interest rate environment....

 

Maybe the chart shown below will provide the insight you're looking for in this area as it directly pertains to gross liquidity in the system.

 

The other part of your sentence are just distractions to take your focus away from what really drives stock market prices.

 

Fib

 

boombust061418.png

 



#10 fib_1618

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Posted 14 June 2018 - 01:30 PM

Sorry I see little correlation for liquidity especially since 2012.

 

Then we'll put you in the "maybe not" column.

 

Fib


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