npatz_2000

WYCKOFF - DISTRIBUTION OR RE-ACCUMULATION ON SPY

AMEX:SPY   SPDR S&P 500 ETF
834 9 8
This is an interesting time in the markets right now. This is a chart of the SPY             for the last 3.5 years. As anyone can see the S&P             has been in a nice uptrend without any violations of the current trend channel (white). The upward trend line in the middle of the channel (Aqua) has also been a line of support over the last 3.5 years, which price is at right now (plus added confluence of support at the Blue resistance turned support line meeting the Aqua uptrend line). We could see a higher high on a bounce off this trend line, but I think that even if we see this it will most likely be short lived and on "no demand" type volume . I think there is just too much weakness in the background evidenced by the higher highs on negative net volume as shown, plus the first increase in supply volume on the last correction (potentially an automatic retracement). This last higher high could also be the "head" in a head and shoulder pattern (AKA distribution phase). However, it is almost impossible to know if this is distribution or re-accumulation (a pause before another leg in the current uptrend). Either way I think we trade sideways for the next couple of weeks, at least. If this is distribution it could be months within a trading range between $185 and $210. However, that doesn't mean that I wouldn't take a small position on a valid long setup. Such as a break of the short term down trend line (Magenta) with confluence of Aqua and Blue support; or a break of a deeper down trend line with confluence at the bottom of the current uptrend channel (white). "DON'T FIGHT THE TREND"
ofirr39
2 years ago
Very Nice !

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ofirr39
2 years ago
npatz,
Did you the anomaly between last Friday huge Volume to the spread in the price. A lot of effort with little result. What do you say?
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ofirr39
2 years ago
Other perspective that i see is that on last two bottoms the buyers is getting more aggressive with rising volume.
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npatz_2000
2 years ago
Thanks ofirr39. I did notice that high volume small range day. Very bad sign for the bulls. Generally indicates weak money on the demand side and the smart money absorbing that demand by selling into them. However, I'm not spending much time on individual bar analysis. With that said, I do still scan for these high volume churn days and there opposite pattern, low volume with high range. Both ominous anomalies for the volume price practitioner. Related to question on volume at bottom, I measure volume in relation to previous highs and lows, not so much the actual bottom at the current low, since we never can be sure if it is the low until after we get a new high. Good luck. Nice talking to you.
+1 Reply
ofirr39 npatz_2000
2 years ago
Thanks,
What are the numbers that you put on the chart? What do they means?
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npatz_2000
2 years ago
They are OBV volume points that correlate to the peaks and troughs. The larger number is the absolute OBV number. The smaller number is the net OBV difference between this peak/trough vs. The previous peak/trough, comparing apples to apples.
+1 Reply
ofirr39 npatz_2000
2 years ago
What is the indicator name? Is it like weis Technic to measure waves?
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ofirr39 ofirr39
2 years ago
Do you know any indicator here that put volume on price , on the X bar? in order to identified support and resistance levels
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npatz_2000
2 years ago
The indicator is OBV (on balance volume), basically a cumulative total of volume, subtracting on down days and adding on up days. The total number is meaningless, IMO. It is the comparison of this number at different times that is the key, and that's how I use it. The weis wave here uses some form of reversal, that I don't know, but it's not a percent change like the weis wave sold by David weis, but is comparable, however it lags on larger reversal parameters than a simple percent change.
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