Distribution on the stock market, next recession on the way?
Although it is very hard to distinguish the difference between re-accumulation and distribution without the volume indicator, I am leaning towards distibution.
When we look at the wyckoff accumulation and distribution charts, the DJI seems to look nearly identical to the Wyckoff distribution schematic #2 (source: school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_method )
When looking at technical analysis we can also see the following:
- Strong bearish divergence on 1M timeframe
This also seems be in line with the following fundamentals:
- Recessions usually happen in cycles of 8-10 years, which means a recession is to be expected (Source IMF: en.wikipedia.org/wiki/Global_recession )
- Record high in global debt
- Global economy slowing down
The estimated GDP growth in 2019 is estimated to be 2.6%, source: (worldbank.org/en/publication/global-economic-prospects )
- FED/ECB keep printing money which seems like a bottomless pit.
Trading plan:
Aggressive approach: If the DJI trades back into the range, it is possible to short with a stop loss above the previous high
Safe approach: short on a breakdown or a breakdown retest of the range low
When we look at the wyckoff accumulation and distribution charts, the DJI seems to look nearly identical to the Wyckoff distribution schematic #2 (source: school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_method )
When looking at technical analysis we can also see the following:
- Strong bearish divergence on 1M timeframe
This also seems be in line with the following fundamentals:
- Recessions usually happen in cycles of 8-10 years, which means a recession is to be expected (Source IMF: en.wikipedia.org/wiki/Global_recession )
- Record high in global debt
- Global economy slowing down
The estimated GDP growth in 2019 is estimated to be 2.6%, source: (worldbank.org/en/publication/global-economic-prospects )
- FED/ECB keep printing money which seems like a bottomless pit.
Trading plan:
Aggressive approach: If the DJI trades back into the range, it is possible to short with a stop loss above the previous high
Safe approach: short on a breakdown or a breakdown retest of the range low
My ideas are not meant for trading advice, always do your own research. Always be prepared for bull and bear scenarios
If my ideas were helpfull, feel free to donate here: 1Kufwyg8tq8s76SUfCPvCZUVgLxSha8UZZ
If my ideas were helpfull, feel free to donate here: 1Kufwyg8tq8s76SUfCPvCZUVgLxSha8UZZ
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