Wycoff & Weed
Updated
Behold the darling of the MSOs, GTBIF looks to be building a textbook Wycoff bottom... I believe we are early-to mid phase B. Ignore the timeframes and pay more attention to direction, levels, and volume.
"Phase B: In Wyckoffian analysis, Phase B serves the function of “building a cause” for a new uptrend (see Wyckoff Law #2 – “Cause and Effect”). In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing shares at lower prices and checking advances in price with short sales. There are usually multiple STs during Phase B, as well as upthrust-type actions at the upper end of the TR. Overall, the large interests are net buyers of shares as the TR evolves, with the goal of acquiring as much of the remaining floating supply as possible. Institutional buying and selling imparts the characteristic up-and-down price action of the trading range.
Early on in Phase B, the price swings tend to be wide and accompanied by high volume. As the professionals absorb the supply, however, the volume on downswings within the TR tends to diminish. When it appears that supply is likely to have been exhausted, the stock is ready for Phase C."
What we're looking for here is the bolded... for smaller price spreads and volume on the downturn. A lower low (if it happens) will likely accompany the bottom falling out from under the economy, in which case it's a buying opp (along w/ everything else).
For now trade the range.
This ain't financial advice, just a reminder to use common sense.
"Phase B: In Wyckoffian analysis, Phase B serves the function of “building a cause” for a new uptrend (see Wyckoff Law #2 – “Cause and Effect”). In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing shares at lower prices and checking advances in price with short sales. There are usually multiple STs during Phase B, as well as upthrust-type actions at the upper end of the TR. Overall, the large interests are net buyers of shares as the TR evolves, with the goal of acquiring as much of the remaining floating supply as possible. Institutional buying and selling imparts the characteristic up-and-down price action of the trading range.
Early on in Phase B, the price swings tend to be wide and accompanied by high volume. As the professionals absorb the supply, however, the volume on downswings within the TR tends to diminish. When it appears that supply is likely to have been exhausted, the stock is ready for Phase C."
What we're looking for here is the bolded... for smaller price spreads and volume on the downturn. A lower low (if it happens) will likely accompany the bottom falling out from under the economy, in which case it's a buying opp (along w/ everything else).
For now trade the range.
This ain't financial advice, just a reminder to use common sense.
Note
Not sure I could've drawn up the forecast any better... Watch as this thing enters accumulation and LPS.... watch for lower price spreads, volatility, and volume on this downwards trend. I believe we are in wave 2 and the the ATLs are in.Note
Everything is continuing as was foretold in January of this year. Play the chart and you'll see that I even managed to call the time and price of the short term top.
Expecting a short term pop followed by another drawdown to a lower low. Smart money will accumulate here... will you?
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