JSE:MND Mondi Change of CharacterI prefer identifying horizontal trading ranges (TR) but in the case of Mondi I will make an exception due to the clear change of character (CoC) that was seen in the previous decline. At the end of 2018 we have seen a decline that has never been seen in the stock before, with some volume. The attempted rally has been weak and I am expecting a markdown to begin. The TR also started with the largest decline at the time and volatility has been increasing as the slanting TR developed indicating distribution.
Distribution
from accumulation to distribution: trading plan for pound aud
hey traders,
on pound aussie we have a very good example of market phases.
pair is now approaching a decent level of resistance,
and the market leaves multiple clues of bulls exhaustion.
first of all, analyzing volumes,
we see that smart money dont buy anymore,
and prefer rather to sell:
also, we have weakening overbought rsi with clear divergence,
and formation of a head and shoulders pattern.
all these things signify the distribution market phase.
last thing that we are waiting for is the violation of a neckline.
then we can freely sell the market with the targets based on structure.
good luck!
SPX Bear Market comingTarget found via Point and Figure Horizontal Count
Box Size of 50, Reversal Size of 3
JSE:GRT Growthpoint Distribution Complete?Growthpoint has been in a trading range since 2013. After a good uptrend, there was a throw over of the upward stride and a climax formed. The volatility to the downside has increased and Signs of Weakness (SoW) can be seen. Now after an Upthrust after Distribution (UTAD) and a test we have now seen a Last Point of Supply (LPSY). Looking for a high volatility breakout to the downside for the markdown to begin.
ETH struggling to break the 4-hour 100 MA; possible DistributionETH/USD is entering into a tightening range as we have strong resistance at the 4-hour 100 MA and support from the 50/200 4-hour MA's. With that said, I am leaning bearish in part due to LTC (see my other post for context on this.) Going along with that, the current side-ways range looks a lot like distribution to me; and that could indicate an eventual drop/dump. This is also a contrarian trade as most of the sentiment right now is bullish across the board, and when everyone thinks the same, it means someone isn't thinking.
Strong resistance: 4-hour 100 MA.
Potential zones for the price to drop if it does break down:
-4 hour 50 MA.
-4 hour 200 MA.
-Prior support zone around $125-126.
Moving average guide (All 4-hour moving averages for this post):
10 MA in Orange
20 MA in Pink
50 MA in Green
100 MA in Yellow
200 MA in Red
-This is not financial advice. Always do your own research and own due-diligence before investing and trading, as for investing and trading comes with high amounts of risk.
JSE:KIO Kumba Being DistributedThe resources sector has been strong but Kumba has been a laggard in the sector. The Trading Range (TR) that was formed seems to have the characteristics of distribution with increased volatility. The volatility to the downside is seen by increased spreads, gaps and increase volume. Pullbacks have been on lower volume. After the recent pullback, Kumba is ready to be marked down out of the TR.
JSE:RMI Rand Merchant Investments Markdown to start?Last year I followed the distribution pattern on RMI (See post below) which now seems to be completing. Price had found support at the at the bottom of the Trading Range (TR) but was unable to rally back the top of the TR. After some consolidation, we see a change of character bar (Significant reversal bar). RMI could now be ready to break out and start the markdown.
KO Earnings: Dark Pool Rotation vs. BuybacksCoca Cola has been in a major buyback mode for its stock in an attempt to move the price up. The buybacks have faced heavier than normal Dark Pool rotation (large lot selling) against the automated buyback orders. Recently the buybacks have increased, creating some interesting anomalies in the large lot indicators as well as in price patterns. Retail traders, who trade this stock heavily, are often fooled by buyback candlestick patterns. Institutional holdings has declined, which is unusual during a buyback mode.
BTC - SERIES OF ASCENDING CHANNELS All of this price action looks very distributive to me. I see a series of ascending channels / bear flags. Nothing for the bulls to get excited about here unless we see a major spike in bull volume.
JSE:AVI Lining up for a poor start to 2019AVI has been ranging since the beginning of the year. However, this looks like a distribution range. The declines with in the range have wider bars and sharper declines than any previous declines since listing. The last decline was on high volume and the attempted rally seems to be failing at the Yearly Pivot Point. Will be watching for price action and if the oversold trend line will be broken decisively for the markdown to start.
JSE:PGR Peregrine Holdings DistributionAfter a distribution trading range (TR) Peregrine Holdings was marked down. A re-distribution range formed and there was some effort to push the stock higher but without response indicating continued supply. The demand has dried up and the stock is being pushed lower after a retest.
JSE:J200 JSE Looking Like DistributionThe range in the JSE Top40 index that started in April 2015 seems to be a distribution range. Following the Wyckoff logic, we could have seen an Upthrust After Distribution (UTAD) and test at the highs at the end of 2017 / beginning of 2018. Now we see an increase in the spread to the downside of 8 to 11 to 12 to 19% indicating a bearish Change of Character (CoC)Using the total sum of volume for Top 40 stocks there is also an increase in volume during these moves to the downside indicating that stocks have been transferred from strong to week hands. Since the last down move, we have seen a week attempt to rally. My bias for 2019 is that the Top 40 could see a resolution of the trading range to the downside. How the current potential Last Point of Supply acts (LPSY) in the new year will clarify if a markdown is about to begin. If the distribution is confirmed I will be looking for laggards in the Industrial sector which is currently the weakest sector to trade (see the previous comparison of sectors in the links below).
ETH SHORTHey friends!
If the wave count is correct this would be the current top for ETH. We also see some divergence on 1h and distribution going on.
Good luck!
JSE:TKG Telkom Great Wykoff StudyIt is not a good time to buy Telkom but it makes a good study of the Wyckoff principles. The first thing to notice is the pattern: Markdown - Accumulation - Markup - Distribution - Markdown - Accumulation - Markup and now potentially forming a range again. The next notice the two ways that markups and markdowns en: 1) The first Markup and Markdown ended by an inability to move to the oversold or overbought trend line, 2) The second two had over throws of the lines. Both these setup resulted in a trading range forming. The next thing is to notice how the trading range forms. Only the main labels are added to have less clutter. Volume increases on the Preliminary Supply (PSY) or Support (PS) and it is possible to even be the highest volume for the range as is the case in the Distribution Range. Next a Selling (SC) or Buying (BC) Climax is formed on volume stopping the trend (Phase A). After a Aromatic Rally (AR) or Automatic Reaction (AR) (Still Phase A) a period of low volume in the TR forms where the Composite Operator (CO) is carefully either Distribution or Accumulating stock (Phase B). Once this is done the TR ends in a Spring; Upthrust after Distribution (UTAD) or Last Point of Supply (LPSY) / Support (LPS) Before breaking the TR (Phase C). Once it has been marked out of the TR a backup to the trading range first takes place (Phase D) before the Markup or Markdown can begin (Phase E). Also notice how the Volume RSI can assist in providing a clue if an accumulation or distribution is forming.
GE shares show a lack of demandGE shares have trended down all year with a lack of demand. The stock price reflects the troubling fundamental picture. Shares will stay under pressure until this theme reverses.
$SPX - Monthly DistributionEveryone very focused on the the daily chart need to zoom out and look at weekly, similar to how traders look at the 15 min / 1hr / daily for swing trades. Monthly showing clear distribution on increasing volume. Vol sell signal triggered and would need a close above 2935 to be bullish. Vol stop signal has been extremely accurate on the monthly. Look at the green and red dots. Short the rally's until then.
I am long $SPY Dec 2019 $150 puts at .65 avg px
JSE:GLN Glencore Stock Being DistributedGlencore has broken the upward stride that was in place since 2016. After breaking the stride there was a decline on volume and wide spread bars indicating Signs of Weakness (SOW). The subsequent rally bars has smaller spread with declining volume indicating the demand has dried up and the distribution is nearly complete. Once the trend line for the current correction is broken the markdown could start. The Volume RSI also indicates weakness with volumes on green bars being lower than for red bars.
JSE:RMI Rand Merchant Investments DistributionRMI has been looking week since April 2015. After the Buying Climax (BC) and Automatic Rally (AR) was formed the stock has been week and kept moving below the trading range. After some last effort to move to the top of the trading range we see volume drying up indicating that the large players have completed the distribution after the initial increase in volume. The OBV has shown divergence with the price. After breaking the 200 Week MA was broken and retested it looks like the stock is ready to be marked down. The next significant points of interest could be as low as 2662 or even 2257 which is about a 30% decrease in price.
USDZAR: Wyckoff Distribution: Rand is strengtheningUSDZAR seems to be going through a typical Wyckoff distribution after an uptrend. A Buying Climax (BC) occurred on high volume and a throw over of the overbought line. We see low volumes on advances and higher volumes on declines. Volumes at the top of the range has been high but decreasing on subsequent tests of the highs. A Upthrust after Distribution (UTAD) has occurred and a lower volume Last point of Supply (LPSY). Divergence with the OBV is also seen. Using a Point and Figure count (see below comment) a target between 12.3 and 13.6 can be set.
Bitccoin's higher lows suggest continued upward movementGood morning, traders. We've made it to another Friday and Bitcoin hasn't died yet, which is always a good sign. Novice traders seem to hold as truth a complete misunderstanding of the market -- that things in the market happen randomly. This kind of thinking leads to emotional trading which results most often in a loss. Market moves are measured and purposeful by the composite operator, and are driven by accumulation and distribution which are the result of supply and demand. The retail herd, itself, is nothing more than a price chaser -- a lagging indicator. With enough supply off the table, all CO has to do is suppress or inflate price and the herd will take off chasing after it causing it to move further in the intended direction. When novice traders learn and understand this, they become less likely to be "surprised" by the drops and pops that occur in the market.
So where are we at this morning? After yesterday's drop (possibly a Spring on the larger TF), price has stabilized and is currently trading at the top of the local TR. We can see price printing higher lows on the 15 minute TF which suggests price is more likely to move up than down. As such, I am looking for an initial target of $6358 on Bitstamp and $6461 on Bitfinex as the latter's premium has risen to $120 at this time. A breach of the descending red dashed lines on either chart should indicate the movement toward those targets. Don't forget, Bitfinex has a gap at $6360 that is looking to be filled and Bitstamp has one at $6486 and another at $6528 that are as well. Beyond those, we have all the gaps to fill on the way to $6900 also, so my bias remains upward until $6900 at the least before we even consider any extended period below $6000. OBV has continued to rise confirming the upward trend in price on this TF. MACD is bullish, having just completed a bullish cross above centerline. RSI is bullishly above 50.
The 4H TF is just exiting oversold and MACD is curled up and targeting a bullish cross of the signal line. OBV continues rising as well. It appears that a pennant may be forming, and if so then the target of $6350-$6360 based on the flagpole would validate the Bitstamp target mentioned above. The 1D TF appears to be printing a possible descending broadening wedge since September 22nd. If so, we should expect a target of the R1 pivot at $7300 upon breach of the resistance of that pattern. I am not convinced of this pattern just yet, however, as there isn't clean strong movement between support and resistance within the pattern. OBV is printing a descending broadening wedge inside of a descending wedge suggesting that OBV will be rising on this larger TF. The 3D OBV continues to rise since its low on June 21st and the weekly continues to rise since its March 26th low. As always, when in doubt, zoom out to get a better idea of what's likely going on. Currently, the weekly candle is showing a growing lower wick which is indicative of absorption which means someone is buying up all the selling at these levels. As a reminder, $6622 remains the point we need price to breach and remain above. It is the general level that has worked as support and resistance throughout this corrective cycle and is the equilibrium of the November 6, 2017 weekly candle.
In the broader financial market, stocks should see a rebound today after the $1500 drop over the past two days. The 1D is oversold and the recent gap at $25599 will likely be filled. Gold hit our 1D R2 target of $1226 yesterday and broke out of the descending channel as well as the horizontal TR its been trading in since August 23rd. The dollar is getting a bounce against the majors as the DXY bounces off the daily pivot, so we are short the EUR against the USD this morning. These should be short-lived however as we see continued downside overall for stocks and USD, and upside for gold.
Bitcoin shakeout has bears saying "I told you so."Good morning, traders. Everyone is freaking out because of last night's drop, but in the grand scheme of things it was only about 4%. So why the fuss? Because traders are scared that price will go down and remain down. However, if you are a trader then whether price is going up or down should make no difference, only that it's moving so that you can profit. If you are an investor, then your TF is necessarily much longer, so the drop shouldn't have been of any concern to you either, nor whether or not price drops below $4000 and remains there for 6 months. But most people in the crypto market have not taken the time to define who they are as a trader or investor, nor have they learned how and why markets move like the do, and, therefore, become emotional when price moves. I am extremely proud of the individuals in our Discord trade and research group as they showed complete calmness during last night's price drop event. This morning now shows well-oversold 4H RSI which means that sooner, rather than later, we should see a move up. That doesn't mean price can't drop a bit further first, only that ultimately we should expect a nice move upward.
It's important to understand that last night's event was manufactured to elicit a response. It wasn't something that just happened randomly. If you watched the orderbook on the exchange, or at least on TensorCharts.com, then you saw heavy sell pressure appear and continue moving down with price as support was pulled. This caused the herd to sell and/or get liquidated as price dropped. However, for every sell there must be a buy, which means someone's longs were getting filled on the way down. If those longs belonged to C.O., then you should expect price to move up overall. That doesn't mean it must move up right this minute. Novice traders tend to think that there must be a strong rebound after a shakeout. But that isn't always the case. Many times we see price gradually work its way back up and out. That does not signal low-quality demand as many big talkers in CT are stating.
Once again, I am providing Bitfinex and Bitstamp charts as they show the two general price levels being found in the market. Bitfinex retains a $100 premium. We can see that the Bitstamp chart shows a pennant forming along the S3 pivot which means we should expect a break to the upside to the $6390/$6400 level which was the bottom of the previous TR, and is denoted by the horizontal blue line, as well as the S1 pivot on this TF. What we want to see is OBV breaching its descending resistance line as price moves up. This will signal that the move up is true.
I have labeled a mini-accumulation on the Bitfinex chart. A gap remains at $6359.50 on Bitfinex which will most likely be filled. If so, then price will be moving out of the TR of this mini-accumulation and we can expect it to go into markup which means that it should continue upward. The bottom of the previous TR spoken about in the Bitstamp chart is labeled at $6526 on Bitfinex, so that would be the expected target area for now. There is also a gap at $6527.74 on Bitstamp that will likely be filled which would put price above the pivot on the 15 minute TF on Bitfinex which would be a bullish signal on this short TF.
When looking at volume and price action, we can note that the drop on the 4H Bitfinex chart was similar to the drop on September 5th in, both, size and volume. In other words, nothing significantly note-worthy. However, if we zoom in to the 15 minute TF, it tells another story. We can clearly see two larger volume spikes with the first drop of $220 being the smaller of the two. The second drop of $115 had heavier volume. The second 15 minute candle took more effort for significantly less result. This tells us that absorption was happening in that $6250-$6350 range.
Returning to September 5th, we can see the two largest candles printed the opposite result. The first was a drop of $130 and the second was $345 with the volume being greater on the second candle than the first. Because of this, we can see price dropping further just a few days later, rather than increasing. Finally, we can also see that this recent large 15 minute volume candle was less than the September 19th candle which was buy volume. Put another way, the strongest volume recently has come on the buyside, not sellside, even taking into consideration last night's candle. Furthermore, the volume on the September 5th candle, which was more than the September 19th candle, is less than the previous buy volume on the August 21st candle. As a matter of fact, the largest volume 15 minute candles overall since June have been buyside candles and they have been attached to large upward movements. Volume cannot be understood in a vacuum. It must have context which means it is always relative. So, while there are no guarantees about price direction, if you are dogmatically holding onto the belief that price MUST drop below $4000, then you are not paying attention to what is being said on the chart. Can we drop that far? Sure we can and it is a possibility I have discussed multiple times this year, but this dogmatic belief that it absolutely must do so is pure emotion.
In the broader financial world, yesterday's route of the U.S. stock markets sent expected reverberations throughout Asia as stock markets in the east also saw sharp sell-offs. As I have mentioned numerous times before, the cryptocurrency market is extremely risky and during times of market sell-offs we can likely expect to see the same thing happening in the crypto market as fiat heads for safety. This does not mean money will leave the crypto market and stay out of it, only that sudden sell-offs cause knee-jerk reactions resulting in movements toward safety. Gold, as a result, is sharply higher this morning as expected. In terms of the USD, after a strong drubbing recently during which we were long EUR against the USD, long GBP against the USD, and short USD against the JPY, the expected bounce is currently happening and we are now long USD against the JPY for just a bit.
head and shoulder breakdown?had given breakout from rectangle formation but currently has given breakdown from head and shoulder pattern. . . keep watch
