within this accumulation phase we have several indicators that demand is getting stronger
1. Wide Spread Down Bar on Ultra High Volume , with no follow thru .. SOS (sign of strength)
2. a wide spread dwon bar on high volume closing of the low wich is follwed by an up bar SOS
a spring on high vloume .. all happens on the same area as the previous (1.) sos occured
on half of the volume back then .. wich acts as a secondary test.. SOS
3. Small spread down bar on high volume with the next bar beeing an upbar .. demand swamping supply
SOS , and this happens all within a form of absoprtion (TR) where at the end of the TR we have up bars
spreads widen and volume increases..
4. right before the end of the TR (absorbtion) we have a shakeout SOS
5. Breakout of Absorbtion TR .. is successfull SOS
now as we are running into a heavy supply area .. and we may enter phase C of accumulation where Smart money
is in testing phase of the quality of supply present .. we can either have 3 scenarios.. before the markup
1. we may see another form of absorbtion
2. we see a final shakout phase occure.. where we leave the accumulation TR to the downside.. ending with a spring .. or simmilar.. too shakeout the weakholders..
3. or maybe we see a form of pushing thru supply..
we see even thou we run into a heavy supply area .. the closes tend to cluster and price doesent gets rejected heavily .. looks to me that the supply area is of weak nature.. rather then strong..
will be interresting to see waht will happen next..
The following 2 users say Thank You to PrymeTyme for this post:
first off all charts are on Daily TF.. iam a longterm trader..
well on a larger view the SPG (distribution) is in an uptrend since somewaht april 09 .. so its not a re distribution
the SHLD had an immediate markdown phase in the background ... so the game starts again (->accumulation->markup->distribution->markdown->) so no re accu here too..
as for how to trade it.. well iam somewaht conservative .. and i want to see a breakout/breakdown of the accumulation/distribution TR .. and then i want to see a retest of that move.. with indicators of price action wich would confirm a succesfull retest..
on SPG for example i would want to see on daily TF on a upswing signs of weakness or no demand .. upthrusts
etc.. and if that occures .. i zoom in and look for a low risk setup on H4 .. with a SL set on daily TF... as i only want to get stopped out if iam wrong.. ..
on SHLD a breakout of the accumulation phase followed by a retest on daily .. wich forms a spring , shakeout or no selling pressure price action .. then zoom in H4 look for low risk setup.. and play that setup... btw.. if the breakout wouldn retest the former resistnce.. i would wait for a another reaction.. then look for a setup later
even if we didnt fall thru the ice/support on SPG .. i made an example on how i would trade it .. just a informative example...
The following 3 users say Thank You to PrymeTyme for this post:
just a comment on the blues boxes . to me these are absorbtion ranges.. as we see to the end of the range
that the candles make higher lows and closes .. and volume increases.. so thats absorbtion going on there..
the rest of the chart sounds good to me ... also remember that climactic actions .. can and will occur over several bars..
keep it up and keep those nice charts coming ..
The following user says Thank You to PrymeTyme for this post:
Here is a GC 30min chart, I stopped the data feed a little after 10:00 to annotate and post. This looks like accumulation after 3 big pushes down in the last few days. At a major support line and a measured moved
from the previous thrusts down seem to confirm. I will restart my datafeed after I post.
Thanks for the comments PrymeTyme. I think you are correct on the accumulation point, or is it a matter of NO supply? Maybe both?
The following 3 users say Thank You to martied16 for this post:
Thank you PrymeTyme. I appreciate the positive feedback.
Since markets mimic themselves I try to find different groupings of patterns, and within these groups again similar patterns. My thought behind it is to have a broad as possible repertoire of different kinds so that we can intuitively be more effective.
“If you wish to see the truth, then hold no opinions for or against anything.” - Hsin Hsin Ming