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Created on: 7/15/2011 4:54:03 AM   Last Update: 7/30/2011 10:13:05 PM Posted by: RTT
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1 POST This is what distribution on the SP500 looks like
this-is-what-distribution-on-the-sp500-looks-likeLarge accounts need to reduce positions in risky assets if they feel prices are about to roll over, these accounts require prices to stay up or hold a trading range so they can sell into it. In short they are willing to pump up prices in the short term to later sell into it, this is the Wyckoff distribution phase.

You guessed it the public is not a great benefactor of distribution phase. They are the pansy required to buy stock at this time.

Distribution is defined as:

Source: Wyckoff Terms


Distribution area is where the Supply overcomes Demand and stops the upward move and eventually begins the downward move. Distribution refers to the elimination of a long investment or speculative position and often involves establishing a speculative short position by professional interests in anticipation of a decline of price. In the distribution area the professional investors or speculators who had previously had bought stock, sell there stock to the public. The public buys and it generally buys because of good news of various sorts. Good news on the company, its product, the economy or any news which will entice untrained people to rationalize there buying decision. The best news of all is the advancing of the price of a stock. Often the reason that untrained people buy is that they do not want to miss out on the anticipated profits they think there are going to get as the stock continues to move up. Or they may buy because the stock has reacted a few points from the top and they think they are getting a bargain. After having sold there long stock professionals have no reason to support the stock on reactions and so they cancel there bits under the market, they may not only cancel the bids but they may establish short positions in anticipation of a large decline in price. Distribution is usually accomplished in a relatively SHORT TIME, Whereas accumulation takes MUCH LONGER, sometimes over many years. MAJOR distribution occurs in only a few weeks or perhaps a few months very rarely over a several year period. Distribution is usually characterized by wide price movements and heavy volume and GREAT activity.



The chart below shows that volume has been larger on sell offs than rally's. If the Wyckoff composite man expected higher prices in the immediate future then why would he be selling stocks now. At the moment the  professionals wish the market to hold a range to sell into, so far this is being provided and the professional fund managers are very happy that this remains so. (see video below)

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SP500 distribution

Yahoo Techticker 20110714







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Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, Cycles, Wyckoff and Ney logic is the best way to ride the change, after all these methods have been used successfully for 70+ years. This post is a delayed and small sample of what is avaliable to members. Sign up to enjoy the full service.


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Investing Quote...

..."By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and what point the greatest resistance is to be met"...

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Pericles

.."October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February."..

Mark Twain




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