I thought I would help mitta out tonight, seeing as he got so mixed up with his analysis earlier, lol
I've turned the chart around for him & edited his commentary.
He must have had a bad bad day, to get so confused with his analysis like that.
Hahahahaha
"Hi all, hope everyone’s weekend is travelling as good as this XJO weekly is (way below), which is panning back to about APR08
Won’t spend too much time with analysis on the first 2 little trading ranges marked, (1, 2), other than that (1) appears to be an area of re-distribution, i.e. an area of distribution in an downtrend, which is easy hey
Range (2) is also an easy one as it’s a re-accumulation range i.e. they continue to accumulate in this phase whilst in a uptrend.
If we look really closely at that range, we can see some heavy volume come's in at the top over those 2weeks marked (A)
and then as plain as Miss Daisy, we get another 3 perfectly placed signs of strength that finish the range off, that being an shakeout, and then 2 No Supply weeks (going down the hill on reducing volumes/supply) before being locked in and all over on that back slam week that would've trapped all the silly billies being short at the time.
Now moving onto Range (3) which had travelled for exactly 2 whole years and it certainly appears to be a phase of distribution, agree, yes/no, well let’s look a little closer and break it down in those silly old Wyckoff terms (not really silly, ed).
We all know that on most occasions before entering a Trading Range there is a good chance, not always though, to get some form of climactic action, i.e. This is the time the market is being sold or bought really heavily by everyone and of course at the same time the professional syndicates etc are doing the exact opposite,
If we look at area (3), which happens to be made up of about 7/8weeks, we can clearly see that this must be some form of climatic action, as the volume has really ramped up, this would I guess be the professionals stepping in and selling/distributing to all the strong buying.
At this time the market had risen about 1600pts from the lows of only 6 months earlier.
Now if we just speed things up a little here, it's getting a little late (sure is, ed), let’s only look for the low volume at the top of our range (No Demand, ed). That is, if it is an area of distribution, cause as we’ve just seen in that little re-accumulation phase, in that instance (bullish) we found a lot of volume at the bottom of its range.
Now if we move to areas (4, 4a), we can now feel more confident that it is a phase of distribution, as we can see that they’re accumulating more inventory at the bottom of the range, and as previously seen at the top, there is No Demand for higher prices via the low volumes at the top of the range.
Area (4) is a huge amount of accumulation and it’s then followed by (4a) which arrives at the same level on much less volume i.e. No Supply, and with it having previous strength directly behind you (at 4), this is the perfect place to go long or dispose of your shorts as it’s a simple Wyckoff principle, it's ready to rock and roll higher (baby).
After leaving area (4a), they just "mark up" the market all the way back to the top of the range, once again on lowish volumes and then a bit more buying there with a huge shakeout, before heading south again.
Moving along to week No (5), which just happens to be our latest SOW (sign of weakness), increased spread/volume closing lowish which breaks or jumps out of the range clearing all the previous levels of support at (4) etc.
Unsurprisingly a huge shakeout bar follows, then over the next 3weeks it clearly shows some real nice examples of No demand testing the previous bottom of the trading range.
Here the previous support is turning into resistance and it then moves lower.
A bit more accumulation come's in at (5a), but on less volume, which is very similar to (4a).
Once again some more unsuccessful attempts to move higher, or moving up to resistance on reduced volume/spreads (No Demand) occur at area (6),
Which brings us to last week, which moves accordingly lower on a slight increase in volume/spread, closing low.
Many thanks BD if you’ve lasted the distance and got this far, hopefully it wasn’t too confusing.
As always please DYOR as this post is purely for educational purposes and a bit of weekend fun in the lounge hey.
(20min delay)