Lots of TA guys that apparently very recently found Wycoff theory seem to think that we are in Accumulation after just a single markdown and I don't see the case for that currently. A period of long term accumulation will lead to a mark up and then a consolidation in reaccumulation. Likewise when things begin to step down there is a distribution, markdown, and then consolidation for the next leg down. That consolidation is very often Redistribution. Think of re-accumulation as wave 2 in Elliot impulse or wave B in correction.
The main difference is the direction into the trend and instead of preliminary supply we have preliminary support and instead of a buying climax we see a selling climax. One key point for each of these formations is you do not always get the Upward Thrust after distribution, but it is a nice sign when it occurs because it helps you see the distribution and know that the markdown will proceed violently. Since the price action is after the upward thrust and last point of supply I expect things should start moving in relative short time.
It is very likely that this markdown will make up the right shoulder of this head and shoulders but that target setting has been covered by enough analysists I don't see the point of wandering off. I will just reiterate that I think we will bottom (and accumulate) around the 200 week SMA & the bottom of the monthly Keltner Channel, with some wicking.
The main difference is the direction into the trend and instead of preliminary supply we have preliminary support and instead of a buying climax we see a selling climax. One key point for each of these formations is you do not always get the Upward Thrust after distribution, but it is a nice sign when it occurs because it helps you see the distribution and know that the markdown will proceed violently. Since the price action is after the upward thrust and last point of supply I expect things should start moving in relative short time.
It is very likely that this markdown will make up the right shoulder of this head and shoulders but that target setting has been covered by enough analysists I don't see the point of wandering off. I will just reiterate that I think we will bottom (and accumulate) around the 200 week SMA & the bottom of the monthly Keltner Channel, with some wicking.
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Looking for my entry here
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~Nathan Explosion
