Redistribution begins with volatility and ends with volatility. Typically a Selling Climax initiates the Redistribution process. The Redistribution process looks eerily similar to Distribution. A review of the process of Distribution could prove helpful (to study the Distribution process and schematics click here). On the ARMH case study; cover up everything to the left of the Selling Climax (SCLX) and compare to the schematics and prior Distribution examples. Note the family resemblance. The blue labeling of the SCLX, AR and ST are there to illustrate the similarities to the start of Accumulation. This is classic ‘stopping action’. The red labeling illustrates Distribution and Redistribution attributes. Note that once the stopping action is in place (primarily short covering) the footprints of Redistribution become evident.
The attempt to support ARMH takes place at the ICE. Note the series of lower price lows. This is a sign of inherent weakness and is labeled as SOW (Sign of Weakness). Once the ICE is broken there is no longer enough demand left to rally back into the prior trading range. ARMH is very vulnerable to a rapid markdown when below the ICE.
After the Climactic action at the Upthrust (UT) the volatility and price weakness become dominant. The rallies are weak, short in duration, and lack sponsorship from the C.O.
We will spend more time on the tricky business of Redistributions.
credits to....
About the author: Bruce Fraser, an industry-leading "Wyckoffian," began teaching graduate-level courses at Golden Gate University (GGU) in 1987. Working closely with the late Dr. Henry (“Hank”) Pruden, he developed curriculum for and taught many courses in GGU’s Technical Market Analysis Graduate Certificate Program, including Technical Analysis of Securities, Strategy and Implementation, Business Cycle Analysis and the Wyckoff Method.
The attempt to support ARMH takes place at the ICE. Note the series of lower price lows. This is a sign of inherent weakness and is labeled as SOW (Sign of Weakness). Once the ICE is broken there is no longer enough demand left to rally back into the prior trading range. ARMH is very vulnerable to a rapid markdown when below the ICE.
After the Climactic action at the Upthrust (UT) the volatility and price weakness become dominant. The rallies are weak, short in duration, and lack sponsorship from the C.O.
We will spend more time on the tricky business of Redistributions.
credits to....
About the author: Bruce Fraser, an industry-leading "Wyckoffian," began teaching graduate-level courses at Golden Gate University (GGU) in 1987. Working closely with the late Dr. Henry (“Hank”) Pruden, he developed curriculum for and taught many courses in GGU’s Technical Market Analysis Graduate Certificate Program, including Technical Analysis of Securities, Strategy and Implementation, Business Cycle Analysis and the Wyckoff Method.