Stock Market Time

Aug 13 15:08 2019 Print This Article

Recently the stock market indexes entered a period of extreme volatility. Seemingly random events sent the indexes into rapid declines. These unexpected events blindsided many traders and investors. Stops were hit on positions that only moments prior seemed to have a safe cushion of profit. 

When markets become volatile and uncertain, traders will employ techniques and indicators that are more sensitive and can react quickly to changes. The Wyckoff Method works very well in the intraday time frames. This can be an excellent way to detect the motives of the stock market and the likely emergence and conclusion of swing trading and short term trends. Let’s study the recent market as a case study into how to best utilize these Wyckoff tools.

(click on chart for active version)Within the 30 minute time frame there was evidence of Distribution in the Dow Jones Industrial Average ($INDU). This action took about half of July to complete. The second Sign of Weakness (SoW) was followed by a rally attempt into the final Last Point of Supply (LPSY). This rally stalled just above Support which completed Distribution and ushered in a cascading Markdown. The sudden expansion of volatility into the SoW and the following LPSY was the warning of the $INDU change of behavior into a Downtrend. Rapid expansion of volatility is the warning of the emergence of a new trend. Study the small base that formed after the Selling Climax (SCLX) and the rally that followed. A modest PnF Count formed and price has reached the rally objective. We will watch for more potential testing of the recent lows and the building of a new PnF Count.  

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Stockcharts.com

StockCharts.com was founded in 1999 by Chip Anderson, a 10-year veteran of Microsoft. StockCharts.com is a website that provides online investors with high-quality financial charts for making better investing decisions. StockCharts.com is focused on Technical Analysis - the study of price history via charts. They provide award-winning analysis tools, market commentary from respected analysts like John Murphy and Martin Pring, and a huge collection of educational resources that can help anyone become a better, more informed investor.

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