Happy Memorial Day to those based in the US. I’m hoping for a fun day filled with BBQ and all the other requisites a lazy summer holiday should require. Hopefully, everyone managed to find a short position before the next Wyckoff Distribution leg took hold.
Looking at the Intraday Chart, the Wyckoff re-Distribution range did not take long to play out. Once the Intraday trade range re-tested the earlier $9,300 Upward Thrust After Distribution (UTAD) forming a double top (a bullish signal in Point and Figure) and failed to push past it, the double top then acted as a Last Point of Supply (LPSY) in the formation. In my post yesterday, I mentioned the target price for the downside based upon the formation was $8,740.
The target price at $8,740 was realized yesterday as the price pushed down to $8,740 and beyond it to $8,640 in what could only be described as a Memorial Day Clearance Sale selloff – and formed a Low Pole on the chart. This suggested a Low Pole Reversal with a target price of $8,900 should come into play. The price rebounded to $8,860, but failed to advance beyond it, setting up a trade range between $8,860 and $8,640. It would appear we are now in the second Wyckoff Redistribution pit stop on our way down to the lower end of the trade range ($8,120) for the higher time frame (1D).
My expectation would be the second Wyckoff Redistribution should play out very much like the first, however I do not expect an Upward Thrust After Distribution (UTAD) during this redistribution phase. Although if one did happen, it would fall within the bounds of normal expectation for a Wyckoff Redistribution. Remember, the Composite Man is always looking to reduce slippage while unloading their bags.
There is insufficient consolidation currently on this chart to provide a target price using the Horizontal Method, suggesting the consolidation period still has some time to go. The Vertical Method suggests a price target of $8,520 should the price fall to $8,680, form a double bottom (a bearish signal in Point and Figure), and break $8,640.
Looking at the 1D chart, after the PA flipped to a red candle, the PA pushed downward, formed a double bottom at $8,800 (a bearish signal in Point and Figure), then pushed to $8,780 sending a sell signal, before breaking through $8,760 and confirming the bearish PA.
The Wyckoff Distribution on the higher trade range always takes longer to play out, but it gives us an idea of where things are going as we move towards the bottom of the trade range. Using the Vertical Method, the suggested target price on this distribution for this higher time frame is $7,680, which would align with the $7,720 floor I show as the next major support after the $8,120 lower end of the trade range.
For reference, I never use the Vertical Method on higher time frames to determine price targets. It’s just my preference - not a statement on the method. Rather, I use the Vertical Method on the higher time frame to get an idea of where things are going and, in this case, to see if a potential move below the $8,120 lower trade range floor might be in play.
Always remember this is not trading advice.
Outside of that, Happy Trading.
Looking at the Intraday Chart, the Wyckoff re-Distribution range did not take long to play out. Once the Intraday trade range re-tested the earlier $9,300 Upward Thrust After Distribution (UTAD) forming a double top (a bullish signal in Point and Figure) and failed to push past it, the double top then acted as a Last Point of Supply (LPSY) in the formation. In my post yesterday, I mentioned the target price for the downside based upon the formation was $8,740.
The target price at $8,740 was realized yesterday as the price pushed down to $8,740 and beyond it to $8,640 in what could only be described as a Memorial Day Clearance Sale selloff – and formed a Low Pole on the chart. This suggested a Low Pole Reversal with a target price of $8,900 should come into play. The price rebounded to $8,860, but failed to advance beyond it, setting up a trade range between $8,860 and $8,640. It would appear we are now in the second Wyckoff Redistribution pit stop on our way down to the lower end of the trade range ($8,120) for the higher time frame (1D).
My expectation would be the second Wyckoff Redistribution should play out very much like the first, however I do not expect an Upward Thrust After Distribution (UTAD) during this redistribution phase. Although if one did happen, it would fall within the bounds of normal expectation for a Wyckoff Redistribution. Remember, the Composite Man is always looking to reduce slippage while unloading their bags.
There is insufficient consolidation currently on this chart to provide a target price using the Horizontal Method, suggesting the consolidation period still has some time to go. The Vertical Method suggests a price target of $8,520 should the price fall to $8,680, form a double bottom (a bearish signal in Point and Figure), and break $8,640.
Looking at the 1D chart, after the PA flipped to a red candle, the PA pushed downward, formed a double bottom at $8,800 (a bearish signal in Point and Figure), then pushed to $8,780 sending a sell signal, before breaking through $8,760 and confirming the bearish PA.
The Wyckoff Distribution on the higher trade range always takes longer to play out, but it gives us an idea of where things are going as we move towards the bottom of the trade range. Using the Vertical Method, the suggested target price on this distribution for this higher time frame is $7,680, which would align with the $7,720 floor I show as the next major support after the $8,120 lower end of the trade range.
For reference, I never use the Vertical Method on higher time frames to determine price targets. It’s just my preference - not a statement on the method. Rather, I use the Vertical Method on the higher time frame to get an idea of where things are going and, in this case, to see if a potential move below the $8,120 lower trade range floor might be in play.
Always remember this is not trading advice.
Outside of that, Happy Trading.