Our outlook for this index at I is now bearish enough that we have liquidated our long position. There have been consistent indications of distribution by strong hands; our point & figure targets have all been achieved;...
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Psychology
Distribution is only possible when the mass of traders are positive on the market. Published editorials and reports from July to September give us some insight into traders’ outlook and mood during this period. All of the...
Selling Turns Aggressive
After a correction to E, the index rallies weakly before gapping to a correction low at F. By now the index has marked time for two weeks, and new support has been building between 145 and 150. Further, the distribution between...
Passive Selling
After our purchases at A and again at B, the index rallies strongly over the following two months. At C,the rally accelerates on widening spread and increased volume.This set of conditions is characteristic of the markup stage...
A Rising Market
Next, we take up the action of an industrial index as it rises out of a period of reaccumulation. Prior to the action shown on the chart, the index rose within a well-established uptrend. The index has shown evidence of...
Module 3 – Distribution
The Art of Selling Trading is a business of merchandising. As in any such business, the objective is to merchandise inventory at a price above cost. Successful traders accumulate positions at wholesale, when public interest is...
Mark Up
We established our long position by increments at I, J and M. Now GE rallies into a range of supply which extends from about 11 to just over 12 before settling into narrow trading just above 11. The stock is now in strong hands...
Point & Figure Targets 2
Additional accumulation on the retest of support at 10 has broadened the row of x’s at the 10 1/2 level, requiring us to adjust our point & figure counts. The point & figure chart below now indicates 13 as our...
Testing Support
Our initial position in GE was taken in two parts, the first just after the evidence of a shakeout at I and the second at J. Our approach to accumulating a position is to make adjustments based on the evidence of the tape. Shares...
Point & Figure Targets
The point & figure chart below gives us some sense of the near-term rally objective we may expect for GE. Because of the low price of GE, a one-half point chart is used. The vertical drop from 15 1/2 to 10 (A) frames the...