Wednesday, December 21, 2022

Accumulation & Distribution | Richard D. Wyckoff


An understanding of manipulative procedure in any-event helps us to judge the motives, the hopes, fears and, aspirations of all the buyers and sellers whose actions today have the same net effect upon the market as 30 many pool operations would have. So if we are squeamish about the term "manipulator" we may substitute the words "Composite Operator" with the same force and affect. Some people might object to this statement on the ground that regulation of the stock market has eliminated pool operations. Even though pool operations and old-fashioned manipulation are banned by law, for our purpose in studying, understanding and correctly interpreting market action, we must consider any operation a "manufactured" movement wherein the buying or the selling is sufficiently concerted and coming from interests better informed than the public as to produce the same effects as pure manipulation. 

[...] The market is made by the minds of men, and all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.

Great activity and breadth induces trading in large quantities by big operators on the floor and outside. Such a market enables the manipulator to unload a large line of stock. When he wishes to accumulate a line, he raids the market for that stock, makes it look very weak, and gives it the appearance of heavy liquidation by sending in selling orders through a great number of brokers.

You say all this is unethical, if not unscrupulous. You say it is a cruel and crooked game. Very well. Electricity can be very cruel, but you can take advantage of it; you can make it work for your benefit. Just so with the stock market and the Composite Man. Play the game as he plays it. I am giving you the inside view.

 

See also:
 

Range Extension & Contraction - Reversals - Time Cycles | Stacey Burke

 
oOo
 
Old Baron Rothschild's recipe for wealth winning applies with greater force than ever to speculation. Somebody asked him if making money in the Bourse was not a very difficult matter, and he replied that, on the contrary, he thought it was very easy. "That is because you are so rich," objected the interviewer. "Not at all. I have found an easy way and I stick to it. I simply cannot help making money. I will tell you my secret if you wish. It is this : I never buy at the bottom and I always sell too soon."

Jesse L. Livermore

oOo

Quoted from:
 
See also:
 
Weekly Cycle and Market Structure in Gold (1 hour chart):
Daily and Weekly Highs and Lows, Daily and Weekly Pivot Levels, Inside Days, Outside Days,
Daily and Weekly Accumulation-, Extension-, and Distribution-Levels, Breakouts, False Breakouts,
V Patterns, M & W Patterns, Peak Formation Highs and Lows.

Friday, December 16, 2022

Broadening Tops | Richard W. Schabacker

Richard W. Schabacker (1932) - The Broadening Formation is made up of five separate and distinct minor reversals of trend, with each reversal going farther than the last, which gives it its characteristic broadening appearance and which, as we have already noted, causes it to resemble an Inverted Triangle. But an Inverted Triangle may be built up of any number of minor reversals whereas a Broadening Top must have five, and only five, fairly compact, broadening swings of minor or short intermediate price reversal. If a sixth reversal appears, then the formation is spoiled, and incidentally that sixth swing carries the previous major movement on into a continuation, whereas we know that our Broadening Formation, to be called such, must be a reversal of the previous major trend.
 

Since the Broadening Top must have five turns, or reversal in minor or intermediate trend, and never show a sixth turn, the first reversal of trend will be in the opposite direction from the previous major trend, while the fifth and last turn will also point the price trend in the opposite direction from the preceding major movement and set it on its new course opposite that previous direction. Thus the first turn in a Broadening Top must be a down-turn.
 
[...] The Broadening Top forms apparently in very active and excited markets after professional traders have already distributed their important holdings and have stepped aside. Heavy public participation, however, keeps the market active; prices, out of professional control, fluctuate in ever widening swings until it becomes evident that there is no real support or basis for further advance; no buyers appear for the shares the public now wishes to sell and the market collapses. Such conditions develop only at or near the end of fast ‘"bull" markets that have run completely out of bounds.  
 
[...] The Broadening Top is rare and is not infallible but, when it does work, it is exceedingly important, and generally marks a critical turn from a ‘‘bull’’ to a ‘‘bear’’ market. This is comforting to the technical student because it means that there is still an ample swing for profit on the downside even after he has waited for some time to be sure that the Broadening Top was a bona-fide reversal pattern.
Richard W. Schabaker

oOo
 
Quoted from:
 
See also:
 

The Four Guiding Principles of Market Behavior | Momentum & Trend

Principle 1:     Trend is More Likely to Continue its Direction than to Reverse
With price established in a clearly defined trend of higher highs and higher lows, certain key strategies and probabilities begin to take shape. Once a trend is established, it takes considerable force and capitalization to turn the tide. Fading a trend is generally a low-probability endeavor and the greatest profits can be made by entering reactions or retracements following a counter trend move and playing for either the most recent swing high or a certain target just beyond the most recent swing high. An absence of chart patterns or swings implies trend continuation until both a higher high and a higher low (vice versa for uptrend changes) form and price takes out the most recent higher high.

Be aware that recent statistical analysis of market action (from intraday to 20 day periods) over the last five years shows that mean reversion, rather than trend continuation is more probable in many equities/indices (as shown by more up days followed by down days than continuation upwards). For the current market environment, until volatility returns (as it may be doing now), this rule may be restated, “Trends with strong momentum show favorable odds for continuation.”
 
Principle 2:     Trends End in Climax (Euphoria/Capitulation)
Trends continue in push/pull fashion until some external force exerts convincing pressure on the system, be it in the form of sharply increased volume or volatility. This typically occurs when we experience extreme continuity of thought and euphoria of the mass public (that price will continue upwards forever). However, price action – because of extreme emotions – tends to carry further than most traders anticipate, and anticipating reversals still can be financially dangerous. In fact, some price action becomes so parabolic in the end stage that up to 70% of the gains come in the final 20% of the move. Markets also rarely change trends overnight; rather, a sideways trend or consolidation is more likely to occur before rolling over into a new downtrend.
 
Three Things Markets do:
1. Breakout and Trend.
2. Breakout and Reverse (False Breakout).
3. Trading Range (High and Low).
 
 
Principle 3:     Momentum Precedes Price
Momentum – force of buying/selling pressure – leads price in that new momentum highs have higher probability of resulting in a new price high following the next reaction against that momentum high. Stated differently, expect a new price high following a new momentum high reading on momentum indicators (including MACD, momentum, rate of change). A gap may also serve as a momentum indicator. Some of the highest probability trades occur after the first reaction following a new momentum high in a freshly confirmed trend. Also, be aware that momentum highs following a trend exhaustion point are invalidated by principle #2. Never establish a position in the direction of the original trend following a clear exhaustion point.
 
Principle 4:     Price Alternates Between Range Expansion and Range Contraction
Price tends to consolidate (trend sideways) much more frequently than it expands (breakouts). Consolidation indicates equilibrium points where buyers and sellers are satisfied (efficiency) and expansion indicates disequilibrium and imbalance (inefficiency) between buyers and sellers. It is much easier to predict volatility changes than price, as price-directional prediction (breakout) following a low-volatility environment is almost impossible. Though low volatility environments are difficult to predict, they provide some of the best risk/reward trades possible (when you play for a very large target when your initial stop is very small – think NR-7 Bars).

Various strategies can be developed that take advantages of these principles. In fact, almost all sensible trades base their origin in at least one of these market principles: breakout strategies, retracement strategies, trend trading, momentum trading, swing trading, etc. across all timeframes.
 
Concept Credit for arranging the four principles
 
See also:
 

Wednesday, December 14, 2022

Year-End Rally, January Influence & Trend For The Year | Jack Gillen

Jack Gillen (2009) - The Sun's position in relation to the stock market can show trends that are more or less active for each year, as the Sun degrees are generally fixed — they fall on about the same date every year. This is why some periods of the year reflect more of a pattern. This means that the Dow Jones Industrial Average will have similar to the same patterns at different sensitive points throughout each year. 
 
 
As an example, Iet’s take the natal chart of the NYSE and the U.S. chart. In the NYSE chart we find Venus, a prominent planet, along with Jupiter, relating to moves of success. The Sun is trine Venus at 5 degrees Taurus with the Sun at 5 degrees Virgo or 5 degrees Capricorn. This would relate to a sensitive point from the transit of the Sun to the NYSE chart. But in the US chart we have Jupiter at 5 degrees Cancer (the opposition of Cancer is Capricorn) so the transit at 5 degrees Capricorn would affect the market during that orb which would last from 5 degrees through 9 degrees, a 4-degree orb. This orb is in effect around Christmas and has become known as the year-end rally. The percentages are thus strongly in the favor as far as the Dow Jones coming up on the plus side from Christmas Day to New Year's Day. This trend is more or less dominant year after year.
 

[...] Regarding the trend for the year, January can give a good indication because of the later degree sensitive points (Venus in Taurus, and Mars and Neptune in Virgo). This means that January can indicate what the eleven months ahead are going to be, bearish or bullish. Research reveals the success rate to be about 80 percent. This does not work when there are crash periods, certain sensitive zones activated in panics and crashes. This will bring some turmoil, as will Saturn going through Capricorn, which also indicates delays. This is very helpful in determining what an individual stock will do, but there are three factors you need to learn in order to determine which stock to start with for the year. In most cases it’s better to buy a stock at the beginning of the year and ride with it because you can get a pretty good indication of the January influence.

Why is the January influence so important? Astrologically speaking, there is the trine aspect related to the year-end rally period. But it’s more than that. We have Venus at 5 degrees Taurus, Mercury at 23 degrees Taurus and the Sun at 27 degrees Taurus, and Mars at 18 degrees Virgo. These points are trine Capricorn. So January is important because there is a grand trine, a configuration that occurs when there arc three planets, each 120 degrees apart. As the Sun leaves the 5 degree Capricorn point that relates to the short rally it moves on to a trine to the NYSE Mars at 18 degrees, the NYSE Mercury at 23 degrees and NYSE Sun at 27 degrees. So this is why January is important in anything related to the Dow Jones Industrial Average. The trine also occurs in the U.S. chart with Neptune at 24 degrees Virgo and the Part of Fortune at 25 degrees Taurus. But the opposition to planets in Cancer show a turning point: and Capricorn rules government. These influences can be seen from about January 9 through January 18, as the Sun transits the pertinent degrees. If the market shoots up in January, it will be up in December; if it’s low in January, then it's going to be low in December, at year's end.
 

The Moon-Stats | Jack Gillen

Jack Gillen (2002) - There is a Moon statistic that falls into the 70 - 100 percent group but is closer to the 70 percent group, and that’s the Moon’s transit from Virgo to Pisces
 
Virgo to Pisces Moon Cycle 2019 - 2026
 
Therefore, if you are looking to go long with a stock it’s best to start during this period. For instance, in the year 2003, on the tables we have January 21st - February 3rd. This is indicating that at the closing price of January 21st would represent the Moon in Virgo, and the fact that you can have a big drop in the market with the Moon in Virgo, is the reason this is based on the closing price. Therefore, by going long during this period it is indicating to you there is a 70 percent chance that on February 3rd the Dow Jones Industrial Average will be higher [...] and if you have a stock you want to short, your best chance would be from the sign of Pisces to Virgo.
 
Quoted from:
Jack Gillen (2002) - AstroStats for the New York Stock Exchange.
 

The Mercury-Stats | Jack Gillen

Jack Gillen (2002) - Mercury goes retrograde approximately three times a year and causes a state of confusion, and after it goes back direct the market can explode into a bear or bullish market.
 
Mercury Retrograde

[...] in those years when Mercury is retrograding there is an 85 percent chance that the DJIA price at the time it goes direct will be higher than when it was retrograding. The same is true when Mercury is retrograding in the sign of Capricorn, which holds the same accuracy rate as the ten-year cycle from 1885. In the Mercury retrograde period, those dates in bold print have a 70 - 80 percent accuracy of having a higher Dow Jones price at the end of the retrograde cycle.

Quoted from:
Jack Gillen (2002) - AstroStats for the New York Stock Exchange.
 
See also:
Jack Gillen (2009) - The Key to Speculation on the New York Stock Exchange (2nd Ed.).
AstroSeek.com (2022) - Retrograde Planets 2022. 

Tuesday, December 13, 2022

The Sun-Stats | Jack Gillen

Jack Gillen (2002) - There are only two statistics related to the Sun falling into the group of the 70 - 100 percent accuracy. They were both activated in the United States chart on July 4, 1776, and the natal Sun is at 13-degrees of Cancer. On July 5th of every year the Sun transits 13-degrees of Cancer. This cycle has an orb of 13 - 22 degrees of Cancer, and the transit dates would be from July 7 - 15 each year. The price of the Dow Jones Industrial Average will be higher on the 15th then on the 7th, and from the period of 1987 - 2001 this trend was 86.6 percent accurate with an overall percentage of 72.8.

The next statistic has been 80 percent accurate over the past 100 years, and is based on the two degrees of Venus in the United States chart to the opposition of Capricorn at two degrees, and is dominant from December 24th - 31st. This is a long position, therefore the DJIA will be higher on the 31st than on the 24th. Since the period of 1900 - 2000, this pattern has only been wrong 20 times and this was in 1911, 1925, 1926, 1930, 1937, 1943, 1947, 1948, 1953, 1966, 1968, 1978, 1979, 1986, 1987, 1988, 1992, 1996, and 1998. Therefore, going long on December 24th, I know that I have an 80 percent chance of being correct, that on December 31st the market will be higher at the close.


[...] The New York Stock Exchange was born on May 17, 1792, at 8:52 am in New York under the Sun sign of Taurus. None of the Zodiac signs which the Sun transits falls into the 70 - 100 percent accuracy rate. The two highest are Pisces from February 19 - March 19, having a 63.33 percent accuracy over the past 50 years, and Capricorn from December 22 - January 20, having a 60.27 percent accuracy rate. Let’s look at some of the averages for the other Sun signs: Aquarius, January 21 - February 18, 54.50 percent; Aries, March 20 - April 19, 58.50 percent; Taurus, April 20 - May 20, 50 percent; Gemini, May 21 - June 20, the chance that the DJIA will be higher on the June 20th than on the 21st is only 48.48 percent; Cancer, June 21 - July 21, has 51.20 percent; Leo, July 22 - August 22, only 46.60 percent the lowest of all the zodiac signs; Virgo, August 23 - September 22, it is 52.27 percent; Libra, September 23 - October 22, has 52.70 percent; Scorpio, October 23 - November 21, is 51.50 percent; Sagittarius, November 22 - December 21, is 57.25.

Sun Transit from November 17 to May 17


Although these Zodiac signs don’t qualify for the 70 - 100 percent accuracy rate it does create another pattern that fits into this 70 - 100 percent group, and this is called trading with the opposition aspect. The opposition of Taurus is Scorpio, and on November 17th every year this would represent the opposite date. Therefore, if you are trading on the long side at the closing price of November 17th to the closing price of May 17th, chances are that you are going to be correct. If you are trading on the short side, you might want to trade from the date of the NYSE on May 17th, and short to the closing of November 17th. The period of 1980 - 2001, you would have been 81.08 percent correct on the long side from November 17th - May 17th, as only four out of the last 22 years did the Dow Jones not show a profit.