Re-Accumulation & Re-Distribution Range Patterns | Richard D. Wyckoff

 S&P 500 E-mini Futures (daily bars - May 23-August 30, 2024) — 40 Week Hurst Cycle Trough on August 5th.

Martin Armstrong's DJIA Aggregate topping Week August 26-30 and Panic Cycle Week September 9 - 13.  

US Stock Market Seasonality negative into late October (Jeff Hirsch & Martin Biber).

S&P 500 E-mini Futures (4 hour bars - August 15-30, 2024) — Distribution or Re-Accumulation:

Distribution Schematic #3 in Phase C or Re-Accumulation with Spring Action in Phase D ?

 

   The 4 Phases of Richard D. Wyckoff's Market Cycle:

(1.) Accumulation, (2.) Mark Up, (3.) Distribution, (4.) Mark Down.

The Re-Accumulation process is exactly identical to the Accumulation process. The only difference between the two is the way the structure begins to develop. While the Accumulation range begins by stopping a bearish movement, the Re-Accumulation range begins after the stop of an upward movement. To put it another way: A Re-Accumulation occurs during a longer-term up trend, which will continue in the future. The main street is finally on the right side as well. Inside a Wyckoff Re-Accumulation schematic, buyers are closing parts of their long positions and sellers are joining the market. With the incoming selling positions, market makers can fill new long positions again.

 4 Types of Re-Accumulation Ranges a.k.a. Continuation Patterns a.k.a. Trend Continuation:

(1.) Re-Accumulation after a Decline.
(2.) Re-Accumulation with Spring Action.
(3.) Re-Accumulation after a Shakeout.
(4.) Re-Accumulation with an Uprising Structure.

The 4 Re-Distribution types are simply the opposite (lower 4 schematics):

(1.) Re-Distribution after a Rally.
(2.) Re-Distribution with Spring Action.
(3.) Re-Distribution after a Shakeout.
(4.) Re-Distribution with a Declining Structure.

 Examples of different types of Re-Accumulation Patterns in the Apple (AAPL) Weekly Chart.

 

The events and phases are still the same (see the Accumulation and Distributions Schematics - the last 4 charts). Only the beginning of the Re-Accumulation cycle is different and equals the start of a distribution cycle. Take a look at the Wyckoff distribution schematics below for the occurring events. The main events that differ from an accumulation or distribution cycle are the occurrences of the Creek. The Creek is a small trend over time and can equal a smaller consolidation. The Creek builds liquidity on both sides of the market and misleads market participants. The Jump Across the Creek (JAC) is the event that causes the SoS. The Jump Across the Creek does take out previous resistance lines with a strong up move. The Jump Across the Creek can also occur inside the trading range of the accumulation. The Creek can be the horizontal resistance defined by Phases A and B or an internal trend line that formed inside Phase B.

• After the spring and test events, there is a bullish price move with momentum. This is called the Jump Across the Creek. Price continues with a bullish Phase E.
• Usually, any shakeout and/or decline action before Re-Accumulation will have a local smaller distribution pattern (cause and effect).
• The Initial Shakeout/Decline is less pronounced during Re-Accumulation than before Accumulation.
• Volume: Re-Accumulation usually has less supply than Accumulation.
• The maximum swing of trading range (highest to lowest point): Re-Accumulation trading range is usually tighter compared with an Accumulation trading range.

 (1.) Re-Accumulation after a Decline

 

• Weakest among the Re-Accumulation types.
• Decline usually starts from a small local distribution pattern.
• It can have different variations of the trading range (see the structure of the next 3 formations).

(2.) Re-Accumulation with Spring Action

 

• Flat or sloping down formation.
• It can potentially have a few lower lows with a spring being the lowest point of the trading range.
• Leading stocks can exhibit short-term weakness after strength in this formation.

(3.) Re-Accumulation after a Shakeout

 

• Absorption of supply happens in the trading range without violation of support.
• Usually and depending on a position of the market, this pattern exhibits strength.

(4.) Re-Accumulation with an Uprising Structure 

 

• Re-Accumulation with an Uprise is the strongest Re-Accumulation type.
• This structure will exhibit higher highs / higher lows.
• Sometimes can be confused with a topping trading range (Distribution).

 

 

 Accumulation Schematic #1: Phases A and B.

 Accumulation Schematic #1: Phases C, D and E.

 

 Distribution Schematic #3: Phases A, B, C, D and E = the Inversion of the  Accumulation Schematic #1

 

The Re-Distribution occurs inside a markdown cycle and stops a down-trend for a longer period. After bigger price moves even Main Street joins the trend. Now it is time for the market makers to bring the price into a consolidation phase to scare sellers and bring in new buyers. That ensures new liquidity for the institution’s to place new short orders. The start of a Wyckoff Re-Distribution schematic is the same as an Accumulation cycle. A Creek inside the trading range creates liquidity on both sides of the market, which gets taken by a UTAD. Many people will see this as a break-out to join bullish price action, but don’t get fooled. With a Jump across the Creek, the price is not only returning into the trading range but going to continue the downtrend from before.

 

 

  Distribution Schematic #2: Phases A and B.

 

 Distribution Schematic #2: Phases C, D and E.

 

Many believe that simply labeling the events is sufficient for detecting Wyckoff cycles. Don't forget that a supposed Distribution can become a Re-Accumulation or an Accumulation a Re-Distribution. Therefore, it is essential to presuppose a fundamental market analysis and confirm a Wyckoff cycle with COT data, Seasonality, or other longer-term confirmations. Don't make the mistake of looking for Accumulations and Distributions in lower time frames. It is easy to draw a supposed accumulation on a 5-minute chart, but a real Accumulation takes place in higher time frames. Since a Wyckoff cycle takes time to unfold, wait for the events to occur and be fully validated. Otherwise, one quickly get s distracted by the noise within the actual moves and makes bad trading decisions in the worst case. 

 

Bruce Fraser (January 30, 2020) - Distribution or Re-Accumulation? 

Reference:

Richard D. Wyckoff (December 21, 2022) - Accumulation & Distribution Schematics.

Jim Forte (1994) - Anatomy of a Trading Range.
Hank Pruden & Max Lichtenstein (2006) - Wyckoff Schematics - Visual Templates for Market Timing Decisions.

WyckoffAnalytics.com (2022) - Richard D. Wyckoff - His Method and Story.

Matt LeTrader (2022) - Composite Man: A Journey through the Trading Range. 

Roman Bogomazov (2022) - Wyckoff Method Trading and Education.

Buy & Sell Signals | Larry Williams

 Buy Signal: Dump, dump, (dump), go sideways and pump a bit, one more small dump, then the pump.

Sell Signal: Pump, pump, (pump), go sideways and drop a bit, one more small pump, then the dump.

»  If I've seen prices in a big downtrend, they move sideways, then drop again, but immediately come back up, back into that trading range, that's a buy signal. Why? Because during that trading range, there was accumulation going on. The fact that it broke down fills a lot of long positions. Professional money will buy there, and if it immediately comes back, then that nails it. They've been buying and I want to get long the market.  «

Quoted from:
Larry Williams (2016) - Buy Signal. (video)

 

See also:

Larry Williams (1998/2011) - Long-Term Secrets to Short-Term Trading, 2nd Edition.

ICT Market Maker Buy Model and Sell Model (MMXM) | Darya Filipenka

These six videos of the ICT Market Maker Buy Model (MMBM) and Sell Model (MMSM) series on @I_Am_The_ICT / YouTube Channel is all you need to understand the market:

 

 

1. ICT Charter Price Action Model 6 - Amplified Lesson

2. ICT Charter Price Action Model 6 - Algorithmic Theory

3. ICT Charter Price Action Model 6 - Universal Trading Model 

4. ICT Charter Price Action Model 6.2 - Amplified Lesson 

5. ICT Charter Price Action Model 6.3 - Supplementary Lesson

6. ICT Mentorship 2023 - Market Maker Models

 

 

 The ICT Market Maker Buy and Sell Model (MMXM) pairs very well with the ICT Advanced Market Structure.

 

Reference: 

Darya Filipenka @ Twitter/X

Darya Filipenka (2023) - Unlocking Success in ICT 2022 Mentorship: The Smart Money Guide to the Full ICT Day Trading Model.

Nasdaq 100

Nasdaq 100 (monthly bars). Yearly, Quarterly, Monthly Highs and Lows and Targets. First month up.

Cup & Handle pattern? No.  

 

 

 

 Nasdaq 100 (weekly bars). Four weeks up. Current inside.

Nasdaq 100 (daily bars)

 

Nasdaq 100 (1 hour bars) - Last week narrow range. This one still inside. Close above balance line. 

 

Wednesday, Thursday, Friday 'Major Red News'.

 

 

US Stock Indexes | Shallow Retracement Into Early-Mid-December Now Likely

Dow Jones Industrial Average (weekly bars)

Dow Jones Industrial Average (daily bars)

Monthly weekly and daily trends are up. 

S&P 500 (weekly bars)

S&P 500 (daily bars)

Eleven days, three levels and nearly 6 * ATR above the re-accumulation low of November 9.

 

Nasdaq 100 (weekly bars) 

Nasdaq 100 (daily bars) 

CNN Fear & Greed Index (daily bars).

 NYSE McClellan Oscillator (daily bars)

 

CBOE Volatility Index (monthly bars). Very close to multi-year lows.

SPX Put/Call Ratio = 1.63 for Nov 24 2023.

 

 Seth Golden (Nov 25, 2023):
The Trifecta of Overbought Conditions:
92% of SPX above 20-DMA, highest in 2+ yrs
McClellan Oscillator > 80+
S&P 500 2 std. above 50-DMA (RSI also 70+)

 

 

 

Four weeks+ of price expansion beyond daily, weekly and quarterly levels. Last week narrow daily and weekly ranges. Multi-month inflation melt-up? Possible. Allen Reminick suggests a creep up into November 27 (Mon) or December 1 (Fri) followed by some rather shallow 23-50% move down into December 8 or mid-month, some X-mas rally, sideways into January 12 and up into March-April 2024. Possible. [ Allen Reminick (Nov 20, 2023) - S&P 500 Projection Into June 2024 ]

 

See also:

Richard Wyckoff's Distribution Schematics. 

The Three-Day Rolling Pivot Level | Mark B. Fisher

 

Mark Fisher is no ordinary trader. The ACD trading system (an opening range breakout concept) he described in his 2002 book The Logical Trader is the one he and his 75-plus traders at MBF Clearing Corp. still use to make a living on the New York markets day in and day out. Does it work? Ask anyone at Fisher's firm, and they'll tell you it does. Unlike many in the business of helping traders, Fisher is happy to share his system because he believes the more people there are using it, the more effective it will be. However, the following is not specifically about Fisher's ACD system, but about his Three-Day Rolling Pivot concept (from the same book) and the general function of balance levels in daily and weekly market maker templates, about the market maker algorithm, and the origins and basic rationale of short-term trading. The 'rolling pivot' is an extension of Fisher's pivot range concept. 

 

In the charts above a Six-Day Moving Average defines a mathematically exact balance level for all segments of the weekly and daily market maker cycles. The same is true for the balance levels defined by Fisher's Three Day Rolling Pivot, by the Weekly Pivot and by the Daily Pivot. All four govern market structure and price action within and between the trading days inside the weekly cycle. Balance levels, market structure and price action reflect the market maker logic and the process of auctioning the order flow. These balance levels can be utilized in many ways, such as to determine entry points, stops and trailing stops. Is the current price out of balance, what is the distance towards these balance levels? Price is always being moved between 'liquidity pools' and (re-) balance levels. Across hours, sessions, days and weeks the market maker orchestrates the exact same eternal recurrence of the accumulation-expansion-distribution-retracement-cycle between round numbers or levels (e.g. 0, 25, 50, 75; 0, 10, 20, 30 or 0, 20, 40, 50) also known as the pump & dump cycle.

 

3 Bar Patterns - the smallest fractals of market structure. Inside bars are ignored, the last bar of a fractal becomes
 the first of the next. Where are the round number levels, the breakout levels, liquidity, the balance levels?

Identify in the above charts day-trading, short-term trading and swing trading setups. Define price targets, entry-, exit-, stop-levels, profit/loss ratios. Be sure everything is logically solid and proportionally related to daily and weekly highs and lows and the balance levels.

 

» All my life I've been a 60/40 player, content to clear my 20%. «   -  Jesse Livermore

Programming the Livermore Market Key

Richard D. Wyckoff's Composite Operator a.k.a. Market Maker a.k.a Broker manages the order flow of 'buyers' and 'sellers' with a price generating auction algorithm realizing the highest mathematically possible return in 'dealing' with the flow of orders. Later on in life Wyckoff became a broker and market maker himself. His schematics and Jesse Livermore's tables illustrate the complete logic and algebra of the market maker's auction process and the pump & dump cycle. The auction algorithm works ever since it was invented. Livermore was able to do the math without calculator, paper and charts. Aged fourteen he started as a quotation board boy at a Boston brokerage business and literally saw patterns in the waves of numbers flowing each day from the ticker tape. Livermore came to understand that scheme generates more profit than any other business activity ever known to man. Fifteen year old Wyckoff had also begun as a broker’s runner to soon experience the exact same epiphany. Market makers were tremendously successful in multiplying their returns with the invention of electronic exchanges and with the invention of the daily global scheme between the 'Asian Session', the 'London Session', and the 'New York Session'. Wyckoff, Livermore and W.D. Gann were contemporaries, trading the same commodities, stocks and indices in the same exchanges. All were initiated into the auction algorithm. Wyckoff and Livermore were larger-than-life traders while Gann's true returns have always been subject of debates. He sold many expensive courses and forecasts. And what he sold to subscribers and students and how he actually traded for a living were very different things: Gann traded a double-tops-and-double-lows-in-the-direction-of-the-daily-trend-strategy - plain and simple pump & dump trading Wyckoff-Livermore style. What should we learn from all this? Maybe the lesson is to keep things as simple as possible as Tom Hougaard suggested.

 

Market maker pump & dump levels.

The accumulated length of the intraday price swings in the 1-minute chart of any instrument exceeds the daily true range several dozen times every single day. Imagine the factor on sub-1 minute time frames without having to deal with slippage nor transaction costs. Let that sink in. How is that possible? Understand the opening range concept and the logic and purpose of 'breakouts' and 'false breakouts' from that range. Monday's high and low define the opening range for the week; the high and low during the first thirty minutes the opening range of a session; the first three trading days of a new quarter limit the quarterly opening range; and the range of the first trading week of the year becomes the yearly opening range. Know the logic, principles and precision of price action and of market structure as taught nowadays e.g. by ICT or Stacey Burke: Price moving in one direction always creates the exact same imbalance on the opposite side. Imbalances are re-balanced by retracements of at least 50%. Price expands in proportions of 1/8ths or 1:1, 2:1, 3:1 etc. Price is always timed and measured and moves across all times frames always proportionately to the above listed opening ranges towards (re-) balance levels. Three and nine minutes are fractals within the hour; three hours a fractal within a session and the trading day; three and nine trading days are fractals within and across weeks; three and nine weeks fractals within months and quarters. Ideally Wednesdays and Fridays are timed for ending and re-starting three day fractals within the weekly market maker template.   

 

Calculation of the Three-Day Rolling Pivot:

Three-Day Rolling Pivot Price = (three-day high + three-day low + close) / 3
Second number = (three-day high + three-day low) / 2
Pivot differential = daily pivot price – second number
Three-Day Rolling Pivot Range High = daily pivot price + pivot differential [omitted in above charts]
Three-Day Rolling Pivot Range Low = daily pivot price – pivot differential [omitted in above charts]

The Probabilistic Mindset of Successful Traders - Mark Douglas

Reference:
Mark B. Fisher (2002) - The Logical Trader: Applying a Method to the Madness.

Mark B. Fisher (2002) - Spotting Breakouts As Easy As ACD.

Jesse Livermore (1940) - How To Trade In Stocks. 

Richard D. Wyckoff (1931) - The Wyckoff Method of Trading in Stocks.

 

Mark B. Fisher