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I'll respond to this after the market closes today. Just briefly, there are many stocks that are either "overvalued" or "undervalued" based on certain criteria. But as a technical trader, I can't give that much credence. because if a stock is worth $30 but trading at $1, there's a reason why it's trading at $1. Price is key as it shows what the stock or commodity is worth at the present time.
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
The most recent "Climactic Volume" you marked is actually your sign of weakness, and not climactic volume. The sign of weakness characteristic is increased volume and increase bar length. Climactic volume would indicate the ending of a trend. It is part of the process of distribution, as you identified in the rest of the chart. Everything else I agree with. Good job!
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
Wouldn't an increase in bar length as well as volume be a bullish sign? Is it weakness in this case because of the resistance level to the left it could not close above.
In the example presented, he showed a buying climax. The subsequent action after a buying climax would be a sign of weakness if the bar length and volume increased. This would not be bullish. The key would be the retest after this bar if it is weak or not. If the rally is weak (light volume and small price range), this would then lead to LPSY. If the market takes out the buying climax area and begins to mark up, that wide bar and high volume would be considered a shakeout bar.
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
Thanks a lot in advance. I appreciate your help!
My $1 example was trying to say that if MSFT does a 1:32 stock split, it will trade at $1, but still no one can manipulate it, so may be it is better to use market cap instead of stock price to determine if a stock is suitable for Wickoff analysis?
Now looking at BAC again, I think I am confusing long term (5-10 year pattern) to intermediate term (6 month - 1 year pattern). What I really meant was that in the very long term BAC doesn't look bad, but in the intermediate term, it actually looked like a good short candidate. Buying climax at $10, and now heading down. Sideways looks like a re-distribution pattern. Do you think so?
A stock that trades from the mid-fifties to five dollars can not be considered a bullish stock in any time frame. BAC may have bounced from $5 to $10, but when you look at the big picture, if you wanted to be bullish, it will take a very long time to overcome the bearishness of the stock. If this was a stock that was in R&D and had a "wonder drug" coming out, then maybe you could see a retest back to the highs quickly. But considering this is a very largely held institutional stock, it would take a complete turnaround for this to become bullish again IMO. So to me, this stock will stay in a trading range for a long time.
Regarding manipulation, I would agree with you regarding your example with MSFT. I am basically responding to the technical aspects of the market and how low priced stocks can be manipulated with greater ease than a more established stock. When I refer to manipulation, this doesn't mean that it's illegal. Stocks are manipulated every single day, but most times, legally.
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
Thank you Gary.
Your comments as well as my own judgements from the daily volume chart shows that BAC is bearish at least in intermediate term, so I am thinking maybe it is time to consider a short position.
After dropping about 20% from $10 to $8, it is in a sideways market for the past 6 days. Now the question is whether this sideways move is a re-distribution or an accumulation?
Please see my attached chart, which is the 15 minute chart for the past 5 days. I am trying to figure out signs that market manipulators trying to build short positions, but it is kind of unclear to me. Could you please take a look?
Wyckoff says that this is usually unclear until near the end of the accumulation/distribution phase, so maybe we should just wait for a few more days?
It appears to me that from your chart, the waves to the downside are more pronounced than the waves to the upside. Meaning, as large interest built a bearish position, they will defend resistance, and this stock appears to be doing that. As mentioned earlier, I think BAC will have a prolonged trading range.
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
It is a bit confusing to me because things seem to be quietly changing to the bullish side. Today we see health volume pushing the stock up. As we approach the close, the stock pulls back with much lower volume. I think this says that the tide probably have turned, and we may see the stock going back to $10 soon?