From a energy trader I follow at times:
Rock4it / Susan Natural Gas" Distribution"
Joe K - Friday at 8:30 PM
Not a fundamental ! A reality for markets. Every market goes through the four phases. Stocks and commodities, doesn't make a difference.
The 4 Market Phases are :
1) Accumulation
2) Markup
These are the Buy Phases
3)Distribution
4)Markdown
These are the Sell Phases
In Order, any and All markets go through these 4 phases. In Numerical Sequence as well.
Just like there are the 4 seasons to Life, the markets have four distinct areas as well.
The tricky part is really catching the turn and indentifying it through price recognition, and of course, Volume.
Natural Gas is in the Distribution Phase, and soon entering the Markdown phase. Actually over-laying , and I personally believe we are in the Markdown Phase right now.
Charecteristics of Markdown Phase :
Volume dries up on rally attempts, and is accelerated on declines. Declines are sharp and volatile, usually 3 to 1 ratio to the downside, The major Trend comes to an end.........
Markdown Chart Patterns you might see .
Descending Triangle , Symmetrical Triangle,
Rising Wedge, Downside breakaway gap ( exhaustion gap ) Bearish Flag , Pennant
Good Trades ! |
