Zman Market Timing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zman Market Timing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: zman69 who wrote (4975)	1/11/2015 2:59:30 PM
From: Return to Sender	2 Recommendations Recommended By mary-ally-smith The Ox Read Replies (1) of 15903

I don't think we are seeing enough volume to suggest that what we are seeing is distribution. We head into actual earnings next week with a lot of the indicators that I follow showing plenty of reason to be concerned about which way the market is headed. But distribution is something seen as institutional investors shovel their shares into the hands of small investors certain that the market can do nothing but continue to advance. Now I will be the first to admit I think this stock market is wildly overvalued and due for a major correction but... We should see much more volume at the actual stock market top where distribution will be much more clear. That could happen soon enough as the weekly and monthly charts show. What exactly is a distribution day in a market index? investdaily.custhelp.com Distribution in the stock market refers to the increased selling of stock by large institutions. Distribution is indicated by one or more of the major market indexes closing down more than 0.2% on increased volume from the previous day. Our studies have shown that four to six days of distribution over a period of four or five weeks, are often enough to turn a previously advancing market into decline. Therefore, once you notice these signs of distribution, it is best to hold off on any further stock purchases, and perhaps even cut back on some of your positions, especially if you are on margin. Distribution days lose relevance over time and can be discounted as they age beyond 25 trading sessions, or when the market shows significant gains since the distribution day. Churning (or stalling) in the market indexes is also a sign of distribution. This occurs when a day's attempted advance stalls (shows very little change in price) on greater volume than the day before (or within 95% of the previous days trading volume). The index usually shows a smaller price increase compared to the prior day. Investor's Business Daily's article, The Big Picture, tracks distribution days and alerts investors to changes in market trend. IBD University has an entire chapter on the subject of market analysis -

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next