Market Review and Outlook (21/08-25/08)
Since the Nasdaq Composite Index peaked on July 19, everything has only been distributed... I call it the “distribution dominance tape.” In my experience, when few stocks are constructively established, few are performing well from breakout levels, and the index is heavily distributed (distribution dominates tape), you never want to risk too much money in this environment until you see a shift towards certain stocks. Personal settings accumulate and evidence of better action. For low-risk traders who use a relatively strict stop loss, the market doesn't have to fall too much to cause losses. Market fluctuations and market washings surrounding buying points are the most dangerous. Volatility is on the rise. If the sell-off accelerates, look for potential market lows when the VIX index doubles from its recent low (i.e. around 26). -Mark.Minervini (25/08/2023 update)
The high volatility of the market continued this week, and the deceptive shocks continued. Overall trading volume declined compared to last week (excluding NDX). Next, let's review the specific behavior of the major indices on the days when trading volume increased this week:
$S&P 500 Index(.SPX.US$ There was a slight increase in trading volume on Wednesday (below average). Prices opened higher, which was interpreted as a rebound; on Thursday, trading volume increased, and prices went sharply higher and lower, interpreted as distribution.
$NASDAQ 100 Index(.NDX.US$ The increase in trading volume on Wednesday (below average), and the price opening higher is interpreted as a rebound; the transaction volume increased on Thursday (above average), and the price went sharply higher and lower, interpreted as distribution.
$Nasdaq Composite Index(.IXIC.US$Trading volume increased on Thursday (below average), and prices were drastically higher and lower, interpreted as distribution.
$Dow Jones Industrial Average(.DJI.US$ There was a sharp increase in trading volume on Monday, and prices opening high and low (little change), which was interpreted as weak distribution; on Wednesday, trading volume increased, and prices opened higher, which was interpreted as a rebound.
When will the volatility end? What is the minimum point of a pullback? There's no need to focus on these unrealistic questions and let the market slowly give answers... In the long run, in the stock market, getting on the car later is much more efficient than getting on the car early on.
Finally, to quote another one of my favorite stock traders, David.Ryan (who has won the US Stock Investment Contest three times) at the end of his August 24 tweet: “QQQ hit a new high for the year on July 19, 2023. NVDA's earnings report marks the final step in the tech sector. Raise cash and take defensive measures.”
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iamiam : nice post
sTone83OP iamiam: Thanks bro
MY Brandon : “Distribution dominates the tape” translation by God
It took me a long time to figure out what you're talking about
sTone83OP MY Brandon: Here is the original article, I only care about the opinions expressed by these successful traders with many years of experience; the rest of the news and analysis is mostly “noise.”
sTone83OP MY Brandon: Since the Nasdaq Composite Index peaked on July 19, it has been distributed... This is what I call the “distribution dominates the market.” According to my experience, when you find that few stocks have formed a good pattern, not many stocks that have performed well from breakout levels, and at the same time that large numbers of indices are distributed (that is, distribution dominates the market), you shouldn't take too much risk in this environment until you see signs of accumulation and a shift in the good performance of individual constructs. For low-risk traders who use a relatively tight stop loss, the market doesn't have to fall sharply to incur losses. The market's fluctuations and back and forth movements around the buying point are the most dangerous. Volatility is on the rise. If the sell-off accelerates, when the VIX doubles from its recent low, it can look for potential market lows, which will take it to around 26.
This is a translation of ChatGPT, which is obviously a lot better