Is A Wycoff Distribution Starting to Form on NDX?
As I've posted before, I'm not ultra bullish on crypto. The volatility is great for traders, and technology is gaining acceptance which is exciting, however, I've never bought into the endless talking heads claiming BTC is going to 100K tomorrow..."the big green bars are on their way". My biggest concern is the context crypto has thrived. Since its inception in 2010, its always been traded within one of the greatest bull markets in history. Can it thrive outside of a bull market? If I were sure the bull market will continue, I'd be the first to recommend HODL, DCA etc. But I'm not so sure.
The NDX has seemed unstoppable. I've been short both it and the DJIA while trading crypto long. Its been a hedge that has never been profitable. I figure when those investments start turning around I'll start paying attention to the overall market. The NDX has been amazingly resilient, however, there are warning signs starting to add up.
1. The major reversal bar at the last ATH is my first red flag
2. The correction that followed the ATH reversal candle wasnt severe by most standards, however, the recovery was my 2nd red flag. It only recovered to the .702 fib. That's a big red flag for me.
3. Price action lacks vitality. Bars are closing on their lows, and intraday rallies are falling short or get wiped out completely. This isnt normal for the NDX.
The pattern I show is the beginning of a Wycoff Distribution. I've seen it so many times that it has become a tool to validate a reversal that dont just turn on a dime. I dont think the NDX is doomed. Its probably going to shoot to a new ATH and amaze me again. But just for the heck of it, I'm going to see if the Wycoff develops further.
The NDX has seemed unstoppable. I've been short both it and the DJIA while trading crypto long. Its been a hedge that has never been profitable. I figure when those investments start turning around I'll start paying attention to the overall market. The NDX has been amazingly resilient, however, there are warning signs starting to add up.
1. The major reversal bar at the last ATH is my first red flag
2. The correction that followed the ATH reversal candle wasnt severe by most standards, however, the recovery was my 2nd red flag. It only recovered to the .702 fib. That's a big red flag for me.
3. Price action lacks vitality. Bars are closing on their lows, and intraday rallies are falling short or get wiped out completely. This isnt normal for the NDX.
The pattern I show is the beginning of a Wycoff Distribution. I've seen it so many times that it has become a tool to validate a reversal that dont just turn on a dime. I dont think the NDX is doomed. Its probably going to shoot to a new ATH and amaze me again. But just for the heck of it, I'm going to see if the Wycoff develops further.
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