Market Review and Outlook (21/08-25/08)
Since the Nasdaq Composite Index peaked on July 19th, everything has been in distribution... I call it the "distribution-dominated tape". Based on my experience, when you have few stocks building constructively and few stocks running well from breakout levels, coupled with the index being in a lot of distribution (distribution-dominated tape), you never want to risk too much capital in this environment until you see evidence of a turnaround in certain stocks. Personal setups and better action. For low-risk traders who use relatively tight stops, the market doesn't have to decline much to cause losses. Market volatility and washout action around the buy point are the most dangerous. Volatility is increasing. If selling accelerates and the VIX index doubles from recent lows (around 26), look for potential market lows. - Mark Minervini (Updated on 25/08/2023)
This week, the market's high volatility continues, deceptive fluctuations continue, overall trading volume has decreased compared to last week (except for NDX), and now let's review the specific behavior of major indexes on days of increased trading volume this week:
$S&P 500 Index (.SPX.US)$ On Wednesday, trading volume increased slightly (below average), prices opened high and continued to rise, interpreted as a rebound; On Thursday, trading volume increased and prices opened significantly higher but closed lower, interpreted as distribution.
$NASDAQ 100 Index (.NDX.US)$ On Wednesday, trading volume increased (below average), prices opened high and continued to rise, interpreted as a rebound; On Thursday, trading volume increased (above average), prices opened significantly higher but closed lower, interpreted as distribution.
$Nasdaq Composite Index (.IXIC.US)$On Thursday, trading volume increased (below average), prices opened significantly higher but closed lower, interpreted as distribution.
$Dow Jones Industrial Average (.DJI.US)$ On Monday, trading volume increased significantly, prices opened higher but closed lower (with small changes), interpreted as weak distribution; On Wednesday, trading volume increased, prices opened high and continued to rise, interpreted as a rebound.
When will the volatility end? What is the lowest point of the pullback? There's no need to focus on these unrealistic questions, let the market slowly provide the answers... In the long run, in the stock market, getting on the train later is much more efficient than getting on early recklessly.
Finally, quoting one of my favorite stock traders David Ryan (who has won the US Stock Investment Championship three times) at the end of his tweet on August 24th: 'QQQ hit a new high for the year on July 19, 2023. NVDA's financial report marks the final step in the technology field. Raise cash and take defensive measures.'
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iamiam : nice post
sTone83 OP iamiam : Thanks bro
MY Brandon : “Distribution dominates the tape” translation by God![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
It took me a long time to figure out what you're talking about
sTone83 OP 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.”
sTone83 OP 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