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Trend Following Stock Markets Suffer a Distribution Day

After a follow through day as we had on Friday one would have thought the market would be starting to rebound. However in my weekend review I thought at best there would be a retest…Maybe we are setting ourselves up for that.

From a trend following standpoint, all the major averages opened lower and […]

Definition of a Distribution Day in the Stock Market

I have been asked by many of my students the definition of a Distribution day in the Stock market. A Distribution day is a decline of at least 0.2% in higher volume. This signifies that the Institutional Big investors are “distributing” shares or in other words liquidating their positions. When we have more than 4 […]

Why Did the Stock Market Sell off So Hard? $QQQ

Does the stock market really need a reason. Just look at Sonic. They reported good earnings and the stock tanked. One key has been the preponderance of Distribution days. They have been in the 6 range in both the SPY and QQQ. Caution should be exercised at this juncture and trades should have exact pre […]

Another Day in the Stock Market and Another Distribution Day in Choppy Trading $SPY $QQQ

Another Distribution day in the Nasdaq. This signifies further institutional selling. The sidelines look better than being in the stock market from a trend following stand point….We want to follow the trend. This is what trend followers do…