An Observation on the New York Composite

I would like to make an observation on the New York Composite ($NYA). Clearly, like so many instruments, we can identify a long range. And, as we all know, sideways trading ranges are either distribution or accumulation. I have given this a tentative Wyckoffian labelling (as distribution) so that we can identify some of its features, but we can’t be sure of its accumulation or distribution status until it moves more decisively out of the range one way or another.

That said, there is a feature that seems clear to me and I want to bring it to your attention, because it seems to me to be a very telling clue.

Just look at the price action as we move from left to right across the range.

Do you see how it goes from being less volatile to being more volatile? You can see that the violence of the moves (up and down) increases as time passes, yes?

And for Wyckoffians, that is often understood to be a symptom of the market being passed from strong hands to weak hands.

If that is true, it may mean that smart money has already left.

NYA

We won’t know this for sure without another breakdown, but if we see another sign of weakness, and a failed rally after that, this could be lights out.


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