Dark Pool Quiet Accumulation Builds Stock Bottoms
During Trading Range Market Conditions when several industries are in their own Bear Market while other industries are continuing a Bull Market, determining when a stock has reached a final low or near the final low is critical for Swing Traders.
They typically will be selling short into a bottom and then switching to buying long with Momentum Trading, as a stock hits the final low and moves with momentum or velocity action out of the extreme low in one of the new bottoming formations in the Stock Market.
One factor that Technical and Retail Traders need to recognize is the dominant influence of the Dark Pools, which build bottoms with Quiet Accumulation. Oftentimes their patterns are hidden from Retail Traders using older style indicators such as MACD, Stochastic, and Average True Range ATR.
By incorporating a few Leading Hybrid Indicators, Retail Traders can see what Professional Traders see in Quantity Analysis. The chart below is an excellent example of price trending down and then starting a base.
The Basing new bottoming formation begins after the big gap down caused by High Frequency Trading. High Frequency Trader volume is easy to identify on daily view charts so long as the Volume bars are not truncated.
Martha Stokes CMT
TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock
Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses
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