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 giant Buy Side Institutions using Dark Pools, which builds bottoms with Quiet Accumulation. Oftentimes those candlestick 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 TechniTrader Volume Accumulation Indicator TTVA is not included in this chart. When you use Volume as an indicator, High Frequency Trader Volume is easy to identify on a daily view chart. It will show very long spiking bars both green and red, as long as the Volume Bars are not truncated.
The new candlestick “Basing Bottoming Formation” begins after the big gap down, seen on the far left side of the chart. High Frequency Traders caused the gap. They are computer algorithms that triggered millisecond orders. See the chart example below.
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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