Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Distribution days

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Stock market caution is warranted here.  Folks should sit up and take notice whenever the Dow sheds 500 pts in two days.   But two days do not make a robust sell signal. Let’s look back a couple weeks for perspective. 

In this chart the S&P 500 has logged several distribution days in recent weeks, and they are marked with arrows. (Distribution days occur when the markets close lower in price, with higher trading volume. Action of leading stocks will color & nuance the analysis, so it’s not a black and white definition. YMMV.)   The intra-day reversal on May 19 (climb into movement highs on weak volume, then faltering and falling) at Point A was another signal for caution.  The May 19 action combined with the May 2 prior movement top give us a double top to work through before an advance can occur. 

Don’t hesitate to leave a comment or drop me an email if you have a question.

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Written by heyercapital

May 21, 2008 at 10:00 pm

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