by Chuck Dukas
Some market behaviors are more common during
some market phases than others. Take a look.
Certain chart formations are often
associated with certain market phases.
Each chart has a personality of its
own,no two being alike, just as you
and I have our own personalities. I
assess the movement of stocks in four phases
(accumulation,markup,distribution, and mark-
down), and the crossing of the 50-period simple
moving average (SMA) indicating an intermediate
bullish or bearish trend exists. I use two periods of
closing price above or below the 50-period SMA to
confirm the move.
During the markup and distribution phases, prices
must be above the 50-period SMA, whereas during
the distribution and markdown phases, prices must
be below. I associate buying with the accumulation
and markup phases and selling with the distribution
and markdown phases.