After the distribution and markdown (discussed in previous posts), we have had a selling climax (SC). This is noted by the high volume and capitulation of the market. Now we are seeing an automatic rally (AR) from the SC lows. This should back up (BU) to the previous distribution trading range. Once this is done we could see a trading range form (fluctuating within the bounds of the SC and AR) which we then can evaluate to determine if it is a redistribution or accumulation trading range. A number of stocks are rallying and we will watch for the retest to go short to test the SC lows.
