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I was hoping someone would enlighten me on the difference. After a long
runup from the September lows it would not be unusual to see some
profittaking in the form of the 10/4 and 10/11 profiles. In the short run I
believe this weeks pattern was short covering and distribution, but this is
only a short term view and in the long term no doubt there is some
accumulation. The daily profiles this week are classic market profiles.
A short covering auction bar is a long one with a clump of prices at the
top. A distribution pattern is like the one on Thursday with a narrow range
and symmetrical profile. Friday has a double profile in the upper and lower
portions of the bar. Note the upper "distribution" looks like the one on
Thursday but at a lower price centroid.
bobr
----- Original Message -----
From: "Terry B. Rhodes" <trhodes3@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, October 12, 2001 5:48 PM
Subject: Re: [RT] [Bobr] sp500/nasdaq
>
> ----- Original Message -----
> From: BobR
> To: realtraders@xxxxxxxxxxxxxxx
> Sent: Friday, October 12, 2001 11:00 AM
> Hi,
>
> I agree with your analysis RE short covering and consolidation,
> but believe we are seeing accumulation, not distribution.
> Experience leads me to believe proper identification of one or
> the other is very difficult but is the key to successful trading.
>
> Could you please elaborate on how you differentiate accumulation
> from distribution? I am certainly no expert here.
>
> regards,
>
> tbr
>
>
>
> Subject: Re: [RT] sp500/nasdaq
> ----- Original Message -----
> > From: BobR
> > To: realtraders@xxxxxxxxxxxxxxx
> Sent: Friday, October 12, 2001 11:00 AM
> Subject: Re: [RT] sp500/nasdaq
>
> > Looking back over the last 7 trading days shows this pattern, short
> covering, distribution, 3 days of consolidation, short covering,
> distribution. Correct me if I have the definitions wrong. In
> market profile
> theory, a distribution occurs when prices have a tight
> symmetrical pattern
> following a run up like Thursday and Wednesday and previously on
> 10/3 and
> 10/4. A consolidation implies a pullback after a runup as on the
> 5th, 8th,
> 9th. If Thursday was infact a distribution, then Friday and ???
> would have
> consolidation, perhaps.
>
> bobr
>
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