Day By Day Look, At Potential Reversal
Using a method presented by the late David Weis in his training video (still available, linked here), we’re going to look at specific days on the daily chart of IYR, shown below.
In brief, the method looks at price action (and volume) on specific days, then formulates an assessment using Wyckoff analysis, on next move probability.
Real Estate, IYR, Daily
This is how it looks with no markup. Force Index, shown in the lower panel.
We’re going to address each numbered bar of the price action shown.
Price action penetrates resistance (blue line) on moderate volume and posts a sharp upward spike on Force Index.
Such action can be labeled as a breakout or up-thrust (potential reversal) position.
After hovering and then testing the breakout resistance/support level, price action attempts to pull away and move higher … but it’s unable to close higher and volume contracts.
Force Index as a result, posts a significantly lower peak than three trading sessions, prior.
This is the first sign of trouble to the upside.
Three sessions later, IYR attempts to move higher again.
This time it’s able to close higher but volume contracts again and posts a lower Force Index.
This is the second sign of trouble to the upside.
Five sessions later after IYR comes back down to resistance/support there’s another attempt to move higher.
This time, the range has narrowed while volume increases and subsequently posts yet another lower peak on Force Index.
Narrow, labored upside action with increasing volume suggests the market’s under distribution.
The day before price action bar No 4., this post was created to indicate real estate IYR, may be in position for downside reversal.
On the day labeled No. 4, a short position was opened via leveraged inverse fund DRV as DRV-22-01, with current stop at last Thursday’s DRV low of 32.64 (not advice, not a recommendation).
Heading Into Monday
The futures market is now about one hour into the Sunday night session.
The S&P is trading down 15 – 16 points or about – 0.36%.
Let’s see if that negative bias carries over to the Monday open.
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Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point®, trade mark: No. 6,505,279