What are the signs of accumulation and where (what site & how) can we see it? (August 1, 2001)
The site to see signs of accumulation is right here. We look at the indexes and individual stocks each session and determine if institutions are accumulating stocks or not. There are telltale signs when an institution is buying, or as Jay calls them in our online seminar series, 'institutional footprints in the sand.' One of the primary sources is simply looking at how price action and volume relate to one another each session and over a series of sessions. When the market rises on overall higher volume versus falling on lower volume, that shows there are more net buyers than sellers in the market. This also happens with individual stocks. We can tell over a series of weeks if institutions are net buyers of stocks or net sellers. We also compare relative volume on up sessions and down sessions; it is not enough to simply note that volume was higher on one session without looking at that volume relative to the previous move. Was it higher on this buying day than on the previous sessions of rising volume when the market was selling?
Beyond just price and volume we have to look at where they closes are in the trading range, we look at things on a weekly basis, we look at block trades, summaries of what the mutual funds are buying and selling, etc. Again, we look at several factors to determine this, but it is not rocket science. It is simply sitting down and looking at the evidence that is there but that must be pulled together to make sense of it all. It does take a bit of work, but anyone can do it. We cover it in detail in our Technical Analysis seminars, and when you see it you suddenly realize what is going on in the market.
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