Distribution days a la William O'Neil

4 Mar 2019

Hello everybody,
I am a big fan of the book "how to make money in stocks" by William O'Neil. He says that you can predict crashes by looking for distribution days. I am not totally sure if I got it right and happy to get feedback. I understand it the way that a day with a red candle which is bigger than the candle before is such a day. If you count 4 or more of them during a bull maket, the bull market can get into trouble. In January 2018 it worked quit well for me to buy some shorts. OK RSI was higher in the oversold territory but I agree with a lot of other here that we are now at major resistences and the economy is in general not in a good shape.

Let's see how it turns out this time....

4 Mar 2019

Not

OK by reading it again, it seem the candle can also be green if there is just a little movement in price. In 2018 there could therefore be one more flag between the 3rd and the 4th - on January 30th.

4 Mar 2019

Not

could also work in SPY

6 Mar 2019

Not

So I think this is the next day. We are fighting hard with the support of the Decembers high. If we pass it to the downside, I add shorts, if we pass the resistance from Novembers high, close my short position. And I would add shorts if we pass the 200MA after closing.
Happy trading