Richard Wyckoff investing style was pure, he wished to invest in the market when he new prices were about to be marked up (or down), and he would hold his position until the mark up process was completed. Wyckoff wished to avoid being the market during periods of accumulation and distribution solely due to the increase in uncertainty that these market phases incurred. At this point in time, if he was trading today we believe he would be in 100% cash, and watching for a possible short position (in our view).
We believe Richard Wyckoff would have gone to cash the day after Ben Bernanke speech marked at number (2) on the chart, not for the sole reason of Bernanke speech but more so there was a break in the lower red channel line which signifies the end of the current mark up period. Sure there are a few more rules to be considered, but the break of the lower channel red line is the canary in the coal mine test.
A solid break of 125.50 on the SPY, would signal more serious selling. We suspect that a bounce by the ever faith full bulls off the 1x1 Gann Angle is likely. Hey it did twice before, why not a third!
NOTE: 1x1 Gann Angle and daily SMA 200 moving average is giving the same support price ($125.50).
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SPY (SP500 etf)