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Mr. Wyckoff determined overbought and oversold by market action and was thoughtful about what he saw. I imagine he might have looked at the number of new highs on a given day and no doubt would have been very impressed that the number of new highs Friday was the most in at least 25 years. At that time 1982 it was the beginning of a new bull move that would last 18 years.
So what can we say here? The advance from February was on low to moderate volume until the week of April 12 when we advanced on increasing volume to the Thursday peak and I believe I wrote here about this being a buying climax. Monday was a selling climax and on heavy volume we have not advanced meaning that large investors are selling into the buying frenzy, just as Goldman sold into the buying frenzy in mortgage derivatives in 2007. The very large players who tied up so much stock that we could advance on small volume for months must take advantage of this large demand to unload. Demand is sufficient that we held above the old high of 7471.31 and we should anticipate more distribution on the advance to new high ground. The saturation point has not been reached but it is coming. I will show some charts that are more illustrative of the buying climax.
