What exactly is accumulation and distribution?
There are four market phases containing all price action. The accumulation phase has low range and volume and occurs at the bottoms of a prolonged bear market. We saw such a situation in gold, which made a long-term bottom after a 21-22 year secular bear downtrend. The bullish up trend move begins with increased daily range price bars and sharply rising prices above the highest highs of the previous twenty-day period. When we see that in a market, we know we are in a bullish uptrend phase, almost at the very beginning. Such a move could last for many years. The distribution phase has wide range price bars of extreme volatility where the traders, who accumulated the underlying at the bottom, distribute it to the lesser informed public. The bear phase begins when the market breaks sharply on wide range days below the lowest lows of the previous twenty days. There are four types of gaps, openings beyond the previous price bar’s range, corresponding to market phases: general day to day gap
