An Example

This is an example of what Jim mentions in the video and what I mentioned about accumulation zones and locals spending some money to lower a stock back in to the accumulation area. Here's EDZ which came out of a bullish descending wedge and started trading laterally, which is an indication of building a base, even without 3C.

 This daly chart shows a lot more positive divergences then negative, it is an ETF that's been building a monster base.

However, the more detailed 15 min chart shows distribution to knock the ETF back down to levels where it is accumulated. They want to put together the position at a low average price and they can either sell some inventory to create a supply/demand imbalance or more likely, they can go short term short on the ETF making money on the way down until price s back in the area of accumulation. Jim talks about knocking down stocks and spending I think $8 or $10 million dollars to do it if I recall the video correctly, which is a drop in the bucket for a large hedge fund.

In any case, when I taught Technical Analysis for 3.5 years, I started my first class with this video. My students, once they understood what all the jargon was about, left the class severely disheartened, but I wanted to make it clear from the start what they are up against and why I don't watch CNBC. One they understood that all the Wall Street propaganda they've been sold over their investing lifetimes was a bunch of bull-carp, they could better align their thinking with the true nature of the beast. You must know your opponent. As it has been said, "Keep your friends close, keep your enemies closer.