Let’s look back at 2016, Wyckoff style. As Wyckoffians, our mission is to sharpen our skills and to gain some ideas about how 2017 could unfold. The past year began with a stiff correction that cascaded into a Selling Climax in January. A classic Accumulation formed between January and March when the large informed interests of the Composite Operator absorbed stock. Once the absorption was complete the market (here we study the S&P 500) jumped into an uptrend. Calculating the Point and Figure return potential, the S&P 500 generated a Cause of over 19% (this price objective was exceeded in mid-December).
Following the Accumulation and the jump into an uptrend, two Reaccumulations formed during the year. Each Reaccumulation was over two months in duration and resulted in the continuation of the uptrend. We look to these stair stepping pauses to generate PnF counts that confirm the price objective of the Accumulation (click here for more on Stepping Stone Confirming counts).