The range in the JSE Top40 index that started in April 2015 seems to be a distribution range. Following the Wyckoff logic, we could have seen an Upthrust After Distribution (UTAD) and test at the highs at the end of 2017 / beginning of 2018. Now we see an increase in the spread to the downside of 8 to 11 to 12 to 19% indicating a bearish Change of Character (CoC)Using the total sum of volume for Top 40 stocks there is also an increase in volume during these moves to the downside indicating that stocks have been transferred from strong to week hands. Since the last down move, we have seen a week attempt to rally. My bias for 2019 is that the Top 40 could see a resolution of the trading range to the downside. How the current potential Last Point of Supply acts (LPSY) in the new year will clarify if a markdown is about to begin. If the distribution is confirmed I will be looking for laggards in the Industrial sector which is currently the weakest sector to trade (see the previous comparison of sectors in the links below).
