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10 HOW TO MAKE MONEY IN STOCKS SUCCESS STORIES
What Ends an Uptrend and Puts the Market into a Correction
A distribution day is a heavy day of selling on one of the major indexes. This
heavy selling causes one of the indexes to close 0.2% lower on volume
higher than that of the previous day. The CAN SLIM System focuses mainly
on the S&P and the Nasdaq when counting distribution days.
IBD studies have shown that 5 or 6 days of distribution over a 4- to 5-week
period are enough to turn a previously advancing market into decline, espe-
cially if distribution days start piling up quickly over a short period.
The increase in heavy selling is a signal to the individual investor that pro-
fessionals are heading for the exits.
Since three out of four stocks follow the general market trend, it’s best
not to try and swim against the tide if the market is in a downtrend.
