The 6 market phases all traders need to know

Traders can miss important signals if they don’t understand the phases of the markets.

Here’s the 6 phases you need to know, what they mean and how to identify them (by Mish Schneider from MarketGauge):

Bullish Phase

🔸50-day moving average is above the 200-day moving average
🔸market price is above both moving averages
🔸indicates a strong upward trend

Warning Phase

🔸50-day moving average is above the 200-day moving average
🔸market price dips below the 50-day moving average
🔸suggests a potential shift in the market and a need for caution

Distribution Phase

🔸50-day moving average is above the 200-day moving average
🔸market price dips below the 200-day moving average
🔸indicates institutional investors may be selling off their positions

Bearish Phase

🔸50-day moving average is below the 200-day moving average
🔸price remains below both moving averages
🔸suggests a strong downward trend

Recovery Phase

🔸50-day moving average is below the 200-day moving average
🔸the market price rises above the 50-day moving average
🔸indicates the price is starting to recover after a bearish phase

Accumulation Phase

🔸50-day moving average is below the 200-day moving average
🔸the market price rises above the 200-day moving average
🔸indicates institutional buyers are entering the market and accumulating positions