Technical Analysis Plain and Simple: Charting the Markets in Your Language, Second Edition
by Michael N. Kahn
Accumulation and Distribution
The terms “accumulation” and “distribution” originally came about when discussing the “smart money” and its condescendingly labeled counterpart, the “dumb money,” in the market. The smart money investors were supposedly the bigger and better capitalized group with the latest tools and data. With all of this at their disposal, they were supposedly the group in the know and the one to watch for clues on market direction.
History will show that institutions are not necessarily the smart money, but the concept is the same. Those with the best knowledge often buy in advance of price trends higher and sell in advance of price trends lower. The former is called accumulation because they are accumulating shares of stock ...
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