All language subtitles for Session 03-WTC (January 21, 2019)

Hello, everyone. Today is January 21st,
and this is our third session of the

Wyckoff Trading Course.

Thank you for all of your emails and for
all of the comments that I've received

about the first two classes. You could
see some of the comments from students

the left side of the slide.

I'm really excited that I hear a lot of
excitement from you guys.

obviously always energizes me, you know,
to go on and to think that this is

going to be a great cycle. And I see how
you guys are communicating with me. It

took me a few hours to go through the
homework. So I've actually was

able, you know, today and usually Monday
is my preparation day for the course

since the morning.

you know, to go through all of the
emails, and there were quite a few. So

you for sending those.

Thank you for all of the kind words, by
the way, that you sent me, you know,

about the course and, you know, the
knowledge that we present in this

I really appreciate that.

I also was somewhat impressed because
the first homework

where people sent me their labeling,

It kind of gives me an understanding of
what the cycle is going to be and how

people are going to be in this course
and so on and so forth. So I was really

impressed with the level of
understanding of the material. That's

Secondly, how you guys are picking up
the new knowledge and applying this.

Having said this, there are obviously
tons of adjustments that we will do,

we will need to do.

Not a finished product yet by any means,
so there is a lot of work in front of

us. But still, such a great start.

And today, specifically with the
homework, I want to point your attention

identification of phase boundaries.

almost in each of the homeworks, we had
something to adjust around the

boundaries of the phases.

And obviously, you know, there's
something that I need to give you. So we

will...

We will definitely go through some of
the theoretical material where I will

you how to identify phase C, how to
identify the boundaries, you know,

different phases and so on and so forth.
And then, you know, we'll go through

all the stuff today as well.

Next session is January 28th. We are
going to continue with the...

price structure.

So these homeworks are fundamental tools
for us to start learning about

phase analysis. So that's going to be
our focus.

And we will continue with that on
January 28th.

All right. As usual, all of our classes
are for educational purposes only. Stop

your video. Read the disclaimer.

And then today, actually, let me do one
thing, guys, before I'm realizing that

I'm actually slightly unprepared. Do you
guys see my screen right now?

Okay, yeah, you should not be seeing my
screen right now.

Okay.

Okay, great.

Hold on a second.

Okay, awesome.

Okay, great.

And now we should be back.

All right, yes. So we are on the
question from Lee.

Okay, awesome.

Thank you, guys. It's just like one
minor technical detail that I had to

care of.

This is a question from the student in
this class.

Why am I posting this slide here? And
why are we discussing this question? I

usually email you guys the instructions
about the questions as such.

If you send me a question that requires
a lot of explanation, most likely I will

not be able to answer it over the email.

But I really, really would like to
answer this email in the classroom

environment. And there is a specific
reason of why I want to do this. If I am

spending time answering your email
question, and let's say I spent maybe

minutes on that, you know, let's just
suppose that this is a big question,

what I'm not doing is I'm not explaining
the same concepts to other people in

the classroom.

So what is the best to do is to have the
question.

that is in line with the content that we
are covering right now.

So Lee is sending the question that is
very close.

It's a little bit on the borderline here
because we're going to discuss some

supply and demand, but I think it's a
really good preview for our second month

when we will be diving in into the
supply and demand concepts.

Plus, Lee is taking the chart from our
class. This is the chart

of Yahoo.

Questions like this, sometimes I will
subjectively put into the content of the

class. We also will have one session.
The last session will all be devoted to

&A. And I know that you have so many
questions about the homework right now.

will go through those as well. And
usually homework questions, those

need to be addressed during the next
class, you know,

with the homework review.

So we've talked about Yahoo, and we were
talking about Yahoo in the context of

a change of character. This was the
first place where in the trend we saw

the change of character has happened. A
much larger reaction to the downside.

There is not a lot of supply that's
coming in. It's kind of flat, I would

say. But the result to the downside

has increased.

even though supply has not increased.

So what can we conclude?

Well, we're still thinking that this
could lead to a change of character and

therefore a trading range. And then we
need to understand what kind of bias

we're going to have in that trading
range.

As I mentioned to you in the previous
class, and this is the way how I

my communication, you know, and kind of
like my integrity with you guys.

Even here at these two spots, I'm
thinking that the bias is still to the

I'm not sure if anybody could persuade
me otherwise at this point of time. I

just don't see any increase in the
volume signature, maybe slightly more

but the result is even less than the
first change of character.

Less supply on the next reaction, only
really one day of selling and then just,

you know.

inactivity by sellers and more
deterioration on of the volume and the

we still would be thinking that the bias
is up here and our position is going to

be here i mentioned that probably we
would be closing somewhere here on this

and this is how we come back into this
trading range so and then the question

the question is about two spots or two
bars or rather you know two places

one and number two So we already see how
the price has deteriorated below two

levels of the support that were so
important.

One of them was in the middle of the
range and was still, please note, the

was still to the upside.

So now at the failure of this, we have a
couple of failures actually.

So the first one comes as an upthrust
and there is the first failure. The

comes back into the range.

So at this spot, we're always thinking,
A sign of strength rally or an upthrust

situation? And we'll talk about this
more.

As the price comes back into the trading
range, that becomes a failure, and

therefore we start talking about the
upthrust.

An upthrust could be a function, could
be a part of the reaccumulation, that's

true, but also an upthrust.

could be a part of the distribution.

So the next thing that we do after the
failure is we want to see where the

will go, what kind of price
deterioration we will have, and what

character behind this deterioration
we're going to see.

So we're seeing that the price is
committing below local support,

and by itself, it's a weakness.

at least a short -term weakness for now.

And then we see the increase in the
effort behind the increase in the

So that suggests to us that there is
some kind of short -term bearish bias

we should be aware of at this point.

The rally, which is going to be an LPSY
rally here in the middle of the range,

is very weak. It doesn't even come to
one half of the move to the downside

that we've seen.

since the upthrust.

So again, more weakness and then a
continuation of that weakness and a

commitment even below the previous
support line.

So we are in a sign of weakness type of
environment.

Supply is increasing.

And as we go into those two spots,
number one and number two, we are

the new trading range that already has
some bias that we perceive at this point

as the downside bias.

Why is that?

Well, we've seen a change of character.

This is the largest reaction to the
downside than what we've seen before.

And now we are trying to confirm that
change of character. How are we

that? Well, we need to have a rally,
LPSY rally, last point of supply rally.

that will fail at some point. At which
point would it fail?

Well, we want for the distribution, this
rally to be so weak that it cannot

overcome one half of the trading range
or the height of the trading range.

And we kind of see it here, right? So
the price goes up with the enthusiasm to

the upside and comes to this value zone
right here.

What do we have here?

Acceptance of this level or rejection of
this level? Supply coming in at the

highs of this resistance or supply is
coming in and being observed or supply

not coming in? Well, we definitely see
that there are some spots, for instance,

like right here, where, first of all,
after the short -term break of a trend,

we see that supply is actually
increasing.

And this, I wonder if, Lee, you have
seen this

spread and this increase in the spread
as well. Because it's all related

to the other two that you've mentioned.
Actually, another one right here.

So let's kind of observe what is
happening at this spot.

The first one.

The second one.

Third one.

And then the fourth one.

Actually, we could even do this. We
could even look at this and this.

So one of the things that we notice
right away is

we want to notice the areas where supply
has

come and supply has increased and it's
started producing either

a stopping action, some kind of reversal
action,

and then synchronicity with

the increasing result to the downside.

And that's kind of like a sequence of
how supply is going to come in.

Supply is not necessarily right away
it's going to reverse the whole blast.

It's just impossible because

With the uptrend that we have had, there
is a specific sentiment that exists

in market participants' minds at this
point of time as to what should happen.

We should be in the uptrend. We see this
from the sentiment we could derive from

how the price moves and from the volume
signature.

Everybody is on board.

Nobody is getting out of this position.

the first time when we could see a more
meaningful getting out of this position

is going to be in this area right here.
And this is why, until then, we're still

thinking that we might be in the
reaccumulation because the texture for

price and the volume is such that it
dictates that the price most likely is

going to continue to the upside.

Now, as it continues to the upside, this
is the...

where for the first time we're
experiencing some increase of the

And for the first time, it's not only
stopping the price from moving further

but it actually synchronized with the
result to the downside.

So this is the first area of significant
institutional selling that we

see. Now, as we go through the sign of
weakness, then we see how supply also

comes

at the lower level.

So we are kind of now in a different
value zone.

And this value zone, because we're
looking at the distribution, is going to

described as the value zone for weak
hands.

This is just a definition of the work of
trading course that I created, you

know, for you guys and for myself.

That's how we would define the value
zone.

So what is happening here? I'm coming
back to this question by Lee.

I would like to understand what was
actually happening at points number one

two.

To understand what's happening at these
two points, we need to understand what

happened prior, and we're kind of going
to this. So the value zone for weak

hands, what does it mean?

It means that at this spot right here
and at this spot right here,

Weak hands are buyers.

And if they are buyers, what do they
see?

The weak hands are seeing some kind of
value.

So that's a very interesting thought.
How could they see value at this point

time?

The trend has been broken.

The stock went into the consolidation.

The stock is at the support level.

Wouldn't they feel more fear?

to come in and to establish this
position.

It's a very interesting observation
about the weak hands because

the weak hands are going to be getting
in into the trend either very, very late

and they will be profitable.

So weak hands getting in and they will
be profitable at this

point of time.

And then this is going to be the first
group of weak hands.

The second group of weak hands is going
to be someone who maybe sold their

stock and did not participate.

That's number one.

Secondly, maybe sold their stock, did
not participate, but then got out.

And then as the price goes into the
consolidation and especially goes back

produces some kind of

you know, move to the downside within
the confines of the structure.

So this is the structure that we would
be looking at at the time.

The weak hands are going to see some
value and they're going to say, this was

leadership stock and I didn't really
participate. I didn't, you know,

participate in this whole trend. But now
that we are at the support, this is

where I'm going to come in and I'm going
to buy.

And that's how they see that value at
this spot.

They're coming in and they're buying,
and because they don't have a lot of

strength behind it, the rally that is
being produced is not that great.

And what else is happening, even more
importantly, is that into the strength

weekends at this point, when they see
that value, institutions are going to

into that strength.

And we are seeing this later on.

in the selling where supply is
increasing on increased volume signature

increased down spread look at the spread
right here this is the largest spread

on all in this whole rally it just tells
us that the rally is done and once the

rally is done you instantly know that
this is the high of the rally and then

start making your assessment and
deductions as to what kind of

was it in the relationship to the whole
formation, to the height of this

formation? And you see that it's only
one half of the range that this really

traveled, and then it met so much
supply, so much selling.

Okay, well, then we go back into the
same area. Again, we can't, thinking

this is the new attempt to go up, that
is going to result in the overcoming of

the long -term resistance.

And what do we see as we come to the
same resistance point? We're seeing how

supply is still increasing locally.

And not only that, the downward result
is increasing as well. So that becomes a

reversal again. And you start
questioning, we've done this two times

And every time that we've come to this
level, what happens?

Some institutions are selling at the
resistance point. So what is their bias?

Their bias is to the downside if they're
selling, right? We see that from the

increased volume signature only, you
know, usually big institutions will

this type of signature.

So therefore, we are thinking about
confirmation of this bias.

And as we go down on the next reaction,
we're seeing a sign

of weakness.

The price commits below.

Yes, it comes back. So there is a spring
type of action.

But we know that what's selling here is
selling here an ability to overcome one

half of the height of the range and then
a sign of weakness.

So this could be just temporary.

And we could be just somewhere still in
phase B at this point of

this whole range.

So what do we see next? We see the next
attempt, and this is where we're coming

in into one and two, those two points.

And let's see what happens. This is the
highest volume signature on this bar,

and this is probably just some kind of
event.

And there is a lot of optimism on this
bar.

Again, we could see this from the volume
signature, and we could see this from

the price signature. This is most
likely.

and this is the weekly chart, this is
most likely some kind of earnings and so

forth. And the biggest question that
actually Lee is asking here, somewhere

the description, he's saying that so
much movement to the upside, so much

effort, yet what do we do?

What is the final result?

And to understand the final result, we
need to understand the original intent

intention behind this move.

If there is so much enthusiasm behind
it, the intention was to overcome the

previous points of resistance that we
were not able to overcome.

And then what do we do with all of this
enthusiasm that is even more than what

we've seen before?

we can't even go to the same level.

So what looks that this something, this

move to the upside with so much strength
and optimism, looking so bullish at

this point is actually showing us an
ability to repeat the same bullish

that we've seen before on the previous
rallies.

Is this bullish or bearish?

Why didn't it reach resistance?

Maybe this is the correct question to
ask.

Why didn't it reach resistance? What do
you guys think?

Well, my thought here is that it didn't
reach resistance because someone was

selling into the strength.

And if you think about the tactics of
the seal here at this spot, at the point

of the resistance,

they are selling into the strength of
weak hands twice already.

And now they are selling for the third
time at the lower level.

So this means automatically that the
bias is still being confirmed as the

downward bias.

and that now the value zone is slightly
lower than what we've seen before.

So when point number two comes, which
seems like a very logical diminishing

volume signature, so we might be
thinking that, okay, supply is

here, which is correct as well.

But what's not happening is that we're
not going anywhere with all of this

increase of what seems to kind of like
an amateur eye, a bullish scenario.

there is still an attempt to go up, and
yet we can't reach even the previous

level. So again, we are just confirming
the bias to the downside at this point

of time, and we are interpreting the
increase of the volume signature as

an increase of the supply over

average supply.

And then we see that supply is
diminishing over point number one.

And that tells us a different story.

It takes less of the supply to produce
more bearish results.

And by more bearish results, I mean
inability of the price to actually

you know, even the same, to touch the
same resistance or create a higher high.

So it's a more bearish result.

on less supply.

What does it tell us?

It tells us that we don't need so much
supply anymore to push the price down.

And at this point of time, demand is so
exhausted that all of the next rallies

are not going to be that big.

And we see it with the next rally, with
the next rally. And we're seeing how

supply is diminishing even more and yet
result to the downside is increasing

even more.

So this tells us that there is a poor
demand and diminishing supply

signature on the background where the
price

is moving to the downside.

And that...

is ease of movement.

On diminishing supply signature, we are
able to move the price down.

Ease of movement.

And that gives us a timing to initiate
the position.

Why? Well, because again, demand is so
poor, we know that demand is not a

anymore.

And even though supply goes down, the
price still goes down. So we're just

to capitulate at some point. And we're
usually going to capitulate around the

point of support. So here's that final
institutional capitulation.

It doesn't have a lot of supply
signature behind it. So that just tells

most likely we're going to stop soon.

We're not going to continue for a long
time to the downside.

All right. Well, hopefully this is...

a good explanation for you and for
everyone.

So really good question. This is not
necessarily the question that I was

expecting at this point, but I'm really
encouraged by the, you know, the

questions that are coming and, you know,
I'm really happy that we're starting

with this. By the way, guys, today's
class is going to go until six. We have

lot of material, so I'm kind of already,
for the next probably five sessions,

we're going to, go up to 6 o 'clock,
unless I have some kind of appointment

arrangements after this.

Lots of material, so we're going to
cover a lot today.

Questions.

What about effort in the result if we
see accumulation at the right side from

2002, May to September of 2003? Only one
year are accumulating.

2003 to 2005, an uptrend, not a powerful
effort in an accumulation.

Okay.

Okay, so let me just begin to understand
this question.

So what's the question, Eric?

Okay, so this, 2005, and this.

Yeah, I'm not sure if I understand the
question, Eric. Let's just kind of

rephrase it. Let's just think about
this.

Okay, meanwhile, small time accumulated.
You mean

this area right here as a cause?

Or this as a cause?

Okay. So, well...

We could definitely apply something
like, you know, PNF, try to see what

of, you know, objective we're going to
see here. We could see if this could

match this objective as well.

At this point of time, you know, we're
not talking about the PNF. I'm going to

give you some references, but, you know,
for those of you who are not familiar,

you know, with PNF, please go to our
website.

A couple of things that you could do on
the YouTube channel.

The YouTube channel has two videos right
now by Bruce on PNF.

Those are basic videos.

So go there. And then after that, go to
our website, WyckoffAnalytics .com.

And there are on -demand products.

You could find part one and part two.

of the two courses that we conducted
together with Bruce on the PNF. So I

recommend just that path.

Okay, great.

Let's move on and let's just go through
the material for today.

So today, what are we going to discuss
today?

This is going to be the major work for
us today to go through the Home Depot

homework review.

There will be a lot of questions that I
will answer.

This is the first, well, not the first
time, but this is the time where I'm

expecting a lot of volunteers.

We are going to put on the chart and
we're just going to go through your

and then we're going to start adjusting
that logic as to how are we viewing the

chart, how are we identifying specific
events, how are we thinking about

labeling, and then how do we think about
the tactics and where would we be

thinking about opening the position and
so on and so forth. So this might take

even two sessions, but we will do this.
As we go through the review, I'm going

to... After each of the slides, each of
the exercises, we're going to have some

kind of theoretical material.

And the main thing that I want you guys
to think about, and this is what I see

in your homework, is the phase
boundaries. That's number one.

Secondly, phase C identification.

And then everything else, we'll
definitely cover everything else.

If we have time, we will talk about the
distribution. If we don't have time, I'm

going to give you that.

homework on the distribution.

I'm going to give you the slides on the
distribution.

Your homework will be to read those
slides through, to understand all of the

work of events in the distribution, to
know the characteristics of those

and then apply them to the homework. And
then we're going to do the review, the

same review as we've done with Home
Depot, most likely maybe not in session

number four, but maybe session number
five.

So that's going to be the plan for
today.

All right. With that, let's start our
homework. And I need a volunteer. So say

yes, and I'm going to unmute you.

And let's see how that's going to go.
Okay.

Let's go to Rami.

Rami. Am I pronouncing your name
correctly?

Rama is fine.

Rama. Okay, Rama. Almost like Roma.

My name is Roma, actually.

Right. My short name, so Rama. That's
very close. Okay, great.

All right, so let's look. We have three
trading ranges. By the way, guys, if you

haven't noticed, some of you have not
noticed, there is another one that I

of wanted you to identify.

And by the way, Rama, before we start
doing this, let me guys show you really

quickly something that could be helpful
to

everyone. So I thought that this idea of
having

homework slides as a separate file, that
was a suggestion by one of you. I

really appreciate this because I think
it saved a lot of time for a lot of you.

And I know how difficult it is to do the
first homework, especially if you

haven't worked with PowerPoint,

with PDFs and so forth. But I was really
pleased to see that everybody

is just kind of like getting a handle on
that.

So I want to show you a little bit of
what I do.

with power charging and it will be
really quick so when you receive a slide

me like this in in powerpoint why am i
saying power charging in powerpoint um

you have multiple options here for
instance um under the first so you're

to be a home tab and then look at all of
these small icons right here so for

instance i could click this icon right
here and i could create any type of text

that i want i could move this text and
put it you know, anywhere I want.

So for instance, something like this.
I'm looking at the up thrust and I'm

saying, this is an up thrust.

You can copy that. You could create the
new one. You could change the color of

it. Whatever you guys want to do. Then
you have, you know, any type of lines

that you want to create.

You can copy them, paste them.

Here is your trend.

What else? Phases.

So I like to do this for phases.

just to identify where phase is, and
then, you know, change

maybe like the weight, and maybe even
change the way how it looks, and just

okay, here is maybe like phase A,
somewhere here, right? And then just

down here, and I could change the size
of it, and so on and so forth.

So there are quite a few useful things
that you could do here with the

PowerPoint. And it's actually quite easy
once you get a handle on all of those

things. So let's just practice. Let's
just kind of like go with this, you

with next homework.

And hopefully it will be easier for you
guys to use it. All right. Having said

this, Rama, let's come back to you.

And let's look at trading range number
one.

So it's this one right here.

So one of the earliest questions in
labeling that I ask students

is, I want them to understand that when
you look at the historical chart,

you know already what the

bias of the trading range is.

And at this point in the course, this is
exactly what I want you to do. I want

your minds not to think about the bias
first.

I want you to understand that we have
been in the accumulation and that you

to label accumulation correctly.

This is the first task.

As we progress to month number two,
that's when I'm going to start

closing off the chart.

and then moving to the right and
unfolding the chart as swings or

bars occur. And then you will have to
analyze the bias and the timing and so

and so forth. But for now, this is what
we do. We know that this is an

accumulation.

So in accumulation, the biggest question
that I have on labeling, what catches

your eye, Rama, that is so distinctive?

distinctively different than anything
else that you could identify right away?

The arrest of the descent of the price
downwards, the arrest of the downward

movement of the price.

Okay, so what about it?

And the price failing to go below that
particular level

and then rising.

from that level onwards, defining the
level of support.

Okay. Well, let's take that thought and
let's just kind of develop this. So we

were in the downtrend and then we
stopped that downtrend at this spot

here. And then after that, we went into
the non -consolidating environment.

We've talked about this in the last
session. So what is this stop in action?

How would we call it?

How would Wicca call this event?

Selling climax.

Okay, selling climax, SC.

Are there characteristics of the selling
climax that we could identify here to

confirm that indeed this was a selling
climax?

The range of the price bars, in other
words, the spread is wide,

and there are multiple such bars.

which essentially indicates to me that
the momentum to the downside

and... Does it look panicky? Does it
look

like somebody wants to get rid of their
thoughts right away?

Absolutely, yeah.

So there is some kind of climactic run
that we are observing.

Okay, great.

We know... that you know from in
hindsight that the price has stopped

is the first spot so usually it's going
to be associated with that climactic

action with the selling climax okay if
this is a selling climax then the next

rally is going to be what automatic
rally and then the next low

is going to be what would be a secondary
test and that would conclude which

phase phase a and the

Intention behind phase A is what?

The intention is to stop the downward
movement and then the beginning of

potential trading range.

Excellent. How else would we be
interpreting or calling this automatic

and the subsequent secondary test that
is a successful secondary test?

The secondary test and the automatic
rally would have

volume signatures that would suggest
that it's more likely

to be an evolving trading range.

But also, yes, absolutely.

And here again, we are going from a
downtrend environment into a trading

range environment.

Something should happen right here.

some kind of change.

How are we calling that?

That would be the price failing to
continue to go upwards.

In other words, the automatic rally
being limited by a price level, which

defines the resistance.

Okay, so that's great. That's also
another great point. So automatic rally

define an area of the resistance.

I'm sorry, the level of the resistance.
And then selling climax will define the

level of the support.

And we would be thinking that the price
should consolidate around the mean in

this area and be contained.

Majority of the price should be
contained within these two levels.

And it is.

So that's great.

The question that I'm also asking is
that switch between the downtrend to

a consolidating environment.

When we look at the rally, even the
automatic rally itself, and we could see

even going into the upthrust right here
in potential phase B,

is this the largest rally that we've
seen so far?

No, on the way down, this is the third
such rally that we have seen so far.

I'm not sure about that. So this is the
high of this move to the downside,

right? So we have rally number one. We
have rally number two.

There are quite a few here, so all of
those two. And then look at this rally

right here.

Is this the largest rally out of all of
the rallies that I've identified here?

Right. I would agree.

So the rally has increased.

The distance of the rally has increased.

And that produced some kind of change.

That's a change of character, yeah.

Yeah, yeah. So this is where I'm kind of
like trying to go with you here. So a

change of character.

Now we need to confirm it. How do we
confirm it? Well, we look at the

run.

And we are comparing it to the next
rally that comes after the change of

character rally.

The next decline that takes place. Yeah,
the next decline. And then we see that,

again, the distance is diminishing.

We're seeing how the spread might be
diminishing as well.

We're having a higher low right here in
this area. So that confirms that change

of character.

And the change of character is going to
be all about...

Well, something different happens here
in comparison to this or this.

Every time we either have a very weak
rally and then a break to the downside.

Weak rally and then a break to the
downside.

Here we have a much better rally.

So something is different.

And then we don't have the next break to
the downside.

Or even in some instances, we might have
a small break, and then the price will

come back into the trading range.

So this is a change of character. This
is where everything changes for the

downtrend, and we might expect a trading
range. And it's always going to be

associated on the way in with phase A.

Excellent.

Okay, so now that we know where phase A
is, and by the way, So another, you

know, for those of you who are more
advanced, you might have a question

and I'm actually very surprised that
nobody's asking it right now.

Automatic rally and automatic rally.

Could it be that we could have, you
know, this type of labeling?

And I'd say that I would be totally okay
with this, right? So because we

have more of this rally and this
secondary test.

that is more of the function of the
selling climax itself, and then just the

continuation of this rally to the
upside.

I could label this as an upthrust action
right here in phase B, but you could

also label this as a much larger
automatic rally, and then your secondary

is going to be somewhere here in this
area, and this could be your phase A.

Now, the biggest question here is, well,
What does it mean? I mean, like, it

looks like so discretionary.

But the biggest question here is not
actually about the labeling.

My biggest question to you, all of you
guys at this point is, does it really

matter to your trading how you label
phase A?

No. Why?

Because we are just looking at the...

pattern as it is evolving. The patterns,
the nature and the pattern of the

rallies and the declines.

Where were you betrayed in Rama?

I would be trading at the phase C or D
as

the price gets out of the trading range
and the new trend emerges.

That's where I would be trading. So
somewhere here in this area, maybe even

more, maybe like somewhere here in this
whole area. Why? Because it's always

going to be to the right of the trading
range where we're going to originate our

trade. So does it really matter how we
label phase A?

No. I see a lot of this kind of like
this mental, you know, resistance.

I have to label everything correctly.

You have to trade everything correctly.
You don't have to label everything

correctly. I'm going to go even further
with this statement.

You have to trade correctly. You don't
have to analyze everything correctly.

that is counterintuitive.

Because we always think that by making a
good analysis, that will lead to a good

trade. Not necessarily. Sometimes my bad
analysis leads me to a much better

trade than the trade that I've analyzed
a lot.

Why is this happening?

Well, because markets are unpredictable,
and the only thing that you could

really control is just your actions.

So if I see some kind of mistake,
analytical mistake that I've made, and

market shows to me right away that you
are wrong in your analysis, I could

mentally make a switch and say, I was
wrong.

If I was wrong, what is the correct
interpretation?

Well, it's different. Could I take a
trade on that?

yes, I'm still in that zone where I
could take a trade on that. So

you know, you could use it like this,
you know, like this mental path.

Okay, so let's assume that we're going
to go with the original phase A,

selling climax, automatic rally,
secondary test.

Then I already mentioned upthrust action
in phase B.

So Rama, let me ask you this question.

What is the next point in this trading
range that attracts your attention that

you could identify right away and you
can say, I know what this is?

The most obvious thing.

The most obvious thing is a deeper
secondary test that occurs

in November.

which is essentially very close to the
support level and the behavior of the

price when it reaches that level.

Okay, so what is it? How would we label
it?

I would label that as SD.

Okay, great. And there are, by the way,
multiple secondary tests.

This is also, guys, another thing that I
want you to start thinking about.

And today I'm going to give you so much
material.

For those of you who emailed me and you
guys said, I watched the video and it

was like an eye -opening watching it for
the second or third time. And some of

you watched multiple times.

And I do believe it because going
through this, even through this chart, I

already gave you probably like a dozen
of concepts that you could make a note

of. So for those of you who have time,
watch the recording again.

Make the notes. Send those notes to me.
You're going to receive so much value

out of that exercise.

Okay, so what am I talking about here?

We have to understand the texture of the
LUT formation, how it forms.

We could see that the selling climax is
always going to be associated with the

secondary test, the retest of that.

And then in phase B, Rama has mentioned,
you know, this secondary test.

That goes to the support level.

But there are quite a lot of those tests
around this area. There are one, two,

three, four, five. Five tests, maybe
even six tests.

And you kind of could see from the
texture of the price that it's all

It's not just separate tests.

It's the testing that takes some time
and produces.

a trading range so when we look into
this we usually would be thinking that

should belong to one phase and some
instances we would break this but in

case it seems like it should be one uh
one test and then one phase so what

would it be all the secondary tests here
phase b phase b Yes, we still need to

experience phase B, and we know that
phase B is going to be the largest among

three phases, A, B, and C.

Okay, so if this is phase B, then what
is the next most obvious thing that you

see in this trading range that you could
identify and tell us, I know what this

is?

There are two points I can identify. One
is the...

that happens soon after the testing or
the support level, and the other one is

the low of the Phase C.

Okay. Those are the two things that
stand out.

Okay. So let's deal with Phase C first.
So why is this Phase C?

The price action and the price, again,

Unlike the other test in phase B, the
price gets much closer

and the spread of the bar narrows. And
the

rally that follows that.

for the first time, traverses through
the trading range, commits itself above

the resistance level, and then stays
above that resistance level. Well,

has been doing a lot of homework and
watching a lot of videos, so Rama, good

job. So Rama is giving us a lot of
thoughts on how we could identify phase

I'm going to show you this slide and,
you know, in a couple of other slides

we have to cover first on how could we
identify phase C. This is going to be

of the major kind of shortcuts that I'm
going to give you guys. So phase C is

going to be associated with the number
three or

last test at the level of the support.

So where is the first test?

Well, naturally, after the climactic
action in phase A, that's number one,

that's at the support level, even though
it comes so high, but it's still

testing the local stopping action by
selling climax.

Test number two, naturally, will happen
in phase B.

And this test number two is just too
complex because there is a selling

There's a whole formation with the
selling climax, automatic rally,

test, phase A, phase B, phase B, even
the phase B upthrust,

phase C.

So it has its own trading range. So it's
just a complex trading range and a

complex process of testing that we are
observing here.

But this is a test number two.

And then phase C always will be a test
number three.

at the level of the support.

That's very important because test
number four is gonna be at the level of

resistance that was created by phases A
and B. We will come back to

this later on.

We also know that phase C is gonna be
the lowest low

in the uptrend.

And because we look at the chart where
we know what has happened before, where

did uptrend have started?

One might argue that, well, we had the
start maybe like somewhere here in

December of 85, and then we have a
higher high and a higher low.

One might argue, well, maybe even a low
prior to that, November.

But for us, what's important is to
understand is that there is still a

range that unfolds. It's a non -trending
environment.

So therefore, there is no really a trend
until it hits the low of phase C, and

only then we would be seeing some kind
of uptrend. Now, we'll have some other

different definitions on this subject
where we might have even the low in

A, and that would establish the whole
trend. But we still would be going

some kind of consolidating.

accumulative actions prior to that.

So the lowest low, when you look at the
historical chart, could define phase C

for you really easily.

That's where the trend starts.

We also will talk about a second point
of fear in phase C. So that second point

of fear is going to be associated with
the increase in the volume signature

where weak hands are going to
capitulate.

And that's going to produce that lower
low.

Or we could have, you know, like in this
instance, a very big distance to the

downside, right? So reaction might
increase.

And that could produce, you know,
increased selling behaviors by

weak hands, and they will be trying to
get out, and there might be some

acceleration around the support here.

What else?

said that there are some characteristics
for phase C that we need to understand.

We definitely know that the reaction
should have some kind of bullish sign.

And Rama has mentioned those. The
downward spread is diminishing relative

what we've seen, let's say, in phase B
or on the climactic run in phase A.

We could also see that maybe with this
diminishing downspread action, the

is also diminishing. That could be a
possibility as well. And kind of a

laborious move to the downside instead
of very quick sign of strength type

of move to the downside. So that's the
big difference.

Okay, so let's come back to our
labeling.

Phase A, phase C.

So everything in between is phase B.

And we see two instances where the price
overcomes the previous high in a very

insignificant way. In the first time, it
tries to commit to the upside.

Actually, the first time was here in
phase B, so off -thrust action in phase

Then the second time, it's just an
attempt to commit, and then the return.

And then the third time, there is a
commitment, and then a return back.

So all of those instances are going to
be up thrust.

There is only one extra definition here
that I want you to know.

This rally right here, that looks like a
rally in phase D.

And some of you who are more advanced,
are probably just thinking, okay, well,

why is he not talking about this? Why is
this not a sign of strength rally?

Why is it not identified as phase D?

Well, look at the next reaction that
comes after that.

It actually negates almost all of the
gains that we've seen on this rally.

And we've just identified phase C low as
the low of this reaction.

So, therefore, whatever we're observing,
all of this moves to the upside are

most likely a part of phase B.

Now, in phase B, we could have up
thrust, and some of them are going to be

significant.

The ones that are showing us some
bullish activity and that are going to

like a phase D sign of strength could be
labeled as

upthrust action as a minor sign of

strength. Whereas the major sign of
strength is still going to come in phase

right? So we could have a major sign of
strength as like this rally.

and then a backing up action into the
lows of the support that acted before as

the resistance. So this could act as a
backing up action.

So this big rally is going to be a major
sign of strength.

And then this smaller rally in phase B
is going to be an upthrust action as a

minor sign of strength.

And that's that distinction that I want
you guys to give.

All right, let me quickly just see what
other questions we have.

Isn't phase A important for closing of a
position from Philip? Yeah, absolutely.

Here at this point, we're going to be
facing a lot of trading decisions that

we're keeping the position if we are
correct.

on our buys and if we are in this trade.

Also, some other decisions, not for
those of you who are in this position at

this point of time.

Let's say somebody is looking at the
stock and identifying maybe some kind of

interest in the stock. So in phase A,
what kind of trading decision are we

to have at this point? Most likely not,
but that's a decision on its own.

Not to participate is a decision.

not to be involved, not to get your risk
exposure at this point of time is a

trading decision.

Doing nothing, sitting on your hands is
a trading decision.

So yeah, so those type of decisions are
going to be important in phase A.

Is there a sign of strength rally after
December secondary test? So we've just

covered this.

Yes, it's a sign of strength rally, but
it's a minus sign of strength rally.

in phase B and not in phase D?

Where would you place the trade in phase
C?

Okay, good question. That comes from
Justin.

So we're looking at how the price moves
to the downside and we're looking for

any points of the reversal, right? So
move to the downside, no reversal.

Move to the downside, no reversal.

Move to the downside, no reversal.

move to the downside, oops, reversal,
which would equal

our point of entry, and that would be
our first point of entry. Our second

of entry could be this bar right here.

Our next point of entry will be
somewhere in this area where we are

a backing -up action.

And our fourth point of entry is
probably going to be somewhere here on

breakout.

This was not the most efficient in this
case entry, but still, with your stop

losses, it shouldn't get you out. So all
four points of entry, you should just

go through.

Okay, what else?

Is it reasonable to take a trade to
upside in early January?

considering reaction looks like a back
-and -up action? Yes.

And if you're thinking that this is a
back -and -up action, let's say, oh, I

see, right here. Okay, got it.

Okay, yeah, this is a good question, but
again, we're coming back into the point

of, you know, how do we actually manage
the position, meaning how do we actually

come in into the position, right?

So we need to see some kind of reversal
of this initial move to the downside.

There is no reversal.

So there is no entry, and that would
save us from entering prematurely and

exposing ourselves, you know, to the
remainder of this reaction.

Why is not a backing up action between
February and March?

This one right here, yeah, it's a
backing up action.

Again, it's just minor, right? And then
this is a backing up action, this whole

formation, and it's a major.

So quite a lot of distinctions already,
guys, that I've given you. So you have

to take notes and you have to remember
those. All right, Ramar. Really quickly,

let's talk about the distribution.

So what is the most obvious thing that
you see in this distribution?

In that small area of distribution, the
most obvious thing is the...

Price action that almost resembles
buying climax, the very first bar.

What are the characteristics of this
buying climax that we see?

Widespread rapid rise of the price to a
new high when compared to the previous

high. Climax is wrong.

Right. And then it's immediately
followed by an automatic

reaction.

And then that is followed by a secondary
test, which tests the highs of

previously established highs.

Please note, there are quite a few
secondary tests here. The first one is

to be an attempt to retest the buying
climax. That would conclude phase A.

let's finish with the buying climax.
What else?

Gap. Gap up.

is going to be a part of that, you know,
climactic stopping action. Actually, as

you look through this intermediate
stopping actions, this is a buying

It's just intermediate.

And look how gap is happening here. Look
at the move.

Look at the gaps here.

Also a buying climax.

Also a buying climax. On a very, very
small scale.

But we kind of see that this analog
repeats over and over and over again.

yeah. A lot of climactic action. And
what do you think the volume signature

is?

More likely to be a moderately high
volume.

Okay. Something like this. I wonder why
moderately. I'm just really curious.

That's because the extent to which the
price has moved when compared to

the previous high on the left side
around.

just before June, leads me to suspect
that the

volume might have been only moderately.
If it was climactic volume, I would have

seen the price go a little bit higher.

Interesting. Okay, guys, for those of
you who can, quickly find me the volume

signature and maybe send me the picture
through the chat or something like this.

I'm now really curious.

My first thought would be that because
the next area is the reaccumulation, the

volume signature is going to increase,
but probably more locally.

That's number one.

And we probably would be thinking that
that would give us just an idea that

we're going to go into the trading range
with the bias that is going to be to

the upside.

So therefore, not a lot of supply
signature should be there. On the second

thought. You know, looking at all of
these buying climaxes, you know, to the

upside, we're seeing that there is a big
gap to the upside. So there is some

kind of event here that stops this whole
movement. So this event should have,

you know, an increase in the volume
signature for sure.

Plus the whole day just goes up.

So that should, you know, have some kind
of demand behind it.

especially at the higher levels over the
resistance. So I wonder what the volume

signature is.

Okay, we'll come back to this.

So buying climax, automatic rally,
secondary test, our phase A is defined.

What is the next phase that could be
easily identified right away?

Phase C, again, where the price comes
and

tests the support level.

And followed by... We are discussing a
distribution, right? So with the

distribution, we're going to have this
type of schematic where phase C is going

to be not at the low, but at the high.

Yeah. So where is it?

It's right at the July level.

Yeah.

the price commits temporarily above the
point of the uh level of the resistance

so how would we label this then
obviously say c yeah

and how would what is this white of
event the price commits temporarily

above and then comes back into the
trading range

Up thrust. Up thrust, yeah. Because this
is distribution after, up thrust after

distribution. Everything between phase C
and A is going to be phase B.

In phase B, we're going to say, okay,
there is a little bit small up thrust

in phase B.

There is multiple secondary tasks.

And then as the price goes down, and we
see that the price has some tail right

here, it's very hard to see.

How would we identify this action?
Obviously in phase D now.

So this first at least attempt to commit
to the downside, how would you label

it?

That would be labeled as a last point of
supply.

Okay, so the rally will be a last point
of supply.

But the move to the downside from the
high of the upthrust to the low of this

reaction.

This whole move right here, that would
be what?

Think about phase C low and accumulation
and move to the upside.

The opposite to that, to the downside.

Downside, yeah.

Sign of weakness?

Yeah, sign of weakness, yeah.

Sign of weakness. So it's a little bit
condensed here, but here it is.

Sign of weakness.

LPSY, and then off we go to the
downside.

Okay, great. So distribution has a very
small cause.

So therefore, the downtrend should be
also small.

And we kind of see that. Okay, well,
then next we'll look at the

range again.

Okay, so what is the most obvious thing
that catches your eye, Rama?

The most obvious thing is the price
leveling off.

After the sign of weakness and the last
point of supply, it establishes a price

from which there's a rally that takes
place.

Okay, so we're seeing the low that has
been created, and then we're seeing

a move to the upside. Now, this rally,
is this...

Is this rally much better than the
rallies that we've seen in the down

Yes,

absolutely. So what does this mean to
us? Is this a change of character?

Yeah, change of character.

Change of character. At this point of
time, a change of character would

that from a downtrend, we're going to go
into a non -trending environment and

we're going to look at the trading
range.

Trading range. The trading range here,
again, the questions that we're going to

address was the trading range, bias,
timing, character.

Right. Okay. So, and also, change of
character is going to be associated

always on the way into the trading range
with phase A.

Okay. So, if this is phase A, then what
kind of, you know, phase A Y -class

events do we have? The stop in action is
going to be labeled as fail.

Yeah.

It will be labeled as a local selling
climax.

Yes, and I like that, you know, local
definition.

Okay, great. So selling climax, the
first rally.

That would be automatic reaction.

Reaction, and then the next test that's
going to test the selling climax is

going to be a secondary test.

And that would define phase A for us.

Okay. So then what is the next most
obvious Wyckoff event

that you see here?

A rally that goes above the level of the
resistance

and doesn't commit itself to the price
level above.

and declines into the trading range. So
kind of like this type of action, right?

Like we have this up front and then we
come back into the trading range. And it

happens at the same spot, right? So
right after phase A. So act a little bit

an analog, you know, to what we're
seeing here. So we're seeing up front.

At this point of time, looking at this
rally, you're looking at the character

this rally.

Could we say that maybe this rally acts
even as kind of like a minor sign of

strength here?

Yes, I would say so, yeah. Yeah, look at
the character.

The price moves so quickly to the
upside.

It commits on actually multiple closes
to the upside. Actually, maybe just one

or two.

Spend some time there. And this is
what's interesting. Sometimes upthrust.

Look at this upthrust. Goes up, commits
really quickly, and then... By the end

of the session, it already shows some
supply, and then the next day it comes

back into the trading range.

This one is different.

This one has three days that goes above
the resistance, and then look at the

time that it spends, maybe like two
weeks above that point of resistance.

So what does it tell us? It tells us
that there is some kind of strength

the price action.

Strength in the background.

Yeah, and the strength, guys, you know,
it's not indicative of the timing.

By no means. Think about that, oh my
gosh, the strength in early, let's say,

phase A or early phase B, you know, we
should go in into this position. Now,

this strength just suggests to you that
this is a reaccumulation, but it doesn't

suggest to you the timing.

The phase analysis is going to suggest
to you the timing as to when we should

into this position.

But this trend suggests that the bias
could be to the upside.

So now you're just looking for the
confirmation of this information.

Is it really that the bias is to the
upside because we're just still too

We're in early phase B at this point of
time.

Okay, great.

So what's next?

By the way, if this is a bias to the
upside, we would say that this is an

upthrust action rather than an upthrust.

Okay, well then, what's the next thing
that catches your eye?

Right. The next thing that catches my
eye is the disconfirmation. That is, up

until this time, the strength of the
rally and the commitment of the price to

the level above the resistance for a few
days.

tilts my bias to the upside.

But on that bias, I always look forward
to see if that is going to be confirmed

by the subsequent price action. In this
case, the subsequent price action is

indicative of weakness.

So it comes down, it price declines.

Okay, so we're talking about this.

Right. And then it comes and produces
another secondary test.

Okay. Well, let's kind of grab this idea
here from Rama.

So he's saying that, you know, to come
back into the trading range, which we

would expect, by the way, in Phase B.

We've tested.

This is a secondary test.

It's still in Phase A. And this is the
first test in Phase B. This is the test

at the level of the resistance. And we
should have a test in Phase B.

at the level of the support as well.

Phase B is going to test both resistance
and the support.

And we've seen how Romer has described
that there is some supply

or increase of the supply that we see in
the spread, in the download spread,

that suggests what? That suggests that
if supply is increasing, we need some

kind of retest of that supply.

Usually, the more supply we have, the
more testing we need to be doing.

And the more testing we need to be
doing, that would suggest that we might

some kind of trading range. And we're
already in a trading range here, which

kind of like thinking that it's going to
prolong the trading range.

Okay, well, if we had one test, which
was a

supposedly up -thrust accident test,

at the resistance, then the next test is
going to be at the support.

So how would we label this test in phase
B?

I would still label that as a secondary
test.

Yeah, secondary test. We are not
overcoming the low that was created in

so this is a higher low.

So therefore, the higher low in phase B
would be

labeled as a secondary test at the level
of the support.

And then a lower low in phase B would be
labeled as a secondary test as a sign

of, as a minor sign of weakness.

Okay, so this is a secondary test, but
which one? There are quite a few here.

I'm looking at this, I'm looking at
this, I'm looking at this, I'm looking

this, I'm looking at this.

I would say the second one, the one
marked where the price

reaches the lowest point among that
cluster of tests.

Got it. So Rama is saying that this
point right here is our secondary test.

I would probably have an argument here
with you, Rama, because

look into this area again.

How did we approach it?

We approached the whole formation as
three tests in different phases.

And that's what I want you guys to start
practicing. I want your eyes and your

minds to see this.

There are formations that are together.

And I'm going to highlight this.

Here is a formation where there is an
action and then there is a test.

There is another formation where there
is an action and there is multiple tests

of this action.

And then there is a third formation that
is an action and multiple tests after

that. So I want you to start thinking in
these terms because we will be

defining the texture of the whole
trading range as the

construction of smaller pieces.

that come together, and locally, when we
say locally, then we mean that this

test is local to the selling climax, or
this multiple tests are local to the

climactic action that Rama has
identified here, or maybe this test are

the initial selling climax that we have
here.

Okay, Rama, do you see that?

Yes.

Okay, so maybe something, you know, to
kind of like work with the next

just, you know, identifying those areas,
different textures, but different

tests, but, you know, they all create
the same structure. Okay, so if we're

talking about different, you know,
textures and structures within the logic

structure, then as we've identified
tests here and identified the phases

then I could say that if this is test
number one, Test number one is going to

associated with phase A.

This whole thing is test number two
associated with phase B. Then this is

to be associated with C.

Okay, and that's how simple it is for us
to think

about this.

such complex structures that we see, you
know, in test number two and number

three, but they're all actions around
the same area, right? They are all

the tests of the action that we see
prior, you know, to testing area.

Okay, so if this is the case, then let's
relabel this. Phase A, then phase B

probably goes to what? To this point
right here, right? Yes, yeah, yeah.

And then phase C is going to either be
concluded here or it's going to be

concluded here.

So we have two scenarios here.

Okay, so how would we, let's say, is
there any other labeling that we need

to do here? Where is our phase D?

I would consider the second.

C you have put there as D, more D rather
than C.

And I would consider the first C to be
the real phase C because of the

signs of strength I see. It's making
higher lows.

And that to me is the beginning of the
new uptrend.

Okay.

Yeah, I like that.

At the same time, I would say that there
are probably two ways of how we could

label this.

So let's say phase D labeling at this
point.

Okay, so two ways.

The first one is exactly what Rama is
describing.

We are in phase C here in the smaller
formation.

Then look at how Rally is committing to
the upside over the

what seems to be an apex formation.

And we know that in the apex formation,
the sign of strength is actually not

going to be very good.

It's not going to be extremely distinct.

But what it's going to show out of the
place of uncertainty, where both

buyers and sellers are inactive, they're
just waiting for new information to

arrive, either to act.

on the buyers or maybe to add to the
buyers or maybe to close the buyers that

they have.

So at this point of time, a small sign
of strength suggests that there's a

little bit more buyers and supply is
exhausted at this point, so we could

the price much, much easier.

So a sign of strength in the apex
formation is always going to be that

thing. And then the backing up action,
comes exactly on the second reactionary

leg to the down slope and the
resistance.

So that acts as a backing up action, and
therefore this is phase D.

So this is what we have, apex, and then
a sign of strength that is going to be

just a little bit small.

And then the second label in here, which
is also acceptable, is going to be more

about

a much larger phase D, right? So we
could say that this move to the

upside that overcomes the up thrust
action and the buy -in climax of the

distribution formation.

is a major sign of strength and by
definition the price goes through the

range commits to the upside and look at
the commitment so many closes above so

this is a really good commitment to the
upside spend some time in there and then

reacts exactly to the area of the
support that acted before as the

therefore we could see a major sign of
strength with the major backing up

And then we would identify this as a
minus sign of strength.

So that labeling is also acceptable.

Please note that for trading purposes,
again, it doesn't really matter.

Why? Well, because if you're identifying
this as your potential phase D, then

your position in reaccumulation is going
to be...

most likely the first position is going
to be opened in phase C.

Your second position is going to be, and
third, your second, third, and fourth

position are all going to be here.

So from one to four, all of this is
going to be a very active zone for you

act on.

And then after the major sign of
strength and the major backing up

that's number five that you would be
thinking of opening. So from that

perspective, it doesn't really matter.

you will still be operating in this
space you know you still will be a

here all right rama really good really
good start i definitely feel um a

lot of kind of like um knowledge that is
already there so a lot of um i also

hear a lot of correct semantics that are
associated with this course you know so

You know, so a lot of things. So just
continue. And for you specifically, I

would say nuances, details. That's going
to be extremely important, right?

Okay. So just, you know, absorb all of
this knowledge and just make notes and,

you know, concentrate on those details.

Yeah. All right. Great. Thank you.

Thank you.

I'm sorry, Ram. I muted you. Okay.

All right.

Let's quickly look at that question that
we had, and thank you, Lee, for sending

this chart. That was really quick and
cool, and sometimes I'm going to request

you guys. I don't want to be distracted,
but, you know, you guys could

definitely quickly find what I'm looking
for and email me. So we were looking at

this spread, and we said that most
likely the volume signature is going to

increase here.

Why? Well, look at the gap.

That's number one. So that usually is
some kind of event, probably, well,

definitely overnight event, where
institutions have not produced so much

excitement before.

Like any other gaps that we see on the
way up, they are much smaller, right?

And this is not a gap.

And then this is a huge gap.

And the huge gap is always going to be
associated with more interest from

institutions, and we see a continuation
to the upside.

And actually, I forgot to mention that,
you know, this change of character bar

most likely is going to have also a very
high volume signature just because of

the function of the supply that came on
the buying plan itself.

So that was a really good call. And then
also...

This is going to be one of the exercises
that I'm going to give you guys in the

practical when you're going to graduate
to a more advanced level.

One of the things that we practice in
the practical course is reading

the volume signature of the price and
reading price signature of the volume.

What it does, it kind of opens up the
new dimension of understanding.

as to what do we expect the volume on
the price to be on the specific bar,

whether it's the price or the volume
bar.

And that's exactly what I did here, just
kind of like deducing as to what kind

of volume signature could be at this
contextual place with this particular

All right, great.

Let's look at some questions really
quick.

What is the difference between labeling
secondary test after the selling climax

or labeling a shakeout, reaccumulation
versus shakeout schematic?

Okay, yeah.

So this was the question here.

Selling climax, automatic rally.

Could we possibly label this as a
shakeout?

Yeah, we can.

Usually the shakeout in the
reaccumulation is something where we

climax.

and then we have some kind of shakeout
right away we don't have it here we

have a buying climax and then we have an
area of the distribution and that

usually suggests the distribution
usually suggests what there's going to

kind of downtrend that's going to come
and downtrend is going to be

concluded with the stopping action,
which is going to be labeled by us as

selling climax.

So my preference in this particular case
would be just to label this as a

selling climax and extend the
boundaries, you know, from the selling

from the automatic reaction.

or automatic rally, rather, and then in
the reaccumulation structures where we

have a very quick move to the downside
without a lot of the distributional

activity, you know, you could say, like,
okay, this could be interpreted as a

shakeout action. I will keep this in
mind, and I will point this maybe on

slides.

Okay, next one.

If we were in September, and I'm
assuming what September,

where this September or and this
question comes from Philip or

this September.

OK, so probably this one right here. So
if we were in September, wouldn't we

interpret the rally?

as a phase D with backing up action
right before September. This one right

Okay, and the backing up action to what?
To which range? To this one?

So backing up action should be coming
back to

deformation, right?

to their original formation.

So we have, for instance, we could say
that here we have a minor backing up

action, and it's a part of this
formation. Then we have a larger backing

action, major backing up action, and
it's a part still of this whole

You know, if we would have some kind of,
you know,

that would be something like this,
where, you know, we've seen that maybe

whole move is a sign of strength and
then this is the backing up action that

its own trading range, then probably,
yes, we could do this. I think it's less

obvious in this case, Philip. So I
probably would be just thinking that,

know, it's just a trading range on its
own. It's a reaccumulation.

We had an accumulation range, a move up,
and now we are just in the

reaccumulation.

Okay, but good clarifying question
there.

Is it common that one can identify
phases of the larger range with smaller

ranges within that larger range?

Yeah, we could definitely do this. One
of the things, you know, again, to do is

that, you know, texture analysis, right?

If you could instantly see that there
are smaller ranges here that could be

labeled, by the way. I mean, look at
this. Cell and climax, automatic rally,

secondary test, phase A, B, B, C, sign
of strength, backing up

action or LPS, major sign of strength,
major backing up action.

Cell and climax, automatic rally,
secondary test, phase A, B, B, C.

sign of strength, shakeout type of
reaction in D, LPS.

Here we go.

This one, saline climax, automatic
rally, secondary test, phase A, B, C,

LPS, and so forth.

So you could see how you could label.

even smaller structures. And again, you
know, we could label this structure

right here. We could label this
structure right here, this structure

this structure right here.

Everywhere there are trading ranges.

If you just get this concept that you
look at the market through the prism of

different structures, whether it's a
trend or non -trend, whether it's at the

higher, larger timeframe, like, you
know, a large formation or a smaller

formation like this three.

that I've shown you. By the way, here is
another range. Here is another range,

right? So all of those are just ranges
between the swings of the trading range.

If you can understand this concept and
it kind of becomes natural to you, you

will start looking at the market in a
different way. And usually during the

first month, you know, I receive a lot
of emails from students that just say

like, oh my gosh, I look at the markets,
I look at these.

chart and all i see is just all of those
formations and it's so much easier for

me now to interpret the market action
you know through those formations so

hopefully we'll get to this point all
right um

okay what else okay

so a comment from dog actually um

Preliminary supply in May and then
buying climax in July.

So what are we looking at? This
preliminary

supply?

Doug, is this the one? Is this the
formation that we look at and buying

in July like this?

Was that your interpretation, Doug?

To the right for, this is the
preliminary supply, this.

Okay, great. Okay, so Doug has
suggested, what about this type of

right? So by in Climax, then obviously
we could go with either cell in Climax

we could go this whole thing with the
automatic reaction and then secondary

test. This could be phase A.

And then let's say phase B.

and then phase c uh on the level of
trading because

we will be trading here that doesn't
really matter and if you label it like

that that's fine where i have the
problem with this labeling is these two

right here so i'm gonna redo this a
little bit and then you'll see what i

So, let's say that we're still in the
automatic reaction, secondary test,

A, and then it goes into phase B and
phase C. This doesn't really matter to

But what comes before?

When we put, let's say, a buy -in climax
right here at this point, we're

basically neglecting the fact that the
buy -in climax characteristics happened

before that.

And we went through those. A gap,
acceleration to the upside, climactic

acceleration of momentum, extreme volume
signature, which just basically screams

at you and tells you that if it stops on
this climactic volume, then most

likely this is a buying climax.

So it's the character that does not
allow us to say that this is a buying

climax.

So therefore, the second point here is
that it has its own formation so what is

the bias of this formation the bias of
this formation is the distribution so

therefore we would be labeling this as
an up thrust in phase c so therefore the

preliminary supply is going to come
somewhere here so that's the only thing

i would redo but everything else again
for trading purposes you could say that

this whole thing is the buying climax so
sometimes i would say buying climax

trading range What does it mean? This
means some kind of distribution, local

formation that would take us down.

But, you know, I would probably not
identify this necessarily as a buying

climax. So this whole thing, you could
say a buying climax trading range.

All right.

Great. Thank you, Doug.

And what else?

I thought that in phase D, I should
search for biggest rally of the whole

starting from the support level. So the
part of the first phase C should be in

phase D, so from Philip. So we're
talking about this spot.

Okay, so yes, when we look at the
horizontal range, we're

looking at the sign of strength and the
backing up action as our change of

character confirmation.

And usually the sign of strength rally
will be the largest rally in this whole

trading range.

And that's in the horizontal formation
like this.

In the apex formation,

where there is a lot of inactivity

by market participants, a smaller sign
of strength

could be that timing mechanism that
defines a change of character.

So we would be looking at all of the
rallies that occur after the last point

where supply has increased or supply has
produced some kind of downward result

that was exceeding the result to the
downside before.

And we see that the rally there, this
rally, is basically the best rally

that we see.

in this formation.

So it's a little bit of a nuance.

We'll talk about this later on.

But I'm so happy that you guys are
seeing this, that you're asking the

questions. Because if you're asking the
correct question, this means that the

logic that we explained before was also
good and we just did not cover this.

So that's great. All right. So really
good exercise.

All right.

Okay, so with each of these slides for
the homework, I'm going to give you guys

my interpretation, and you could go
through this as a homework and just

all of the labeling that I've done here
in these boxes, gray boxes, and

identifying changes of character, and so
on and so forth.

Hopefully that's helpful. Now let's talk
about phase boundaries. So this is that

theoretical slide that we're going to
have, and we're talking about

here.

So how do we define phase boundaries?
It's extremely important for us to

understand where we put the boundary.

And sometimes it becomes so subjective
that as I was receiving so many

from students, I realized that I need to
kind of like, you know, stop all of the

discretionary talk as to where we are
putting the batteries and that just to

define exactly where we would put that
border between phases.

So let's go through this. And we're
going to start with something slightly

different. The first thing, and this is
one of the most important things right

now at this point of the course that I
want you to remember.

I want you to...

Remember by heart the sequence of
Wyckoff events throughout all of the

accumulation and the distribution.

And therefore, I just want you to
remember that phase A is going to start

the preliminary support,

going to the stop in action by the
selling climax, change of character as

automatic rally, and confirmation of
that change of character as a secondary

test. That secondary test is going to be
a local test.

and test number one to the tailwind
climax.

Phase B is going to have in the
accumulation either a secondary test

at the support level or an upthrust
action

at the resistance level. So these two
are mechanisms

of testing.

Testing what? Testing both supply and
demand.

at the support and the resistance level
in in the instances when the price is

going to overcome the resistance we're
going to say that we're looking at the

thrust action sometimes i label it as up
thrust action like this uta and

then if we're going to have a lower low
then we're going to label it as a

secondary test as a sign of weakness as
a minor sign of weakness actually yeah

Some small corrections here are needed.

Phase C is going to have either a high
-low, and we're going to label it as a

last point of support, or it's going to
have a low -low, and then we will be

talking about either a spring or a shake
-out.

Phase C also could have a test, not
necessarily a secondary test, but a

local test to a spring or a shake -out.

Last point of support,

sign of strength bar, sign of strength
rally, and the backing up action.

Usually phase D will be discussed mostly
around sign of strength rally and the

backing up action.

The sign of strength bar has been added,
you know, to the methodology by me

just, you know, for the class purposes.

This is the spot where in the middle of
the range we're identifying emergence of

institutional urgency to buy, to be in
this position.

And this is one of the points of entry
for us in accumulation on the way up.

We'll talk about this more.

Last point of support are going to be
all of the reactionary lows on the sign

strength rally that present some kind of
buying opportunity.

Those are going to be short -term
weakness situations where we're going to

that the long -term bias is to the
upside.

But the short -term bias has some kind
of weakness,

bearish bias behind it. And those are
going to be

the spots that are going to be
associated with establishing or adding

position.

Then we've talked about two changes of
character in the rate accumulation.

And originally, again, I've talked about
this.

Originally, when I was studying Wyckoff
Method and Hank was introducing me to

this concept, Hank had a concept of the
change of behavior.

He never actually specifically talked
about the change of character.

So change of behavior was basically
identified in late

Phase B and in Phase C and in Phase D.

And what Hank was talking about is

So a change in behavior as behavior on
the rally could become

more bullish.

And then behavior on the reaction at
some point could become more bullish as

well. So for instance, when we look at
the chart and we look, let's say, maybe

at this reaction right here. For the
first time, reaction creates a high and

low. So that's a change of behavior.

It's not necessarily a change of
structure because a change of character

change of structure. But the change of
behavior is not necessarily a change of

structure per se, you know, where we are
confirming the best rally,

the sequence between the best rally and
the best reaction, right? So here's that

sequence, the best rally and then the
best reaction.

So here it is.

throughout this whole range.

So that is a change of character. But
change of behavior could be just a

rally and then the reaction is still
bearish or usual rally and then a better

reaction. So that would be a change of
behavior.

There are two changes of character that
I mentioned.

Our first change of character is going
to be associated with phase A.

So it's the change of character in...

into the trading range and it's going to
be defined as the rally between a

selling climax and automatic rally and
it's going to be confirmed by the

secondary test and then the second
change of character is going to be on

out of the trading range in phase d and
that's going to be a rally between phase

c low and sign of strength rally high so
here's the high here's the low here's

that change of character And it's being
confirmed by the backing up action after

that.

Phase boundaries.

So this is very important.

This is something that I was looking at
in all of your homework today.

So let's go through this. How do we
define the boundaries?

So let's talk about the boundary between
phase A and phase B.

Well, what do we have to see there? So
we want to...

identify a secondary test as the
conclusion of phase A.

And then it's around this area, this is
where we would be looking for the

reversal.

Once we identify this reversal, this is
where we're going to put the boundary

between phase A and phase B. So why
would we do it like this?

Well, obviously we want to include all
of the points of phase A, which is

preliminary supply.

silent climax, automatic rally,
secondary test.

And then we want to identify the ending
of secondary test.

And secondary test is just a reaction.

So we want to find the reversal of a
downswing

that acts as a secondary test. And once
we find this

bar, that's where We're going to put the
boundary between

phases A and B.

We're going to do the same with the
boundary between phase C

and phase D. And in this case, it's a
little bit easier because we do have

another test.

And that test is also just a downswing.

So for this down swing, we're going to
look for the reversal.

And the reversal bar is going to be our
boundary between phases C and

D. So it's somewhere here.

And then the boundary between phases B
and C is the... By

the way, let's just do phase D as well.

right away so kind of the same concept
right so backing up action is going to

a reaction so in the reaction we want to
to look for the reversal so here it's a

little bit more complex like it was here
as well so we see the stopping action

and then we see a minor test so it's out
of this minor test that the boundary

would occur we see here a reaction and
the test to this reaction so it's out of

the you know that test on the reversal
of that test. This is where the boundary

is going to be created.

Now the boundary between phase B and
phase C is a little bit more

Because basically we need to understand
the intention behind phase C, which is

what? Which is testing.

This is the final test at the support
level.

So therefore from this definition, as
this is the test, we need to find

the place in phase...

see where the the first attempt to test
uh the support level and we usually

look into phase b loads and we are
saying okay where is the first time when

loads of phase b were tested so
somewhere here in this area so and we

put the boundary exactly on this level
where the test has happened for phase b

So this is how we define the boundaries
for all of the phases. I really, guys,

would like you to stop here, you know,
stop the recording, make some notes,

think about this, maybe take a chart to
go through that, and just to think about

how you put in those boundaries.

All right, great.

Let's go to the next slide. So we are at
10 to 5, so we have still...

maybe an hour and 10 minutes.

All right. So say yes if you would like
to volunteer.

Who's next?

All right.

Just going to go with the first one,
Philip.

You have to unmute yourself.

Philip?

How are you doing?

Do you hear me?

Yes. Just speak up a little bit.

Okay, sorry.

Yeah, closer to the microphone. Okay,
great.

All right. Am I pronouncing your name
correctly, Philip?

Yeah, thank you. Okay.

So let's look at the first trading
range.

What is catching your eye?

Well, probably the selling climax.

Which is where? The large swings.

So let's label this for you. Point
number one, point number two,

three, and four.

Okay, which one is the selling climax?

Number two, the first would be the
preliminary support, I think.

Okay, so let's start with the
preliminary support, selling climax.

So let's go through the logic of this
labeling.

So we know that selling climax has to be
the stop in action, right? And then

after the stop in action, what should
happen next?

Automatic rally.

Next is going to be automatic rally. And
automatic rally is going to be

associated with what else?

With what kind of change of behavior,
change of character?

I'm kind of giving it out to you, right?

So a change of character, right? Yeah.
So a change of character is going to

like what?

Why is it called a change of character?
What would we see on this rally that is

going to be so different than what we've
seen before?

Well, maybe a bigger price swing than in
the rally before and

maybe a little bit of bigger volume.

Okay, great. And specifically maybe in
this case, because this is an

accumulation after the downtrend, demand
signature is going to go up, right? So

the distance of the rally could
increase.

the volume would go up, the demand is
going to increase, the upspread is going

to increase, right? So where for the
first time do we

see this type of price action and volume
action as well?

Well, maybe between one and two.

Yeah, this first rally, right?

From this low to this high?

Yeah. That looks like that rally that
you've just described is a change of

character. Why is that?

Well, the distance for the rally has
increased, right? Looking at the

attempts to rally, where is it?

Oh, here's one.

Here's another one. And this is the high
of that downswing. So this is the

largest reaction to the upside.

Look at the spread.

It's increasing as well. What can we say
about the volume signature, by the way,

Philip?

Just looking at the spread itself, what
do you think the volume is doing here?

Increasing, hopefully.

Okay, and why do you think it's
increasing?

Well, because it looked like there was a
fight between where the ending

price will be.

and the difference between the range of
the tick of the wicks

and the ending prices, I think. Yes,
absolutely.

And what is this fight?

How would we call this fight?

It's the fight of volatility, right? So
there is a climactic run to the downside

that increases the supply tremendously.

I mean, we're seeing how...

It's a general capitulation here. It's
not institutional. It's not public

capitulation. Everyone is capitulating
here.

There is a gap to the downside, big
spread to the downside. The first

momentum is to the downside.

So the day on the intraday level is
going to look like this.

Previous close.

Maybe open.

I'm sorry. Open is going to be at the
low here. So this is open.

And then momentum is going to carry us
down first.

That's going to be my first initialized
option. Then we're going to have the

rally. And then it's going to carry us
to the close of the previous day.

So that's how the action would look
like. So supply has increased.

Then demand has increased.

And then supply has increased again.

So there is a lot of volatility during
this intraday action.

which brings basically the volume
signature increase and then most likely

kind of spike on that day. So therefore,
a fight between the buyers and sellers

creates volatility, which volatility and
volume is just so connected together,

and increasing the volume suggests that
there is a potential increase in

volatility.

Okay, great. So if now...

If this is a change of character, then
where is our selling climax and

rally?

Okay. Well, so the selling climax should
be the lowest point of this. Okay.

Yeah. Automatic rally. And then the next
move to the downside is going to be

what?

Secondary test.

Secondary test. Could the secondary test
be a low, low?

Yes, it could be. Yes, it could be. It
could be a high low. It could be at the

same level. It could be a low low.

The key is if this is a low low, does
the price come back into the trading

or not? Because if it doesn't, then it's
not a stopping action. It's just a

continuation of the downtrend.

We could have a low low for the
secondary test.

Okay, great.

So this concludes Phase A. What's the
intention behind Phase A?

The change of character.

Yes, the change of character and to stop
the downtrend from going further down,

right? So stopping the trend and then
change the character with which the

unfolds. Okay, phase A. And then what
catches your eye next?

Well, the two weeks which are at the
bottom of the

range.

Yeah, the two ends are free.

Okay. So kind of like quite a few tests
here, right? So smaller test,

bigger test.

So if we would be talking about tests,
the magnitude of tests, probably we

say secondary test number one, that was
a local test, you know, to

sell in Climax.

Test to sell in Climax.

And then...

These two tests look like the same
magnitude, but they are dimension and

which basically tells us that two and
three

in the downward distance

that is dimension is a bullish sign.

And then look how high they are relative
to the selling climax and relative to.

anything in phase A. So that's an almost
like extra bullish sign that we have.

So that's all about bias.

Okay, so that's great.

But then how would we label those two
tests?

Yeah, well, I would have trouble
distinguishing which will be the test in

I think it should be the last one.

And what's the logic? I mean, this is
the correct answer, but what's the logic

behind it?

Well, if in any trading range there
should be like three major tests, and

we have no tests after the three, so the
last one has to be the test in C.

Yeah, and this is, again, third test is

going to be our phase C.

Second test is going to be phase B. So
if this is third test, this is from

the trend should start.

And even though there is already a
definition of the higher highs, higher

this is a conventional TA definition of
the uptrend.

You know, you could argue with me that
we're already in the uptrend here. Yes,

we are, but we're still in the
consolidate information. It's just

Then if this is a consolidation and it's
just upsloping information, then we

need to identify phase C.

So Philip is talking about the test.
This is great. Looks like phase C.

How else could we check and confirm that
this is phase C? Well, what happens

next? Where is the actual uptrend that
doesn't have the same type of the

reactions that's in the trading range?
It's in this area right here.

So here is our kind of like pure uptrend
that we were looking for.

So if this is an uptrend, then the low
that precedes that uptrend, it would be

phase C.

And it does.

So that's great. Another confirmation
that we could have is after phase C,

Philip, what should happen? Which phase?

Phase D.

Phase D. And phase D is going to be
associated with the major sign of

and with the major backing up action,
right? So we could say that in this

and I forgot who was asking me about
that backing up action, that could it

you know, much larger. Well, in this
case, If we would extend the resistance

level, you know, we could see how this
formation is resting on the resistance

level that has been projected, you know,
as an upsloping resistance.

So, yes, this is a major back -and -up
action that has its own trading range.

Now, let's quickly talk about
alternative labeling here.

You could label this as phase A, and
then I've seen that some of you said,

this is a test in phase B, and then this
is it.

phase C. Phase B is still the largest
among three, so that actually is good.

Then you have a sign of strength in D
and a backing up action.

Now, I actually, I'm totally okay with
this labeling. Why?

Because if you would be thinking that
this is an accumulation and your goal is

going to be to establish a high
probability trait, which is going to be

phase C, but in phase D, then you...

kind of opening the position at the same
time as the trader who would label it

as phase C and would try, you know, on
the elements of strength just to get in

in phase D on the way up.

So for trading purposes, it doesn't
really matter.

But I want you guys to kind of
understand and see that we have to have

test, second test, third test.

trend is going to start at the lows of
phase C and so on and so forth. So there

are quite a few things here that I would
be thinking that this labeling is

probably better.

All right, Philippe, what about the
second trading range?

What is the most obvious thing in this
consolidation?

So the first two points, which defines
the trading range, probably.

Okay, so I see it like as these two
points. What is the first point?

How would we label it?

Buying climax?

Okay, why is this a buying climax?

Well, because it's the end of the
uptrend.

But I do not see the... Yeah, and there
is a gap between the

last bullish take, so maybe that's...
That's one indicator.

Okay, so gap.

What else? What about the spread
increase, right?

Look at how the price moved prior to
that, and look at this bar right here.

Something is different, the way how it
moves now.

Faster. Much faster.

So momentum increase, velocity increase,
spread increase, gap to the

upside, and then it stops.

It's a stopping action.

So all of these elements are elements of
the climactic action, in this case, the

buying climate.

Okay, well, what's interesting is the
next reaction, right? So we see that

there's really not a lot of reaction.
That's number one. Secondly, there is

really, after the climactic run, there
is no trading range that would define

some kind of...

causality for the price to move down.
And that's why the move down is just so

small. This, by the way, is just a
preliminary supply.

You know, this range right here.

And it's in these cases where we could
say that because there is not a lot of

distributional activity here at the
buying climax itself, we could label

move to the downside as a shakeout
first.

Or we could label it, you know, so this
will be more alternative labeling.

And then a more conventional would be
just a regular automatic reaction.

So whatever you guys did, that's fine.

The only thing here is if you're
labeling this as a shakeout, a salient

then the next rally is going to be
labeled how, Philip?

Automatic reaction.

Rally, okay, and then secondary test.
And that would be your phase A.

Okay, in the...

alternatively in the more conventional
labeling right so you'll have bind

automatic reaction and then the
secondary test and that would conclude

phase a and that would be the only
difference I want you guys to see this.

studied this in the previous class. I
gave you the slides on the

Some of the reaccumulations are going to
have the structure where they're going

to have a distribution range, and we've
seen this in the previous slide. Then

the price goes down, so you're going to
have a selling climax, and then your

labeling is going to be the same.

And then in another formation where you
have a buying climax, and then you have

just a sharp reaction,

that defines the boundary of the range,
then you could, in some instances, say

that this is a shakeout, and then you
kind of start it over as just a regular

accumulation. So this will be an
alternative labeling.

And YN Climax automatic reaction
secondary test, this would be

conventional.

Please take notes of this.

because this question repeats itself.

All right. Well, Filip, how would you
like to label it? Okay, buying Climax.

Then let's just go with the
conventional. Automatic reaction,

phase A.

Okay, so then what is the next thing
that catches your eye?

Yeah, and now I'm not sure because if
the secondary test is the test to the

upside, I'm not sure what's the...

decline to the support level. But what
catches your eye?

Instead of thinking what comes next and
the problem associated with the labeling

there, what is catching your eye? And by
that I mean, are there any

extremes or extreme behaviors that you
see in the trading range that catches

your eye?

Yeah, the nice rally from the top to the
bottom of the support.

Okay, let's come back to this later on.
What else?

Yeah, and then this rally.

I thought the decline from the secondary
tests to the

bottom of the range.

Yeah, this one.

Okay, what about it?

That's the first thing. And yeah, then
the last time that happened again.

Okay.

Well, when I ask you guys this question,
what catches your eye, obviously I'm

trying for you to identify either
extreme behavior or just extremes,

what are the extremes?

The extremes are going to be all this,

right? So these are the extremes.

So like, for instance, this extreme
right here, this rally off the low.

What do you think this rally is?

I'm not sure.

Okay, that's fine. So we see what
happens after this rally.

We have some kind of backing up action
and then a continuation.

to the upside, right? So we are in the
uptrend environment right here. So we

leaving the trading range and then we
are going into the uptrend. There is

another formation here. But what phase
would we be doing this and what kind of

Wyckoff events would conclude the
trading range in this manner?

It's probably spring.

Where?

From the beginning of the uptrend.

Give me a timestamp.

September.

Okay, so this one right here?

Yeah. Okay, yeah. So at the low, we
probably have a spring. Why is this a

spring, by the way?

Because it's from the support level, and
it goes right through

the whole trading range and with
increasing speed.

Okay, but then...

Also, a spring is going to be a lower
low, right? A spring is going to be a

temporary either attempt or

commitment below the support.

That's how we would look at the spring.

And that's the definition of spring. So
look at this, guys.

how this bar is trying to commit to the
downside on the intraday basis, does not

commit, only has a tail here on the
daily, and then returns quickly back

the trading range.

So it's an upthrust, only reversed, in
reverse.

And then it has some kind of local path
here.

Okay, great. So which phase is going to
have a sprint in it?

The beginning, it's...

In phase C?

Phase C, absolutely. Okay, so if this is
phase C, then everything in between

phase A and phase C is phase B.

We want to check that phase B is the
largest among the three.

This is where the cause is being
created. This is where supply and demand

interacting with the very, very volatile
events and behaviors.

Okay, let's come back to...

Phase B really quickly. The test at the
support level, how would we label that

in Phase B?

Secondary test? Secondary test, yeah.
And then the high that overcomes

resistance points in Phase B.

Sign of strength.

An upthrust action. Upthrust action.

As a minor sign of strength.

And the reason why we're saying a minus
sign of strength is because the price

commits significantly to the upside.

It doesn't just commit a little bit.

It just commits quite significantly.
Look at three closes above, and then the

price spends so much time above here
before it actually commits below.

So that's why a minus sign of strength.
Not every rally in phase B are going to

have characteristics of a minus sign of
strength. This is going to be more of

the exception rather than a norm.

Okay, great. Can I just quickly ask you,
if I have a buying climax,

which is tested by the secondary test,
the first one, so the secondary test is

to the upside, can I...

also mark a secondary test as something
that tests the support level, like in

the different directions.

Yeah, and that was kind of like my
biggest issue with the labeling

that I've seen in the reaccumulation,
where basically this sequence

does not make a lot of sense to me.

I would rather...

sequence this in a different way. I
would rather say bind climax and then

out type of action and then just say
automatic rally and then secondary

But sometimes it doesn't work like this.
There is not really enough room for

phase B and then we could see that from
the behaviors, what is this rally? It is

a test. It is a test of the climactic
action right there.

I saw that in the conventional way, I
started thinking that. Okay, so pass at

the resistance, pass at the support.

And phase B is going to be like that.

We also could label even this upthrust
right here as a secondary test.

Actually, this whole upthrust action in
phase B has been added,

you know, in this course.

We have never used it before.

You know, upthrust always has been
associated with three things.

usually has been associated with the
distribution.

You know, and Hank kind of like, you
know, was always on me about this, you

know, like adding something new to the
methodology.

But it made sense to me to do that.

So upthrust was associated first with
the upthrust in phase B of the

distribution and then upthrust after
distribution in phase C.

It also was associated with the upward
thrust.

in the uptrend. And we would use this as
a momentum tool, where the momentum

increases or decreases on the rally.

So when I realized that this upthrust
right here has the same type of

action as just the regular upthrust and
distribution, it made sense to

label this as an upthrust action rather
than an upthrust itself.

I'm going to have a slide for you on
this.

I think David Wise, Gary Follett, Gary
Dayton are much better with

identification of those upfront actions
everywhere.

And sometimes when I listen to them or I
conduct sessions with them together.

It just kind of amazes me how they see
this.

So there is a lot of value in that type
of work and that type of knowledge, and

I would highly recommend for those of
you who are not familiar with the names

that I've pronounced, go check them out.

I'm actually extremely open to...

cooperation with all of the Wyckoff
teachers. You know, for those of you

who are not new, you guys know that I've
conducted so many classes with all

three of them, you know, and obviously I
like to teach with other teachers, with

other people.

All right. So let's conclude this really
quick. So after phase C, the rally up

is going to be what?

Spring.

With Spring, Spring is always going to
be a lower load to support.

It's not going to be a rally.

And by the way, I've seen, guys, that
some of you would put like Phase C

somewhere here or like a part of the
rally.

No, Phase C intention. What is the
intention, Philip, for Phase C?

It establishes the new trend and changes
the character.

It's the final test.

Final test of supply at the support
level.

That's what Phase C is all about.

So it cannot be a rally.

Phase C is basically the test.

Phase C is not the rally. So for those
of you who are kind of mistakenly

thinking that Phase C could be a part of
the rally, no.

Phase C is the test, and the test only
comes in the accumulation as a reaction

and not as a rally.

Okay, so we concluded the sprint. What
is the rally that comes after the sprint

in Phase D?

Maybe an upthrust action?

I'm not sure.

Sorry. Quick help here. Write it down,
guys. What is this rally?

After phase C and phase D, a sign of
strength. That's correct.

A major sign of strength. Okay, and then
the reaction after that is going to be

a backing up action. Correct as well.

So that would conclude phase D, but we
have a much

bigger formation here. So look at how
one formation is on the top of

another. So we are seeing here.

has sell in climax as a stop in action
in their original range.

Then we see a buy in climax as a stop in
action for the reaccumulation.

And then we're seeing another formation,
which is reaccumulation as well, and it

starts also with the buy in climax, but
on the higher

magnitude level, that was a major sign
of strength that we've just discussed.

So this whole formation here is just
basically a major backing

up action that starts with the buying
climax, with the stopping action,

and then what would be the first
reaction?

How would we label this, Philip?

Automatic reaction.

Automatic reaction. Okay, the next
rally.

Secondary test. Secondary test concludes
our phase A.

Okay.

Look at the character with which this
rally and this reaction moves.

How would we label those? Is this the
best rally so far in this smaller

range?

Yeah, it is.

So when would we experience the best
rally in the trading range that commits

above the resistance?

sustains that progress, stays above, and
then comes exactly to the support level

which acted before as a resistance.

I'm sorry, I'm not sure what you're
asking.

Oh, okay. So look at how the spread here
on this rally, right, increasing.

So it's much better than what we've seen
before.

Here, here, right? So this is the best
rally.

in the trading range.

We know that the best rally in the
trading range probably is going to be

associated with the change of character,
especially on the way out.

And a change of character on the way out
is going to happen in which phase? In

phase D. In phase D. And phase D is
going to be associated with which wagon

point?

Sign of strength, backing up action.
Yes, those are the main... Last point.

last point of support and also sign of
strength bar.

Okay, well, we are not concerned about
this, too.

But we definitely want to identify a
sign of strength rally and the backing

action. So does it look like a sign of
strength rally?

Yes, definitely. Yeah, the character...

with which the sign of strength really
occurs, is going to be such where the

spread to the upside is increasing, the
volume signature is increasing.

And by the definition of the sign of
strength, we need a commitment staying

above and then backing up exactly to the
level of the support.

So that's exactly what's happening right
there.

So this looks like a sign of strength
and a backing up action.

If this is a sign of strength in the
back -and -up action, then the previous

is what?

It's the test in C.

Excellent. C.

Then everything in between A and C is B.

And then sign of strength rally in the
back -and -up action is our phase B.

Okay.

And here it is. Here is our labeling for
all three trading ranges with the

changes of character.

with all of these, you know, points that
we've discussed.

Philip, okay, so the main task right now
for you individually, personally, is

to remember the sequence of all of the Y
-configurants that happen in the

trading.

So I want, this is kind of like a very
individualized task for you right now.

I'll start with that and then go to the
homework, next homework.

All right?

Okay, thank you. Sounds great.

All right, good progress.

So let me see what kind of questions we
have on this slide.

Is there any difference between momentum
and velocity from lean?

Yeah, there is definitely a big
difference between momentum and

is not something that I want to go in
right now.

This is more of the advanced studies,
and I would prefer to talk about this in

practicum. But, you know, at the
minimum, Lim, you could just even

Google definitions on the momentum and
velocity, and it doesn't matter that,

know, you're going to get them from,
like, physics, but there is a difference

there.

But we'll talk about this in a slightly
different context later on.

It's just a big discussion there.

Okay.

How can you tell the difference of the
first accumulation and the second? And

what would be that difference, Joe?

You know, what do you mean by the
difference when you might be looking for

back -and -up action? Okay.

So I think that the biggest problem here
with the back -and -up action is

actually somewhat of a...

not very distinct sign of strength.

Because when we look at this area right
here, and especially taking the sale, we

might say that there is not really a
commitment to the upside here.

But remember, this already acts as a
minus sign of strength.

So if the price is going to come to the
same level, that's at the minimum

already a minus sign of strength.

But we have a much better commitment if
the...

highest commitment was here, then the
highest commitment for the second rally

higher. It just definitely shows that
there is not much better commitment,

but a better commitment to the upside.

Now, the next problem that we have here
is the backing up action itself.

The backing up action actually looks
very normal. There is no increased

spread to the downside that we see here,
which is great.

That tells us that supply is going
lower.

It actually comes to the level of the
buying climax and then stops there and

acts as a spring, comes back into the
trading range.

So everything looks normal. And I would
be actually initiating my position right

on this bar right here.

This would be my last point, my next to
last point of entry here just based

on this. The first one is going to be
spring itself.

reversal off the spring, sign of
strength bar, and then you have to stop

of the resistance level.

And then the next one is going to be, so
this is one, two, three, point number

four, right of the backing up action. So
I would be already fully committed into

this position based on how the price has
developed at this point of time. And it

still would be profitable, right? So
we're profitable right away.

We are profitable throughout this whole
formation.

Now, what happens here is here we are
losing the momentum, and that suggests

some kind of reaction.

The reaction is actually somewhat
healthy. It doesn't prolong for a long

It doesn't have a big difference to the
downside.

The spread does not increase
significantly, but it's still somewhat

than, let's say, this action right here.
It has some gaps to the downside,

actually two of them.

It has some kind of volatility
associated with this. So that requires

test. So at this point of time, you know
that there's going to be a test of this

area. And you might even just say, if
there's going to be a test, then if I

decide to enter somewhere here, it's
going to be inefficient.

Why it's going to be inefficient?

Well, just because if the test requires
time,

then it's going to take some time.

So therefore, we are waiting for the
test of the test.

And it comes on the next reaction.

We see how different this reaction from
the previous one. That's going to be our

point of entry number five.

And then from here, I mean, I've talked
to Philip and we identified that the

character of this rally is different
than anything before.

in this range so therefore a sign of
strength and then the back nap action is

kind of shallow so again you could add
to the position here you could also add

on this bar so that's number five that's
number six number four three

two one and then after that you're going
to be thinking that either this or

this is going to be your uh seven and
eight So there are quite a few points of

entry. And by the way, for those of you
who are campaign investors, and by the

way, we have quite a lot in this class.
So I will be pointing those things out a

lot, you know, campaign points of entry.

Look at this. In the original
accumulation, you want to enter on the,

this is a high or low, you know, this is
your, these are your points of entry

here.

And then this one.

So this is going to be a minus four,
minus three, minus two,

minus one.

So those are the points of entry that
you're going to have in each of the

trading ranges.

And please note, for the long -term
investor, we are campaigning

from one trading range to another.

Our goal is to...

Establish the position at the correct
timing with the correct buys.

So here is our regional positions that
we're opening. And then open them at the

high price level at the point where
phase C is happening and

nothing else.

And then in the next formation, we're
doing the same. Phase C and then all of

the other entries in phase D.

So every time you scale in and you
increase your position size, you are

this at the higher level and you're
doing this in such a way that defines

timing of when the price leaves the
trading range.

I mean, obviously, maybe it was an
exception of this point of entry.

The goal for the long -term investor and
the way how I view my long -term

campaigns.

is to be in the correct stock that is
going to have a very prolonged

cyclical move to the upside where I
could hold on to this position beyond

gear. That's number one. That's number
one goal.

My second goal is to stay in this
position until it's done, until this

run is done. So we have to have a
significant change of character to

ending of the campaign.

There are certain characteristics to the
ending of the campaign that we would be

thinking about.

And also, when I'm in the correct
position as a long

-term campaign position, I want to be
aggressive with my next points of

because the trend is defined.

And now I just know that it's all up to
me to define the correct timing.

on the next stepping stone pre
-accumulation range and to define the

entry and to scale in more to create a
substantial position.

So when it comes to the conclusion on
the climactic run, which is going to be

the terminal climactic run, I have a lot
of money there built in as unrealized

gain and I'm going to take the profits
at that point of time or scale out.

So when you're right, Be a pig.

Don't be scared.

And, you know, I'm saying be a pig.
Obviously, I'm referring to George Soros

specifically his trade in 1992 when he
shorted British pound.

So I was reading about this trade and
you can get his book and he talks about

this trade.

He exposed his fund to 4 % of risk on
this trade.

So, and, you know, working with
institutional clients, you know, I might

that 4%, you know, for them could be a
substantial risk.

But your source is not a very
necessarily kind of like your typical

institutional type.

Here's what I call, and this is very
close to me because I trade the same

more of the concentrated portfolio
investor.

Whenever he sees opportunity and it
works in his favor, he could add to the

position and go beyond your regular risk
parameters.

And that's what I'm suggesting here.

You know, if you're at the advanced
level and you feel comfortable with all

these concepts and with trading in
general, you could be aggressive at

spots with the specific stock, with the
specific pattern.

This is a pattern right here.

that could have that type of aggression
for us that we could call.

All right, great.

We'll talk more about this later.

As you guys could see, there are quite a
few, you know, things that are still

ahead.

Okay. Are cerebral reaccumulation close
to...

Each other sign of very strong bullish
move yet to come. All of these

reaccumulations are more stacked on top
of each other with bias towards upside

from knowledge.

Okay, so I might be misinterpreting the
name again.

Mispronouncing.

There is a logic in what is being said
here.

It's slightly different as to how I
would explain this.

Our first accumulation range is not
necessarily a part of the formation that

comes later on, but it has a very
logical continuation of

why we have so many trading ranges after
the original accumulation.

So think about the original
accumulation.

What is happening here?

Why is this?

accumulation, why is this range has this
type of structure where we're seeing

higher highs and higher lows?

What do you guys think?

What does this represent?

And what kind of behavior by
institutions could be observed through

structure?

Okay, now I'm just saying urgency to
buy, lots of value, still establishing a

position from Joe. Yes, all three are
correct.

And I would concentrate on the first
two.

Because it's an extreme oversold
condition that creates

extreme value proposition for
institutions.

And this extreme value proposition, both
long -term and short -term,

that's what creates that urgent buy.

which we've seen a lot, by the way,
lately with the way how the market has

behaving. And in some of the cases, you
see a lot of oversold conditions.

And from that oversold condition, you
take a stock like Apple

or other leadership type of stocks, and
then they decline so

much in such a short period of time, but
they're still within the secular

structure of their campaign.

So how do you think institutions are
going to look at this? Think about their

fundamental macro perspective.

If a macro money manager thinks that the
markets are short,

vulnerable, and weak, but they present
an opportunity within the

secular uptrend structure, then he or
she is going to come in and just buy

whatever the selection is available to
them based on the parameters of their

system.

And that's going to be their goal. The
fundamental money managers are going to

do the same. They're going to see some
value in the stock like Apple, you know,

and they could say that I'm just based
on the fundamentals. I see the value. So

I'm going to come in and buy. So this
extreme oversold, extreme value

proposition here creates urgency to buy,
you know, at the lows and throughout

all of the rallies.

And that's why, you know, this urgent.

buy -in creates this type of structure.

So then think about what happens next.

Let's say that the CEO bought the
position that they needed at this point

time. Because supply drastically went
down, the price goes up at this point.

And I would even argue that this move to
the upside, and you could go and find

this chart, but this is my assumption
here, just looking at how the price

and looking at that CEO has established
this position.

CEO is inactive on this rally.

And I doubt that institutional trend
followers following hands also are

extremely active. They might be active
more at the beginning of the rally, but

then everything else is kind of...

diminishes as we see momentum going
down, the spread decreasing, more

moves to the upside.

So we're probably seeing that demand is
going down and then the volume signature

in general is going to be lower than in
this area right here.

So as they are in the position and they
have some profit, what do they do? Well,

they might come in on some...

points of the volatility and, you know,
add to the position.

But it's not necessarily going to be a
very extreme, you know, big position

they're going to establish.

I would see even more that maybe on the
rally like this, we're going to see a

lot of increase of the demand signature.
And that's going to be some kind of

value or trend following type of
institution that's going to create

this type of the position. And they're
just going to say, wow.

This has confirmed the trend.

And then there is some short -term value
that I see here. So I'm going to come

in and buy.

But the way how they're buying, they're
not buying just one day.

They could be buying multiple days,
multiple weeks.

So that's what creates this rally.

So this is just a buying wave in the
middle of the trading range by some of

institutions because, again, short -term
value.

and long -term value still, and long
-term bias.

And then imagine that CO got in right
here, and then value

proposition for some of the institutions
at this spot, maybe somewhere here.

Then the rest of this move is just going
to have the signature where we're going

to still see some consistent signature
of the decline.

So something like this, and then
decline, decline, decline.

So you're going to have some pockets of
volume increase throughout this whole

slide here, but generally your highest
volume signature is going to be here.

This is the area where out of the
oversold condition there was so much

institutions, and then it's just going
to go down.

And it's going to go down like this.

And then just different pockets where
locally the volume signature is going to

increase. So CO bought here and then CO
is inactive.

And that's unfortunately not exactly how
we were taught. We were taught that CO

is operating in each of the trading
ranges. And this is not true.

Once they establish the position, you
know, and they just go to other stocks

establish positions there.

They might add on the way up, but not
necessarily.

It's going to be more a function of
other institutions seeing, you know,

establishment of the trend, some short
-term value, and then definitely, you

know, just going through this whole
thing.

All right.

Sounds good.

What else?

Why are you calling the event last point
of support in phase C instead of the

spring right here?

So this is a high or low.

So definitely going to be a last point
of support.

You could call this an attempt to
spring.

But look at this bar right here. So it
comes down, comes below the support. So

it's still a high or low. So that's why.

We could also be calling a spring
something that would go below.

more of the local support, so maybe
something like this, then we could say

this is a spring relative to this low
and still a higher low or less point of

support relative to this low.

Okay, good question.

All right, so let's see where we are. So
we have like 20 minutes or so.

All right, so let's talk about
identification of phase C.

How do we identify faith? We kind of
went through this, and this is just a

shortcut that, again, I've created for
myself and for my students.

This is not necessarily in the
methodology, and that's why, you know,

started calling these Romanisms.

So I'm okay with this. I'm kind of like,
when I say that this is a Romanism, so

you instantly should be thinking, you
know, not in the method, something that,

you know, kind of like,

more proprietary to this course, but
still it's going to be based on the

of Wyckoff ideas.

So I've talked about three tests at the
support level, right? So the first test

is going to be a local test of the
climactic action. Second test, in phase

the laws of the saline climax and the
secondary test. So in phase B, we're

basically testing the previous tests.

In phase C, At the support level, this
is the last test, the final test of the

supply at that support level.

And then our test number four is going
to be a back -nup action.

And it kind of is logical to me that the
initial tests are going to be at the

support level, and then the last test is
going to be at the next value zone.

So they've observed the supply at the
lows.

That pushes the price up into the new
highs.

In this case, not necessarily new highs,
but new highs relative to the highs in

phases A and B. So kind of like in the
same zone.

As it comes back to this area, we are
going to experience some kind of mean

reversion trade by professionals.

That's going to bring us to the
increased supply signature, change of

of the backing up action and therefore
we're going to have some kind of test

there so a test is the test number four
at this

level that we would say that it's going
to be a backup action in phase d and

it's being confirmed it confirms the
change of character the conclusion of

formation of the change of character and
then once the resumption of this test

happens then we're going to continue
with the uptrend Another identification

phase C that is very valuable to us is
the second point of fear.

So the points of fear are all going to
be discussed within the context of the

sentiment. Our first sentiment, bearish
sentiment, that we could find is going

to end there. Therefore, the first point
of fear is going to be in phase A. It's

going to be associated with the selling
climax.

Why this point of fear develops this
way? Well, I think I've mentioned this

times.

We are experiencing a capitulation by

weekends.

And in this instance, it's more of a
terminal capitulation.

And therefore, I sometimes call it a
general.

that would have both institutions and
public behind this capitulation.

And what is a capitulation?

It's just basically panic.

People at this point of time are
experiencing a lot of emotional pain

the losses.

And they can't withstand this pain
anymore and they're giving up on their

positions and they're saying, get me out
at any point of price time, but just

get me out. I cannot bear this anymore.

So therefore, this type of activity is
going to be associated with a lot of

selling, and a lot of selling is going
to produce technical characteristics as

increasing the momentum, increasing the
velocity, increasing the downspread,

increasing the distance to the downside.

that we see increase in the volume
signature and specifically increase in

supply signature by weak hands and
increase of the demand signature

by strong hands.

So first point of fear.

The second point of fear is not
necessarily going to be in phase B.

It could be in phase C. Why is that?

Well, think about the sentiment of weak
hands. They just sold here, and then the

price went up. What do you think they
feel at this point?

This is definitely a regret that they
have.

So what are they going to do?

They're going to buy.

If they're regretful that they didn't
hold on to this, and the price went up

like this, they're going to buy here,
and they're going to buy here, and

going to buy somewhere here.

Now, if the price goes down in phase B
into another test, what do you think

they're going to do now?

They're probably going to say, well, I
gave up my position on the selling

climax, and that was a mistake.

So this time, I'm going to hold on to
this position.

Have you guys done this?

Well, I definitely have done this
before.

I'm just happy I'm not doing this
anymore, but that was the sentiment.

That's how we trade when we are
amateurs.

We trade on our behaviors, on our
emotions.

We cannot control those yet.

So they are holding on to this position,
and when the price goes down, they're

still saying it will go up.

And as it goes up, what do they feel?

They feel happiness, right? So they feel
happy because the price goes by and

they think that was a good decision to
buy here, hold on to the stock, and now

the price is back almost into the same
area.

And they feel happy. So they're holding
on to the position and they might be

even adding to the position, maybe
somewhere at this spot right here.

So imagine what happens next when the
price...

gets down and has some kind of, you
know, or goes down just a little bit.

What do you think they're going to
experience then?

I mean, they've been through this ups
and downs, emotional ups and downs, up

the phase C point, and they're so
exhausted.

They are extremely exhausted
emotionally.

And they're just saying at this point,
when the price goes down into phase C

low, they're saying like, get me out.

And this time, they make a promise.

What is that promise, by the way, guys?
Could you think of one?

Well, that promise is to never trade
this stock again.

Or at least for the time being.

It's an emotional withdrawal from
emotional pain that is based on just

inexperience, no knowledge, no skill.

And unfortunately, that's how weak
hands, that's their pattern,

that's their cycle.

They will go to the next dog and they
will experience the same things over and

over. It could be a different contextual
interpretation of the sentiment of how

it happens. But basically, on the very
primal level, of how we experience

emotions. It's going to be the same.

So that's why this is going to be the
second time where weak

hands are going to capitulate.

Now this is going to be a less of
capitulation just because,

and it's going to be more public
capitulation.

than institutional. Why? Because
institutional weak hands, they are much

learners. They are much more adaptive
because if they don't adapt quicker,

they're going to lose their job, they're
going to lose their salaries.

Money management is based on the
performance matrix.

So if you don't perform, you don't get
the money, you don't get the salary, you

don't have a job.

So it's much stricter there than with
the public.

So therefore,

institutions hopefully learn much
faster, at least what I see, working

and working with the public retail
trader. So therefore, the second point

fear is going to be more associated with
public than with institutions.

And if that's the case, usually the
volume signature on this is going to

increase locally of phase B,

but it's going to decrease

relative to phase A law, relative to
selling climax,

where we have both institutions and
public capitulating at the same time.

That's a very small nuance, but it's a
very, very big point.

Because if you could see this logic
through the chart,

And you could understand that with the
public capitulating here, going into

phase C, and we're seeing that on the
technical picture, the price goes down,

but then quickly comes back.

You might be thinking this is the last
time when public capitulates, and where

institutions, the last time at the
support level, are actually buying a

meaningful position.

And they add them to the position that
they already have.

Therefore, this last...

Public supply is observed at this level,
and therefore, what's going to happen

after that? There is only one thing. The
price will go up. As supply has been

observed at the support level, those
last pieces on last public capitulation

into Phase C, that absorption leads to
the rise to the sign

of strength.

And then this is where mean reversion
trades happen.

So it's kind of funny, you know, at some
point when you understand, you know,

the mechanics of it as to what happens
next with weak hands. They said, never,

never, never will I get into this
position again, into this stock.

And they are missing this whole rally
right here. And once it overcomes and it

becomes a CNBC item.

And everybody is screaming, it's in the
uptrend.

They're saying, I got to go in.

So they're establishing the position
right here again.

And they're saying, I said that I'm not
going to go in into this position, but

this is the time now.

And then the first time the price goes
down into the backing up action, they

so already conditioned on all of these
reactions and all of this.

you know, attempts to go up and failure,
attempts to go up and failure, attempt

to go up and then the beginning of the
failure in their rise, what do you think

they're going to do here?

They're going to sell their position
again with the loss and they're going to

say, well, now for sure, I'm not going
to go into this position. I should write

just, you know, a book for kids about
this, you know, just explain to them in

such simplistic terms, you know, how
their psychology.

uh you know unfold so they are like uh
i'm selling with the loss and now i'm

going to go in into this position and
they are missing the whole trip so now

imagine if this is a distribution
somewhere here really quickly and then

stop maybe here if this is a
distribution they you know on the way up

like what did i do why did i close this
position

And then as they go into the next
consolidation, which is the

they're seeing a change of character.

So they're seeing what? They're seeing
reaction, which creates value for them,

short -term value.

And I'm talking about weekends.

In this case, not just public, but
institutions as well.

And they're saying, like, I've got to go
in and buy.

So they're buying here.

On the secondary test, they feel great.

On the next reaction to the downside,
they're saying, I made this stupid

here at the original accumulation to get
out of the position. And every time it

was going up after I got out. So I'm
going to hold on to this.

Okay, well, holding on.

And what happens in the distribution?

Obviously not what happened with Apple
at this time, but I'm just giving you an

example here.

All right, so they accumulate, they
accumulate.

The price goes up into the upthrust.

This becomes a second point of
excitement for them.

The first one was on the buying climax.
This is where they will be, you know,

buyers as well.

And they are saying like, this time I'm
just going to hold on to this.

As the price goes down into this
excitement with them adding to the

institutions are going to sell, sell.

sell on the change of character, sell in
phase B, sell on the way down, and then

capitulate on the way down. And
throughout this whole formation, weak

going to hold on and they're going to
capitulate relative to the emotional

that they have that they can withstand
and to the knowledge and skill that they

have. So some of them are going to
capitulate some way here, and usually

area is going to be associated with the
largest volume signature.

And some of them are going to capitulate
maybe some way here. So depending on,

you know, the system for institutions
and depending on the emotional pain for

the public.

Doug is saying, been there, done that,
great description.

Yes, we all have done that.

We all have experienced that pain.

This is the reason why you are in this
class.

Going through your emails, reading
those, and reading who you are as

right now and who you've been as traders
and your inspirations.

The majority of students in this class
are here for the right reason.

You guys are trying to figure out how to
make money in the market by...

having the knowledge, developing the
skill, developing the system, and being

able to control your own behaviors in a
different way than how you've done

before or what you're doing right now.

And I'm just showing you how you could
interpret the chart in such a way that

would be systematic, logical, and that
would elevate your emotional pain

you will know.

at which points you need to act. You
will know at which points you need to

in, to get out, to add, to scale out.

It's just going to take some time, but
it's going to be valuable.

And that's kind of like the message to
all of your emails that I've seen today

from you guys.

All right. I think this is a good point
for us to stop.

Right? So it's almost six.

And let's go through the homework.

I'm still going to give you the
homework, so let me just do this.

Okay, you should not be able to see
anything.

And, okay, now you should be able to see
the homework slide.

Okay, so what do we do next? Well, first
of all, I would like you to continue

with, you know, if you have a lot of
time, And there are some of you who told

me, I'm here to gain as much knowledge
from you as possible.

I'm going to do anything to gain that
skill.

I'm passionate about this. I have time
for this. So for those of you who are

like that, so your task is, so I'm going
to put this as an optional task.

Your task is to watch this session
again.

Your second task, make notes.

Send those to me.

Your third task is going to be go
through

HD homework again.

The one that we've covered.

And kind of go through your chart and
then my labeling.

And compare.

And ask yourself one question.

Why?

Why did he label it like this?

So this type of questioning will bring
more questions that we could answer

on.

But what it does is it makes you think.

One of the things that I'm also
noticing, and I'm not saying this about

group in particular or anybody in
particular, but we as people tend to

thinking. You know, we kind of sometimes
think that we know everything.

That's not the case. I mean, like, I've
been teaching this material for quite

some time. You know, and even some
people that say, yeah, I've taken

from this and this. I've read these
books. I've read these articles. I know

methodology. They come to this class.

And they feel how much they don't know.

And that's just because the market is
much more than anything that we've

started, you know, in our lifetime.

You know, it's just such a complex
pattern. It's such a complex, you know,

algorithm and system that we're playing
with.

So you have to always be, you know,
educating yourself.

And the best...

Education, I think, you know, going
through this course is always asking the

question of why.

Why is this happening?

So that's an extremely important
question. So this is for those of you

time and who want, you know, more of
the,

more assignments, right?

But then for everyone else,

Regular assignment is just going to be
the same assignment that we've done with

Home Depot, but on the distribution.

So I'm going to give you the slides with
the distributional patterns. You know

that this is a distribution, and then
you just have to label this.

Now, I'm also going to give you some
slides on the distribution and WICA

and the events and the changes of
character in the distribution pattern

So you will have to kind of like go
through those slides, read those, read

characteristics, and so on and so forth.

But that's the only homework that I want
you to do.

Watching the recording, again, is
optional.

I totally understand when somebody
emails me and says, well, I've got a

five job. It's very demanding. And then
I have a family.

Guys, I totally hear you. And to those
of you who are in this situation,

go at your own pace.

You know, you don't have to put so much
pressure on yourself right away.

But just listen to the recordings.

That could be one thing to do.

Then if you have time, do the homework,
send it to me.

Then if you have more time, well, then
rewatch the recording. But if you can't

rewatch the recording, don't worry.

Just go through the course this one
time. You will have the recordings after

course. Go through the course again by
yourself.

Or you can sign up for the course again
at the alumni rate and then go through

the live sessions again with me.

A lot of people, actually. A lot of
alumni in this class right now.

Because, again, so much material.

Three hours today and I gave you so
much.

I probably have given you over 100
concepts.

You know, those small details that you
have to go through. So it just takes

time. So it's all understandable.

So let's look at the slides for this
homework.

Here's one.

Callaway Golf.

Netflix.

Apple, Nasdaq,

Alexian Pharmaceutical, and Yahoo.

So Yahoo is going to be your, probably
Alexian Pharmaceutical and Yahoo are

going to be the two hardest charts.

Everything else should be quite easy if
you follow the schematics.

And then I'm going to give you this
material, but we will go through this

material hopefully next time, but this
is something that you should be

before you do the homework.

So the like of events, the phases,
characteristics of those events,

again, that I want you to go through to
remember, and different

schematics on how distribution could
unfold.

Again, this is something that we will be
covering in the next class.

All right, guys.

Well, that's it for today. Good session.

I would be expecting that the next
session is going to be as intense as

one.

So please be prepared that we're going
to go to the third hour, to the end of

the third hour, and we're going to
finish first the homework on Home Depot.

still very crucial for us to go through
that. And then hopefully next class, but

if not, then the class after that, we're
going to go through the homework on the

distribution.

And after that, once we conclude our
structural analysis, that's when we're

going to switch to supply and demand.

All right.

I'm going to be expecting your emails
with your homework.

Good job, everybody, you know, with the
homework.

I really liked it. Good job today with
all of the volunteers. And you guys have

been writing a lot. I see a lot of
comments.

So this is great. This is exactly the
way how I want to conduct this class.

This is exactly the... type of
interactivity that I want to have with

that, happy trading for this week. I'll
see you next Monday. Thank you, guys.

Bye -bye.