All language subtitles for Session 04-WTC (Jan 28, 2019)

Hello, everyone. Today is January 28th,
and this is our session number four of

the Wyckoff Trading Course.

Just FYI, I am sick. I'm not feeling
well, so I do not know how long I can

go on with the class. Maybe I'll feel
that as I start talking

more, it kind of comes back to me and I
have more energy.

I'm totally on drugs right now.

And, you know, hopefully that will just
carry me through the class. If we can't

finish, you know, at least two hours or
two and a half hours, then, you know,

I'll just find some time to extend other
classes and we'll just compensate for

the lost time like that.

All right. Having said this, I'm excited
to be here.

I went through your homework again just
because I've been feeling so bad,

especially today and throughout the
whole weekend.

I looked at your homework.

So I opened all of them. I have not
answered all of you.

So that's kind of like, you know, what's
going on.

My overall impression of the homework
was that we're definitely on a good

There are some of the mistakes that are
common mistakes.

We'll talk about this as we review the
distribution homework.

Hopefully, we'll start it today, if not
next week.

But I've noticed one thing. There is
definitely a trend of improvement that's

happening for the whole group.

So that's what is so good and exciting
that I see

how the boundaries are much better. I
see how the labeling is much better. So

we're definitely doing a lot of good
things.

All right, next session, February 4th in
a week.

What will we be discussing?

Let's just go to the outline right away.
So today, we're still going to review

the homework from last week on Home
Depot, and I will try to go a little bit

faster.

Maybe we'll not have the volunteers for
that. Maybe we'll have some volunteers

for the distribution labeling. So we'll
try to cover as much as possible.

And then still to cover, actually, we've
covered phase boundaries, right? So

we've covered phase boundaries. We've
covered phase C identification.

I think, yes, so all of this, sprints
and shakeouts, signs of strength,

and downslope and trading range, those
are going to be discussed.

distribution, and then the next homework
on Microsoft.

So this homework is going to be
interesting because this is usually the

when I let you guys do the homework, you
send it to me, but then I give you the

homework as slides, you know, not
necessarily we're going to discuss it in

classroom.

And then next session, we're going to
finish our price structural analysis.

is going to be the final session on
price structural analysis.

That doesn't mean that we will not use
it in other months.

We're still going to use price
structural analysis so much

during our supply and demand sessions.

And session number five will be the last
one on the price structural analysis.

Okay, let's come back.

All right.

As usual, all of our discussions are for
educational purposes only.

And we're going to start with the Q &A,
just one question, or rather one slide.

And this slide and question comes from
Justin.

And by the way, guys, if you have in
your mind some kind of question like,

why are we discussing this particular
question?

Well, first of all, because I picked it.

Secondly, I see value of this discussion
right now because we're discussing the

price structural analysis as number one,
so we could go through that.

And then it definitely has that feel of
the current market, so

it's great. Some of you are sending me
requests of look at the

chart and comment.

So usually this is not the class to do
this. I mean, like, unless you are right

on the money with the material that we
are going through, then I might consider

this. My suggestion, and we have such a
beautiful venue to do this, you know, to

go through the analysis of stocks that
are like last bought stocks, right?

It's the Wednesday class, like of market
discussion class.

So you could submit your chart there.

Bruce and I will discuss it together.

Obviously, I can't do it every time,
every session.

You really, really would have to sign up
for the class, meaning that you'll have

to be a member of that class. But once
in a while, I'll let you guys in,

and we do this once a semester. At the
end of the whole cycle, I'll invite you

for one of those sessions.

All right, so let's come back to the
slide, and we're looking at Home Depot.

Home Depot again.

So a few questions here. In
accumulation, does backing up action

volume all of the time? So that's
question number one.

And if it does, is that where you want
to enter a position?

Second question, do sprints LPS always
happen on reversal candle or hammer,

right?

And then the last question in the
diagram below, it looks like the circle

major sign of weakness, but then it
continues upward back into the trading

form in the high load. Does that make
the circle a spring instead?

So very good questions, Justin, and
let's address those one by one.

So backing up action, does it always
happen on low volume?

No, it doesn't have to be on the low
volume. The volume could increase.

the volume signature like this, right in
this area right here. So what would it

mean? How would you interpret this?

Well, we would be thinking that with the
volume increase, there is a lot of

institutional participation, right?
There is a lot of exchange of shares.

How do we know the bias of institutional
participation here?

What do you think, guys?

Well, we have to look at the price,
right? So we know that they would be

with the increased volume signature.

But we need to look at the price to see
what that signature actually does, what

that effort actually does.

Does it push the price below the area of
the support into the low?

Does the price have the ability to stay
up in this area?

And it seems to me that it's holding up.
It doesn't go down. Today was kind of

like a day like this.

And that suggests that there is on the
higher

volume signature that institutions are
present, but they're buyers.

They're absorbing whatever supply is
coming with that big volume signature.

Now, in reality, you know, it's
different, right?

It's a different volume signature. So we
see how supply increases and then how

supply starts to decrease.

So we have a decrease of the supply into
the backing up action.

So not necessarily that we have to have
a low volume signature. It's preferable.

But then if we do have a high volume
signature, then we need to look at the

result. In both cases, the result is
actually good.

And we would be actually thinking here
that we are in some kind of downslope

information where we have the commitment
above the

sloping resistance as a sign of strength
and then a backing up action that backs

up exactly into the area of the support
that acted before as the resistance. And

look how all of these four points are
working very nicely.

Let's go right away into the question
about a sign of weakness or a spring.

So I would approach it from two
different perspectives.

The first one is we are looking at what
has happened recently.

So, for instance, what has happened in
this area.

We're seeing that there is a very
substantial rally.

is much better than the rallies that
we've seen before in this trading range.

So that tells us that there is some kind
of change of character that is

happening. And then we've seen the
reaction that is not the same as the

that we've seen in the trading range.

So that's also a confirmation of that
change of character. Change of character

for what? Well, we've been in the
downtrending environment even with

lower highs and lower lows going into a
potential spring. We're still in the

downtrend by the definition, although
this looks already as a consolidation.

So this change of character on the way
out and the way the character of this

change of character, best rally and then
very shallow reaction

suggests that the bias is actually to
the upside.

And if the bias is to the upside and we
look at the area of the support and we

see the price just temporarily
committing below, then this is most

spring and not a sign of weakness.

A sign of weakness here I think could
be, a spring could

be confused for the sign of weakness
here if we look at the horizontal

structure.

because the commitment below is quite
significant. There are one, two, three

closes below the area of the support,
actually, the support cluster here.

So that view might be actually not the
most

favorable. I would still use these lows
and highs to connect them together and

look at how the price commits just
temporarily at the end of this move.

Maybe there are two closes, but there is
definitely one that commits

significantly.

And then everything else is on the
upside.

Also, for the buys, we kind of see this
area, which is very interesting.

It's an increase in uptrend.

And also we see how momentum increases
behind it.

And it puts the price.

quickly to the opposite velocity starts
to increase so those could be the

elements of either significant
deterioration of the supply or some

behind it and in this case i think that
majority of the time has been done here

here and even on the way down here
because institutions don't function like

retail traders they're always thinking
about the value and liquidity

opportunities to get in into the
position so it seems to me that this is

the value zone is right here um here
we're seeing all this buying

and then as the price goes below the
value zone it becomes extreme value

and this is just my view for the whole
market it's from the extreme value in

where we're still technically in the
long -term

uptrend cycle, right, since 2009 lows.

So until we break the lows that were
created in December, we're still going

be thinking about that. So think for a
second that the long -term bias is up.

So what is this?

quick decline means for the market in
this particular stock well it means that

uh short term we had some kind of
shakeout type of action and then the

creates that extreme value that is very
attractive to institutions another way

of looking at this is just looking at
the overall signature here volume

signature now it definitely increased
over what well over this whole period

right here

So there is some buying in this area,
and that's why I'm thinking it's

to the upside.

Do sprints, LPS, always happen on the
reversal candle? For example, hammer.

There are so many ways how that could
happen.

You could have a hammer. You could have
just the bar that's going to close.

the bodies of the previous bars.

There are so many ways of how a reversal
could happen. We will be studying that

later on in the fourth month.

Philip is asking, what is the angle of
the price movement that is interpreted

uptrend, downtrend instead of the
trading rate?

I think this is a really good question
because that's something that produces

that

you know, possible mistakes. I've seen
people, you know, showing me something

like this, where it is clearly an
uptrend, and yet they would start

like this, phase A, phase B, phase C,
something like this. This is definitely

not correct.

Definitely not correct.

So I'm not sure about the angle, though,
right? So Philip is asking about the

angle. But what I'm pretty much sure is
that the way how the structure

unfolds. Look at the character of the
down move right here. What do we see on

the opposite side of this reaction?

All of the counter move are very, very
mediocre.

There is no lift in those. So it just
tells us that the cell still persists

and that the bars cannot have...

you know a good meaningful rally and
it's only comes here on the automatic

which becomes a change of character
right away so you know that the change

character is going to suggest a trading
range for consolidation and then once

you start seeing lower highs and lower
lows that's when you try to connect them

and see uh if it would make sense um to
see the price deviate around the mean

And if you could see that, then it's
definitely a trading range. And it's a

downsloping range because of the lower
highs and lower lows.

But I wouldn't be thinking necessarily
in terms of the end goal. I would be

thinking in terms of how the trading
range starts.

Okay, great. Well, Justin, thank you.

All right, let's come back to our
homework.

All right, and the next slide here,

we have three trading ranges.

Yeah, let's have a volunteer.

I just feel like I need a little bit of
a break. So say yes, Alan, you too.

Hi, Rama.

Hi, Roman.

Yeah. Rama? Is it Rama, right?

R -A -M -A, yeah.

Yeah, okay, great.

Okay, so let's start with the first
trading range.

So what catches your eye?

Actually, no, no, no. Let's stop here
for a second.

Let's start with the different question.

What is it? Is it an accumulation or a
reaccumulation?

It's a reaccumulation, the first... Why
is it a reaccumulation?

There is a preceding uptrend.

Yes. So we have a move to the upside,
consolidation, trading range, and then

resumption of this trend. So it's a
reaccumulation, not accumulation.

Okay, great. So what catches your eye
the most in this formation?

It's the...

The buying climax followed by a deep
automatic

reaction.

And later, the next is the secondary

test that happens after that.

And that completes the phase A.

Okay. So let's talk about this.

There are quite a few concepts here that
we could discuss.

So it seems to me that the bind climax
is defined correctly, right? Because

we're seeing some kind of climax.

climactic run with the increased spread,
and that definitely defines the

boundary of the trading range.

The alternative labeling to this could
be this whole area

being a buying climax trading range.

I would understand that, so that's fine
as well.

The conventional probably would be
preliminary supply.

buying climax, and then look what
happens next.

What does this remind you of, the next
price action to the downside?

The next price action to the downside is
the, I would consider

that as an automatic reaction.

Of course, yes, and that would be a very
conventional label here,

as we know.

In terms of the character with which the
price goes down, I mean, look at how it

goes down. First of all, there is not a
lot of the distributional pattern here

at the top unless we're considering this
whole pattern here.

Right. So look at this spread,
increasing spread that goes throughout

closes in this area. That's number one.
And then secondly, look at the gap the

next day.

Yeah. And I think the whole price action
reminds me of a climactic.

action yes so climactic action and
climactic action

usually is going to be associated with
two things either climax itself so in

this case selling climax early climax or
a shakeout yeah right

so yeah i mean i would say i would say
that it's a climactic action

very much in association with selling
climax.

Okay, so let's say that this is a
selling climax. Then what would the

be after that?

After that, the price is expected to go
and test the area where

the resistance is established. That is,
they're testing the buying climax,

the area near the buy.

But think about this. We're discussing a
selling climax, climactic action, or a

shakeout. So either labeling would be
okay here.

What should happen after the selling
climax?

Not the test.

If we experienced a selling climax, then
we are in the downtrend.

Where is this downtrend? Well, it's this
whole move to the downside.

So what happens next?

The next, it goes into the trading
range.

Yes.

And from there, there is a rally.

How would you label the first rally of
the low of the selling climax?

That would be labeled as an automatic
reaction.

Automatic rally in the accumulation.

And then the next reaction would be
labeled as?

Secondary test.

Which is testing what?

Testing the area of selling climax.

Okay. So that's exactly what is
happening here.

Yeah. Why do we say that this is an
automatic rally?

Well, look at the quality of the rally.
What does this tell you?

Relative to the downtrend, it's a change
of character.

It's the largest reaction to the upside
since the buying climax.

So, of course, this is going to be a
change of character, and therefore it

be labeled as an automatic rally.

Then look at the next reaction.

How does it look to you?

Diminishing spread, diminishing volume
signature, stopping here at the high or

low.

So that looks like a test.

So, therefore, this is a secondary test
of the climactic action itself. So,

therefore... Our labeling could be like
this.

Shake out, automatic rally, change of
character, and then

secondary test. And here is our phase A.

Right. Okay, so what's next that catches
your eye?

The next significant is the rally that
goes up to

the level of the resistance.

Okay.

And that has a character of essentially
upthrust.

Okay. Yeah.

So it's an upthrust action. Action, yes.
We know that this is a reaccumulation.

Sure. So we'll label this as an upthrust
action.

Which phase is that?

Phase B.

In phase B. Okay, well, okay, we defined
that.

What's the next thing that catches your
eye?

Let's do this.

Where is our phase C?

The phase C is right towards the area
preceding the march.

And phase C, this is the area where

immediately preceding the march. Okay,
something like this?

Yeah. Okay, yeah. So we could have kind
of like a small argument here, you know,

what phase C is.

I would say I would mark it even closer,
you know, somewhere around,

yeah. Okay.

So one of the things that, you know,
we've talked about, guys, last time is

looking at different phases and trying
to define the Kind of like the

structures within those phases, right?
So, for instance, this is one structure.

It belongs to phase A.

This is the test of another structure
and has a structure of its own. It's

B. And then it seems to me that all of
these reactions here kind of belong to

the next structure.

Right. So, and that's how we want to
define phases, right? So, we want to say

that... This is our phase C. And then
everything in between is B.

And this is our first test, right? So
test number one, test number two.

And then this whole area right here is
just more complex. So that becomes our

test number three in there for a
potential phase C.

I don't mind labeling it differently,
right? So my first labeling was

here. And I think on my slide, that's
how it is.

But I would be just paying more
attention to the texture of the

each of the phases.

So then what we have here is a buy -in
climax, shake -out,

automatic rally, secondary test, phase
A.

What is the intention behind phase A,
really quick?

A change of character.

Stop in action? Stopping, yeah.

So we're stopping the previous trend.

Then let's say if this is Phase C,
what's the intention behind Phase C?

Phase C marks the commencement of the
next uptrend. That's not the

intention, though. What is the intention
behind Phase C?

Phase C, again, marks the change of
character as the price gets out of the

trading. That's not the intention of
Phase C. What is the intention behind

C? What does it do?

If this is to stop, if phase A is to
stop the previous move, then phase

C is going to be our final test of
supply at support

level.

So I want you to remember this by heart.

Okay, so what's the intention behind
phase B?

Phase B essentially shows

multiple areas of tests and testing the
resistance to the upside and testing the

support to the downside.

Okay. Well, Rama, I want you to come
back to schematics, right, because I put

there the intentions for each phases
intentionally.

Okay. And I want you to remember those
intentions. So phase B intention is to

define the relationship between supply
and demand.

Yeah.

And then sometimes I kind of like think
about this like a war zone.

You know, it's going to be extremely
volatile as a zone by itself.

And then another intention behind phase
B is to build a cause.

So those are the intentions behind phase
B. Okay, so where is our phase D?

Phase D.

follows the last point of supply,

precedes the last point of supply, and
then as the price moves out of the

trading range.

The last point of support, just because
we are in the... Sorry, support, sorry,

yeah.

Okay.

Okay, so give me the timestamp for Phase
D.

Phase D would be...

just beyond the second line you have
drawn to mark the phase C. That's

just after the beginning of the march.
And where is the boundary for that phase

D?

Let's say the boundary between D and E.

The boundary between D and E would be
where

your pointer is situated.

Right there, SS.

Okay. Yeah.

All right. And what is the intention
behind Phase D?

It's the Phase D marks the beginning of

the uptrend as the price exits the
trading range.

Okay. So it's a markup? In the trading
range, this is a little bit different

structure where we see an apex
formation.

So apex formations are going to have
different phases.

Okay, great.

Okay, let's go and look at the
distribution

range. So what catches your eye there?

It's an upsloping trading range.

That's the first feature that strikes
me.

And after that is the buying

climax.

From the price action, I could see...
What is the timestamp for a buying

Just after May, between May and June,
there is a marked

acceleration of the price.

And it's almost a vertical parabolic
rise.

So that's where the buying climax, I
mean, it leads up to the buying climax

and followed by a small

pullback, which... Label, label, label
everything for me.

Do not describe what you see because we
see the chart. We understand what's

happening. I want you to give me, like,
short answers on the label, all right?

So if this is the buying climax, then
the next point, I want you to label all

these points right here. Okay.

The next point would be the automatic
reaction.

Mm -hmm.

Okay. Followed by the secondary test.

Okay. Phase?

A.

Okay.

And then followed by phase B where the
price comes and tests.

I could see two small tests.

Okay, we see that too. So another
secondary area of the secondary test.

Okay, so where is our phase C?

Phase C is the point you marked last,
the phase C, yeah.

Okay, so how would we label phase C
here, you know, this attempt to

overcome the previous resistance?

I would label that as an upthrust, yeah.

Uptrust, and because this is
distribution, so upthrust after

Okay, we want to check on all of the
phases, so phase A.

Phase B and phase C, we want phase B to
be the largest, and it seems

like it's almost there. It's almost
there.

Okay, so what comes after phase C?

Phase D.

Okay, and specifically with the, you
know, I see that the price drops down to

this level right here. How would we
label it?

A major sign of weakness.

Okay, followed by?

the last point of supply.

That comes exactly, guys, look at that.
It comes exactly to the point of the

resistance which acted before as a
support.

Right. So, therefore, you know, this
upsloping labeling makes

a lot of sense because all of the
concepts have fallen to the upsloping

structure.

Okay, great.

Okay.

Rama, any questions?

Yeah.

I think the intentions, the

point you made about intention is well
taken because I think that's something

that I'm working on.

Yeah,

so just...

you know go to the schematics go to
those um slides with the schematic in

description and there you can find all
of the characteristics for all of the

elements which i think that you're doing
fine with i think maybe intentions a

little bit just to freshen up and um and
then obviously you know we we want the

label in here right so sometimes i feel
like Students go into the description,

and my goal is always to stop them
because we could see the chart. Yeah, we

the chart. But what we're interested in
is how do you see the labeling? How do

you see the structure?

So, yeah, just brush up on the
intentions, and everything else is fine.

Okay. And in the first trading range,
one of the things I noticed is that the

of the three lows between March,
February and March, the third

one is the higher low.

The second one is, yeah, the second one
is kind of on the same level. Okay.

So is it reasonable to mark that as the
center, the

phase C around that higher low?

You know, if you label it like this,
like you originally labeled it, I'm

fine because phase C in the
reaccumulation especially would suggest

have to come in right here on this bar,
right here on this bar, and initiate the

position, right? So this is your point
entry number one, entry number two.

So from this perspective, from the
trading perspective, does it really

how we label it?

Probably no. As long as you could
understand that.

This is a part of the potential phase C,
therefore the beginning of the

potential upswing.

And, you know, you could definitely
define the points of entry here really

So it doesn't, at the end, it wouldn't
really matter, you know, whether you're

able to look like this, this, or this.

Okay. Okay, sounds good.

Thank you, Rama.

Thank you. Okay.

And then let's look at the last trading
range. This one is a little bit

difficult, so that's why I'm going to go
through this myself.

So we are having a downtrend, clearly
defined climactic action, clearly

change of character in the next rally.

It's the largest rally of all of the
rallies that we've seen on the downside.

So here is our automatic rally.

have multiple tests, one, two, three,
and then test number four on the

way down.

So it seems to me that this rally right
here has the largest rally of them

all. So this looks like one swing.

There are some things here that... So
therefore,

just to conclude the thought, this looks
like phase A.

In some instances, we would probably say
that this looks like a test of the

climactic action itself as well.

But let's just go with this label, phase
A. So then the next test, which is the

second test, happens in phase B.

And then the next test, somewhere in
this area, number three, that seems to

phase C.

So I think I would definitely accept
this type of labeling with kind of like

one exception, is that it seems that
phase A is somewhat larger than phase B.

And in some instances, guys,
unfortunately, it's not going to work

this, right? So sometimes the labeling
is just going to be a little bit out of

our usual.

rule interpretation.

And hopefully, you could think of the
trading

value here rather than, you know, more
of the label and style.

In some instances, we could label it
like this, and then that would extend

B. But again, for trading purposes, you
probably wouldn't care that much.

Actually, to be completely frank with
you, I still would be thinking that we

in phase B at this point.

And I would be thinking that we're going
to go and experience some kind of phase

C. But it doesn't happen.

So what do you do? Well, if you miss
this move to the upside and you are

realizing that this could be a sign of
strength, then you're waiting for what?

You're waiting for the backing up
action, which should come where?

It should come to the area of the
support that acted before as the

phases A and B.

So out of this touch and on the
reversal, that's

when you might be thinking, wow, if this
shows me that this is a point of entry,

we might have concluded already all of
the phases here. And this is phase D.

And therefore, you know, I should go in
into this position.

Granted, you're opening the position
much higher than, let's say, in phase C,

and that still acts as a reaccumulation
range for us.

But sometimes it's going to be hard to
define those phases, and there

is nothing wrong about this. It's just a
skill building, and sometimes

structures develop in a very... weird
way.

So you have to rely on concepts.

And what are the concepts here?

Well, here is one.

Here is this move to the upside that
commits significantly to the upside, has

multiple closes up, and then spends so
much time above.

What does that sound like?

Well, a sign of strength.

And then a reaction right into the
support.

What does that sound like? A backnap
action.

If this is true, then this is phase D.

And therefore, everything before that
was phase A, B, and C.

Okay, let's have a look at how I label
it.

Okay, so I put phase A here at this
test.

I'm thinking that still, you know, this
is phase A right here.

But let's just leave it as is.

Okay, let's see what kind of questions
we have.

Why is the trading range not defined by
the lowest point of the automatic

reaction? So we're talking about this
trading range right here.

So, well, we could label this as an
automatic reaction, secondary

test, and you could definitely have the
boundary at this level. Does it come

handy after this?

Not at all. And we're looking at the
chart that has already unfolded.

So it's a historical chart, right? So we
already know that the price only tests

this area right here and not this one.

And this leads us to the conclusion that
this was an extreme oversold condition.

In the extreme oversold condition, price
usually does not have a significant

test at the same level.

And the testing out of the extreme
oversold condition might happen at the

level. So therefore, what's the use of
having this line if the price does not

there? Only when it goes there, you
could just incorporate here.

What's more important at secondary test
low is being tested again in phase B and

then being tested again in phase C. So
that becomes a significant support.

Next question.

Do we care about daily big bull candle?

Okay, Eric, right here, this one.

Are we still on this trading range?

Okay, yes, of course.

We do care about that.

Okay. Eric, I'm confused.

Last look at the trading range at the
right. Okay, so which candle are we

talking about?

You have to give me a timestamp. I mean,
there are a lot of big candles here.

Okay, while you're thinking about this,
1991.

Okay, right here.

There are multiple big candles here,
probably.

Okay, let me just unmute you.

I don't kind of see that. Okay, so which
candle are we talking about, Eric?

Okay, Roman, do you hear me? Yes.

Okay, my question is why sign of week
instead

of spring?

Or in the phase...

Yeah, this is a mistake right here.
Okay, so if we're talking about phase C,

this should be a spring.

Oh, I know what happened. Okay, let me
just correct this.

I think this was a slide that I worked
on

afterward.

I defined phase C as this one right
here. So this becomes a sign of weakness

B, and then this is phase C. So that
makes sense. Okay.

Although, you know, I don't like that. I
don't like the phase A, phase B

definition here, but phase C could be
something like this, and then that would

make it a sign of weakness.

Right?

Eric?

Okay, great. I mute myself, sorry.

Okay, no worries.

Okay, next question.

How would we mark the small reaction
right after the buying climax in the

sloping trading range? Okay, so I think
that we're talking about the

distributional trading range.

Let's look at that.

how would we label this small reaction?

I don't think that we could label this
or we should label this, right? Because,

again, think about the swings in the
trading range, right? So we need to

labeling based on the beginning and the
end of the swing, right? So here's the

beginning of the swing. This is the
reversal.

This is the end of the swing. This is
the reversal area.

And that would define an automatic
reaction.

Do we have any reversals in this area?

I don't see one.

Do you?

It has to commute below the significant
bar to the upside.

So there is no reversal in this area. So
therefore, we could just say that this

is a buying climax.

Sometimes I see a labeling like this,
buying climax, automatic reaction.

Secondary test.

That doesn't necessarily make sense to
me. I would rather label it differently.

I would rather take this whole area
right here, and I would go into the

level, and there I would be thinking,
okay, buying climax, then automatic

reaction, secondary test, phase B, phase
C.

This becomes the distributional
structure with a small cause to push the

lower into this low.

So that would make sense to me. But it
wouldn't make sense to me at all to

this as an automatic reaction. Why?

Well, because an automatic reaction
should contain a change of character. Is

this a change of character?

No. This is in line with the previous
reaction that we see. A change of

character has come right here.

So therefore, just based on this, this
is going to be our automatic reaction.

All right, next one.

Okay, so that we've answered.

How to read Big Down Spread Candle in
early December of 1991.

Probably 1990, right? This one right
here. That comes from Nilesh.

Okay.

Well, this is just an ending of the
major sign of strength.

And that's it. That's how we would read
it. Obviously, we see that this is the

bar that has increased downspread.

So that suggests that the volume
signature increased here and therefore

coming in.

And usually, you know, at this point,
we're going to see some kind of short

-term overbought condition, which brings
mean reversion trade for the

professionals.

So that's where supply is coming from,
the increase of the supply.

Okay, next one from Lee.

Is the small rally in the middle of
December of 1990

making traders to enter prematurely
normally? Is there any

method that could use to avoid that?

Yeah, I think we've talked about this,
Lee.

Obviously, this breakout is being used
in a lot of methodologies to get into

position, and we see this gap that
suggests that we can.

buyers at this point of time.

So I'm not going to name the
methodologies, but you guys might know

talking about.

How to avoid this?

Well, you know, if you study Wyckoff
structure, you would be thinking of what

should come, let's say, after phase C, a
major sign of strength.

But the major sign of strength is going
to be followed by what? By a backing up

action. Where would it come to?

It usually would come to the area of the
support, which acted before as the

resistance. So therefore, when you have
an urge to open this position right

here, and you think that the bias is up,
think about the structure.

If you think that we are in phase D,
then you should be waiting for the

up action.

Another rule of thumb.

is more to the fact that

you want to open your position

after the reaction, not on the breakout.

There are only two spots on the breakout
where we want to open a breakout

position. Number one is right here. This
is going to be a sign of strength bar

point of entry.

And number two is on the breakout of the
backing up action.

And these two of the entry points, one
was defined in the course

by SMI. We've talked about this. And
then this one is just WTC

entry that I've originated for you guys.
And it makes a lot of sense to me

because... At this level, at this
breakout level, there is a lot of supply

is already gone. It's absorbed.

There is nothing left.

Okay, but Lee is actually talking about
this situation right here. So we have

a move to the downside, and then how
would we think about

the reversal, right? So it's all...

In the technique now, Lee.

So let's say that we know that this is a
major sign of strength.

Where should it come to? Should it come
to this level?

Should it come maybe to this level? So
we're still not necessarily close to

area. But let's say that we're not
paying attention to that.

Then what should we be paying attention
to?

Well, we need to pay attention to the
reversal itself.

Was this a reversal?

Well, it seems like it is a reversal for
maybe bars like this right here. It

seems like, yes, we reversed that area
right here. But are those significant

bars for us to the downside?

Probably not.

What is the significant bar to the
downside? Right here. Have we reversed

with this bar?

No.

We would have to overcome $2 here and
close above to reverse it. So therefore,

on this bar, especially the last bar.

Look at that gap, small spread,
diminishing spread after this bar.

So that doesn't really act a lot as a
confirmation of that reversal.

Plus, this bar right here most likely
has a volume increase, which suggests an

increase of the supply. So you don't
want to come into this position on that

type of bar.

Okay, we'll talk about the reversal
more, especially in practicum.

But there is no reversal here. But there
is a reversal right here.

Quite a lot of bars are reversing the
last commitment to the downside.

Okay.

All right. Let's go to the next chart.

How are we doing? Four o 'clock. Okay.

Let's talk about sprints.

Originally, Wyckoff did not have a
definition of a spring, if you can

this. The definition of the spring was
added later on by Bob Evans, who was the

apprentice of Wyckoff.

When Wyckoff passed in 1934, Bob Evans
inherited the

Stock Market Institute, and he produced
a number of

great material points.

about the methodology.

I think, you know, actually Bob Evans
was kind of like a godsend to the

methodology, for the methodology not to
die after the 1930s, 40s,

and to continue the studies.

And he added a lot to the material. One
of the additions was the definition of

the Supreme. Usually Wyckoff would...

refer to the sprint action as a shakeout
or a terminal shakeout.

Bob Evans added the definition of the
sprint, but he went even further than

this. He gave the definition, he defined
different types of sprints.

So let's look at those definitions.

The first type of sprint is sprint
number three.

This is probably the most favorable
sprint where there is just an attempt or

temporary price commitment below a
trading range support level.

So we kind of could see here how the
price commits to the downside, but it's

substantial.

And it happens on a relatively low
volume signature. So relative to

that we've seen before since Phase A
absorption here in Apple, we see that

is... one of the lowest supply
signatures.

And it only temporarily commits the next
day, comes back into the trading range.

So this is how spring number three would
look like. Spring number three, we

would buy on the return into the trading
range. So by itself, a return into the

trading range would be defined as the
first point of entry for us.

Spring number two is going to have the
same principle behind it, but

it's going to be associated more with
weak hands panic, mini panic rather,

where supply signature will increase and
therefore the volume signature overall

will increase, but it's not necessarily
going to be as high as phase A signature

or maybe phase B shakeout type of
reactions.

It also might have

a little bit more profound commitment to
the downside with multiple closes to

the downside usually maybe two or um you
know a more significant penetration

of the support so we could see both from
the price and the

supply signature that it's more
substantial but yet the um effect of

the spring is the same the price quickly
comes back into the trading range.

And we see that it was just an attempt
to commit to the downside and it failed.

So in a way, spring acts as a failed
signal.

And I mentioned to you guys before that
the failed signal in technical analysis

is one of the best signals.

Why? Well, because a failed signal
usually is gonna cause A lot of people,

weak hands, on the wrong side of the
trade, what you think they're going to

as the price comes back into the trading
range, they're going to try to close

this position, making it a market order
to

buy, which will push the price through
the trading range into the sign of

strength. And that's what we see here.

And then screen number one is something
that, I absolutely

don't like. I don't think it should be
in the methodology, but because it is,

you know, it's kind of like a legacy
concept, so I kind of have to teach it,

I'm obviously teaching it in my own way,
stating that it shouldn't be there.

Sprint number one is basically a failure
of a sprint to materialize.

and a price breakdown below a trading
level support on substantial volume,

that creates a sign of weakness in the
distribution.

So effectively, where sprint number one
is a sign of weakness in the

distribution, and therefore, could we
even discuss it here? Probably not. And

that's kind of like my thing about
sprint number one.

It should not be in the method. It
should not be discussed as a sprint. It

should not be discussed as part of the
potential accumulation structure.

All right. As usual, this slide is, you
know, for your homework.

Print it out. Put it into your library
of slides.

Study it. You know, look at the
examples.

Try to find sprints somewhere else on
other examples.

All right, let's go to the next slide.
And this one I'll do

by myself. This is an easy one, right?
So we have a climactic run. Again, look

at this reaction and then move to the
upside.

The question here, well, could we label
this as a bind climax, automatic rally,

secondary test that belongs to this
whole formation?

No, we can't. Why?

Well, because this reaction is in line
with previous reactions that we've seen

before. So therefore, this is not a
change of character.

And if it's not a change of character,
then this is probably just a small

distributional pattern that we see that
creates the causality to push the price

lower into the lows of a true change of
character.

This is the reaction that is nothing
like we've seen before on the way up. So

therefore, if this is a change of
character, then it's located between

the buying climax and automatic
reaction.

And therefore, we could label this area
as a buying climax trading range with

the characteristics of the climactic
run.

And then...

The first move to the downside, and
looking again historically at this

I would say that characteristics of this
move to the downside with the

increasing downspread and increasing
volume signature suggest

that this is more of the climactic
nature. This is more of the shakeout

nature. So I would label this as a
shakeout. The first reaction up.

rally.

Then look at the test, decreasing
spread, decreasing volume.

So that looks like a secondary test.
Therefore, phase A.

And then we're going into phase B and
into phase C.

Now, I always ask you guys a question.

What do you see? What catches your eye a
lot?

Well,

Couple of things that definitely catch
my eye.

The first one is the move to the
downside, the last move to the downside.

reminds me a lot of the initial move to
the downside because it has some kind of

fear built in. All of the previous
reactions, it seems like, yes, the price

down, but maybe not so much as on the
first and the last reaction right here.

Also, I'm looking at the character, and
I see that even though the distance to

the downside increases, the downspread
is actually

decreasing, especially in the second
portion of this decline.

So these are the possible
characteristics of Phase C. Okay, well,

double -check that this is Phase C?

Well, what comes next after Phase C?

a sign of strength, and a sign of
strength should show us the commitment

upside, excuse me, definitionally should
go, the sign of strength really

should start at the low phase C, go
through this whole trading range, commit

the upside, and then spend some time
above this resistance and then back up

exactly into the area of the support
which acted before the resistance.

We have all of those elements.

And if you are not sure whether this is
a major sign of strength or a

backing up action, then look at the
characteristics of the rise to the

Obviously, the largest rally is number
one. But look at the volume increase and

specifically demand increase behind this
rally.

So that looks very constructive. And
then the backing up action just

By the way, that question that Justin
had at the top of the hour, at the top

the class.

Could the backing up action only be on
the diminution volume signature, or

we have the increase of the volume
signature? Well, here it is, an increase

the volume signature, and the price
actually goes down. So we can't open

position here until we actually have the
test that exhibits

structural high or low.

and exhibits diminishing supply
signature right here.

So that would be our confirmation. Plus
it comes to the area of the resistance,

so just a really, really perfect blend
in there. So here is our labeling here.

C,

A, B, and then...

Phase C would be labeled just because
this is not the lowest low.

It's a higher low. We label it as the
last point of support.

Okay.

Here's my labeling. You could just go
through this labeling at home.

Okay, let's talk about upsloping and
downsloping ranges.

So students were asking me, what are the
rules as to how you create upsloping,

downsloping ranges?

I kind of explained to you guys how I
did this on the previous

slides.

That was my answer to Philip's question,
I believe.

So let's look really quickly at the
bottom chart.

And this is a downsloping reaccumulation
trading range.

So we're seeing the climactic run.

And then look at the downtrend. And look
at this rally right here. This rally

acts as a better rally than anything
else. So that's a change of character.

At this point of time, you would be
thinking we're going to be in the

trading range.

And we actually...

Apologies.

We actually see how the price finds the
support on the next low, tries to rally,

but not a lot of good demand.

So it starts to go down again, and this
is where supply and demand increase at

the same time.

But we're still deviating around the
mean in the same structure. So now the

structure has expanded because of this
low. So now we're still in the

We still would be thinking horizontal
structure.

But at the same time, we would be maybe
thinking we have lower highs,

we have lower lows.

This is the scenario where in this type
of trading range, with the lower highs,

lower lows, we might be considering a
downsloping structure.

So we would define the lows, one, two,
and then have this

downsloping line.

And then we could use significant Weike
points to define

next lines that we need to use, right?
So for instance, this was a very

important line.

So please note how both the sprain or
shakeout in phase C has

been defined by those lines. That's
number one. And how the sign of strength

the backing up action have been defined.

have been defined by this line.

Isn't it more effective from trading
point of view to take this trading range

trends? There is a substantial distance
travel.

If the goal, Philip, is to trade this
area right here, then yes,

definitely. You would be thinking
that...

This is a definition of the downtrend as
lower highs and lower lows unfold.

Unfortunately, in the context of a much
larger trend, this is just a

reaccumulation. And we don't necessarily
want to trade to the downside in the

reaccumulation. Unless, and just quickly
write down, you know, what is your

timeframe, you know, that you trade.

Unless you are a very, very short -term
oriented trader. So for instance, you

are maybe like two to three days in a
position, maybe a week.

Then you could say, okay, I see that we
have, let's say after phase B,

we come to the area of the support on
the climactic run, then on the retest

of that, and then it fails.

So here I could initiate the trade.

with the target zone somewhere here.

So then you could trade that.

And probably your first target and first
exit is going to be somewhere here, and

then the second target and second exit
is going to be somewhere here.

So from that perspective, you could do
this.

But we're looking at the overall
structure, right? So an overall

dictates that we are actually in the
reaccumulation.

And if this is a reaccumulation, we're
trying to define what kind of range we

have. Horizontal does not work that
well, but downsloping range works

well.

In the downsloping, upsloping range, one
of the confirmation that this works is

in the definition of the sign of
strength and sign of weakness.

We want to see the overcoming of the
resistance in the reaccumulation on the

sign of strength rally.

And then, a backing up action that comes
exactly to this area of the support,

which acted before as the resistance.

The same in the upsloping structure.

We would take the low in phase A,
connect it either to the low in phase B

phase C, in this case phase C, and then
use the parallel lines that we could

project from the automatic reaction and
the upthrust action.

And if we see that the rally off the
lows in phase C, overcomes those points

of resistance that were created in
phases A and B, and the price commits

spends time above that resistance, and
then backs down exactly to the area of

the support, then we would be thinking
that this is a confirmation of the sign

of strength, which is being shown to us
in the backing up action.

So the procedure is the same, right?

We're still going to be looking at
change of character, defining

the trading ranges, and then once we
start seeing higher highs,

higher lows for the upsloping range, or
lower highs, lower lows for the

downsloping range, that's when we'll
start projecting different

scenarios here for the structure.

And again, you could read all of this
right here and just go through all of

this. It just has more explanation, so
something for the homework.

All right, let's go to the next chart.

Okay, so this one is easy too, so let me
just go through this.

Kind of reminds me of...

Well, we've seen this, right? So we've
seen this. And here, the same, I think

this is the same slide, right?

The same trading range. You could use an
upsloping structure, but in this case,

I'm just using conventional horizontal
lines.

A downtrend, which leads to the
climactic action, well -defined on the

reaction to the downside with the price
and the volume increase signature.

So that's very evident.

Right away, we think what comes next, a
change of character or the automatic

reaction rally, and then it's being
followed by a secondary test.

Please note how in all of these
instances, secondary tests at the end of

reaction has this decreasing downspread
signature and also

decreasing volume signature or
decreasing supply signature.

test the supply level that was at the
climactic action, and we could see that

the test, there's really not a lot of
supply left.

And then a very common upthrust action
in phase B, which is

being followed by laborious decline into
phase C. And this laborious decline,

this is something that we like to see
going into phase C.

It suggests that Weak hands are selling,
but strong hands are already buying.

And that's why it becomes such a
laborious move to the upside.

We could see some buying behind the
volume signature.

And we're still seeing, you know, maybe
like a slight deterioration of the

supply going into potential phase C.

It creates a higher low, which suggests
that the downward result is diminished

significantly.

And with that, we're thinking that the
bias is going to be to the upside.

I would probably put the boundary for
phase C somewhere here.

Why here? Well, because there are
multiple tests in phase B that are being

violated in this area. So this is the
first time where those tests are

happening. So therefore, with the
intention behind... phase c to test to

produce that final test at the point of
the support we have seen

that the support in phase b is somewhere
here so we're trying to identify the

boundaries as that initial test of that
support so therefore your boundary is

going to be there the next rally is very
evident it commits above

any of the levels of the resistance so
therefore uh it's a major sign of

strength and then we're seeing you know
an accumulation range again here we

would be thinking phase c sign of
strength uh lps so backing up action at

point um phase a phase b up thrust
action so

everything looks to be normal and then

Phase D is going to conclude, of the
larger range, is going to be concluded

you know, phase D of the smaller range.
So let's have a look.

All right. And what else could we
mention here?

Okay, so a question from Ronnie. If A is
point number one and phase

C is point number three, What did you
find as point number two on slide number

five?

Okay, so A is

test number one,

right? Test number one.

And then phase C is test number three.

Then where is our test number two? Well,
all of those tests.

right here in phase b those are number
two tests so again think in terms of

the texture right so here is texture
number one in phase a

then we have a texture um in phase c
which is basically a trading

range of its own we have a selling
climax automatic rally secondary test

up thrust action and then its own phase
C. So this looks like its own formation.

And then what remains?

Well, it seems like these three spots
remain.

And they look the same.

Why? Well, because the reactions to
these lows look somewhat the same.

They are in the context of the uptrend,
short -term uptrend that we see as well.

and then belong to the same phase.

So this is just a series of multiple
tests, a multiple test

number two in phase B.

By the way, guys, think about this.

If you are observing this type of the
behavior in phase B, what could

we conclude about the bias of this
formation?

Well, it's probably going to be to the
upside. Why?

Well, look at how the tests in phase B
are happening at the higher lows.

Because it happens at the higher lows,
this is a point of strength.

Why is this a point of strength?

Well, think about the institutions here,
right? So someone's selling, but then

someone's coming in and still produces
some buys.

So institutions are buyers in phase B

at higher lows.

This suggests strength.

And even though phase C actually
violates those lows, it just

gives us an indication that whatever
institutions bought at this point of

on those lows, they are... they are in
the vicinity of those large institutions

that were biased on the way down right
here and here. And by the way, if we

would look at the value zone, right? So
look at this value zone right here.

It's right in this area where we saw
some buying before.

This becomes just an extreme oversold.

And then, again, once the price comes
back to the value zone, again, we're

seeing a lot of buying at the same
price.

And all of the springs that happen, like
this spring right here, below this

value zone, happens really fast, commits
to the downside, and then recovers

fast. So all of the elements of
institutional buying at the specific

value.

Okay, great.

Let's talk about the sign of strength.

So I've already mentioned it many times
today.

Sign of strength, the definition of the
sign of strength. And this is something

that I want you to definitely remember.

And a little bit of history as to how
this definition comes about.

So I put here pure Romanism, so this
means that it comes from me.

The problem with the sign of strength in
the methodology was that it was defined

as a sign of strength was defined as a
sign of strength bar.

And usually when I would ask a student
to define a sign of strength,

they would usually say, well, it's a bar
that has an

increasing spread to the upside and
increasing volume signature.

And that was kind of like a definition
for the sign of strength. Well, first of

all, that's not necessarily a definition
of a sign of strength.

It could be even a definition of a sign
of strength bar.

It's a characteristic.

We know that the characteristics of the
sign of strength bar are going to be

exactly that, increasing upspread and
increasing volume signature.

But it's not necessarily a definition
for a sign of strength rally.

So let's look at this. A sign of
strength bar is going to be this, right?

that is increasing in spread and
increasing in the

volume signature.

This bar does not qualify as a sign of
strength rally.

A sign of strength rally definition is
going to be a rally that travels off the

lows in phase C throughout the whole
range that commits above the area of the

resistance that was created by phases A
and B. So we see that commitment right

here. That spends time above that area
or in this area.

And then that has a backing up action.

that comes exactly to the area of the
support that

acted before as the resistance and was
created in phases A and B.

And that's the definition of the sign of
strength, rally.

So this I definitely want you to
remember because I will be asking you

times, what is the definition of the
sign of strength?

What is the definition of the upthrust?

And you should remember this by heart.

All right.

What else? So a big difference between a
sign of strength and a sign of rally

and a sign of strength bar.

So in all of the cases, what we're
looking for is the commitment, right? So

commitment to the upside if this is a
sign of strength.

Off the lows in phase C.

through the trading range, commitment to
the upside, and then a backing up

action that comes exactly to the area of
the support that acted before

as the resistance.

All right, great.

Okay, so this one is interesting. So
let's have a volunteer just say yes, and

I'll unmute you.

And especially the first trading range.

I wonder, guys, how you would be looking
at that, how you would define that.

Okay, so volunteer.

No volunteers.

All right, Nilesh. Okay, let's go to
you.

How are you doing?

Say again your name so that I would
pronounce it correctly.

Nilesh. Nilesh. Okay, great.

Okay, so Nilesh, trading range number
one, how would we label it? What catches

your eye?

So beginning of September, that seems to
me like a ceiling climax.

Price tried to go down.

Price first goes up.

Right. So what is this initial move to
the upside then?

That's the automatic reaction.

And then it's kind of combined into a
single bar, I would say.

The selling climax as well as the
automatic reaction happened kind of on

same day. That's how I think I would
interpret that.

Yes, that's totally correct. The same
day exhibits both.

Selling climax and automatic rally.

Okay. So then the next reaction and the
next low as a high low could be labeled

as? Secondary test.

And that defines?

Phase A.

Phase A. The intention of phase A is?

Stopping action.

Stopping action. Great. What are we
stopping?

The downward movement.

Okay. Great. So now that we've stopped
that.

Now we could define the resistance and
the support.

So we always will start with the
horizontal range.

And that's my suggestion to all of you.
Sometimes, you know, I hear questions

that, when do we start, you know,
putting the down slope and up slope and

resistance and support?

Well, initially...

always, always put the horizontal
boundaries first for the range. This is

the majority of the time the price would
spend.

And then once you start seeing lower
lows or higher highs, that's when you

go in and establish, you know, more of
the downsloping.

Okay, so what is next? What catches your
eye next in this trading range?

Right. Then in phase B, there are series
of secondary tests.

Is phase B the most exciting to you as
you look at this chart?

Or are you just going sequentially?

Yeah, I was just going sequentially.

Yeah, so let's just pay attention to the
question itself.

What catches your eye and not
necessarily what comes next?

The downward movement, right, which
happened.

around the phase C test, right?

Around October, right?

Yeah, the downward reaction and then the
test that happened around

October. So how do we label this whole
thing here?

That would be phase C.

Okay, phase C. And how would we label
this price action in phase C?

Spring.

Yeah, it could be a spring.

Obviously, it has all of those
characteristics of the spring where

attempt to commit and then the recovery,
quick recovery.

My only hesitation here is the volume
signature, so such a big increase in the

volume signature.

So this also could suggest that it could
be labeled also as a potential

shakeout.

especially if you're using the
horizontal range, then somebody might

yeah, I see a lot of volume. I see a lot
of, you know, penetration below the

support area.

I think spring is better here at this
spot just because we don't see, you

big commitments to the downside in this
phase C. All right. So if this is a

spring or a shakeout, then what comes
next after, you know, after phase C?

Sign of strength rally.

Okay. Yeah, that's the one. And then we
have a backing up action.

Okay, great. And then everything in
between C and A is B.

And this attempt to overcome the
resistance and commit to the upside with

return into the trading range, we would
label as?

Up thrust in phase B.

Up thrust action in phase B.

Okay, great.

So here is our whole labeling.

One of the things here was the
horizontal range. If we're thinking that

it, look at the sign of strength, how it
comes to the point of the resistance,

and it doesn't overcome it. So if you're
using the horizontal range, then

it's going to be really difficult to...

contemplate about this at this spot.

Why is it failing at the point of the
resistance?

Is this a sign of weakness by itself?

That failure.

But if you're using a downsloping
picture, then a downsloping

range, then you can clearly see that
there is a commitment to the upside.

And more importantly, as this commitment
develops as a sign of strength rally,

there is a backup.

into the support that acted before as a
point of resistance.

So that confirms structurally that
indeed this was a sign of strength in

backing up action. And therefore, this
is phase C and this is phase D.

And if you missed your entry on this
spring, or let's say on the sign of

strength bar, then you could definitely
enter somewhere here in this area.

on the smaller back and up action that
belongs to this whole range.

All right, great.

Let's go to the second trading range.

And Nilesh, let's start with phase A.

Sure, that would be buying climax where
your pointer is.

And the downward reaction would be
automatic reaction.

And then we have a second test.

That would be phase A.

Okay.

And then we, in phase, okay, then phase
B, again, we are testing the same.

There is one upthrust action in phase B
that I see.

And in phase C, Where is phase C?

In August, after August, August 9, I
guess, somewhere around that, yeah,

where we are testing the freeze B lows
for the last time.

Excellent.

And that's, yeah, I do see an increase
in volume

there, but I think the downward spread
is lower there, and we do not reach

earlier supports as well. So that's the
point.

Still high or low relative to the lows
in phase A.

Right. Then we have a sign of strength
rally but which

it goes to the buying climax but not
really crossing the upthrust

action that we had in phase B until
later in October.

Think about the definition of the sign
of strength.

We said that a sign of strength should
rally off the lows in

phase C, go through the whole range,
commit to the upside. So all of this

rallies right here, those are kind of
like minor signs of strength, right? So

they're still in the trading range. They
have not overcome all of these points

of the resistance that we have in phases
A and B.

Therefore, you're looking for the
commitment that is above all of the

lines. Where is it? Somewhere here.

You also want to see that the price
consolidates, spends time above that

push up, and then comes and backs up
exactly to the area of the support that

acted before as the resistance.

Therefore, a sign of strength in the
backing up action.

has been shown to us here and therefore
they belong to phase d okay great um

i have one question um uh so in this
whole structure

right what would be as in where would
you think about opening uh position

it be in uh buying backing backing up
action only or are there any other

interesting uh

where you see the signs of upward
reversal.

Okay,

so in other words, where would we be
opening positions, right? Am I correct?

Yes. All right, great, great question.
Thank you, Nilesh, and I'm going to mute

you.

Okay, so one of the things here right
away, and we'll come back to this

in a second, climactic run is very well
defined.

So there is a climactic volume here. A
climactic volume does not necessarily

have to come on the last bar.

It has to come on the last rally,
though, and be a part of that rally.

But we clearly see that there is a
momentum move, there is a vertical

on the way up, and then there is a
climactic run, which is being concluded

followed by a change of character.

And I'm looking at the next reaction to
the downside, and this looks to me like

a test.

So I'm starting to think that, hmm,
could I label it in a slightly different

way? Remember how we said that sometimes
we could label a reaccumulation as it

starts up to the backing up action as a
shakeout that is being followed just

like a regular.

accumulation labeling, automatic rally,
and secondary test.

So I think this is appropriate here.

Bind climax, a shakeout type of action
on the increased volume signature, and

doesn't really behave as a pronounced
move to the downside. So right here,

on that, where we see that the distance
covered by the rally

and then the distance covered by the
shakeouts are just so different. The

shakeout is much, much smaller than the
distance to the upside.

So therefore,

and with the volume signature, we're
thinking, okay, maybe like a temporary

shakeout. If this is a shakeout, then
the next thing that we're experiencing

automatic rally, secondary test, phase
A.

And we kind of see that the texture of
phase A is

congruent with all of these thoughts
that I just went through, right? So

it seems like all of these tests belong
to each other, these two

reactions. The second reaction is just a
test of the first reaction.

So that suggests phase A.

Then we see that in...

Phase C reaction, you know, this is a
different texture. This is a different

test. And it looks so different than
phase A. It also looks different than

B. Because as we look at phase B, this
is the texture.

It's kind of like this laborious move to
the downside where there's selling,

selling, selling, selling, selling,
selling.

And yet there is no way that the price
can commit below.

the lows in phase A.

So that's number one.

Let's come back to the question by Neil
Ash that was about the points of entry.

So in my trading, I probably would be
thinking that after the upthrust action

phase B, the move to the downside is
actually that move into phase C.

So I would be thinking of interpreting
this trading range, thinking that this

phase C.

minor sign of strength, maybe major sign
of strength right here in the backing

up action. So there's an entry somewhere
here.

The exit out of this position could be
here or on the failure of the support

right here. So you probably would be
ending up with, you know, just a small

Small win, break even, small loss.

And that would be your trade number one.

And again, I'm not shying away out

of this type of opportunities, out of
this type of trade.

Because I don't necessarily know 100 %
that this is going to be phase C.

I mean, we could go into much deeper
analysis and figure out why it wasn't

C.

At the same time, in a lot of cases, we
just don't see that until it actually

happens.

Plus, the character of the move to the
upside was actually somewhat okay.

So therefore, after this first trade, if
we're still thinking that this is

the bias to the upside and we're
defining phase C on the next reaction,

Our entry is going to be somewhere here.

That's entry number one. Our second
entry out of the reversal of the LPS.

So that's entry number two.

We don't necessarily want to enter
somewhere here. Why? Because we don't

the next reaction is going to be such
that would take us out and hit

our stop loss. So we would just
patiently wait until they're backing up.

after the sign of strength forms, and we
would enter somewhere here. So this

would be our third point of entry. So we
would be entering here, here, and then

here. And prior to that, we entered
here, and we exited here, and here.

All right, let's see some questions.

Could you start back?

in July with buying climax.

Philip, are we discussing the same
trading range? It's probably somewhere

right? So could we start back with July
with buying climax? Okay, yeah, buying

climax.

So we have a small distribution range
that produces the cause

for this low.

This low here is a trading range by
itself.

It starts here. So here is selling
climax, automatic reaction, secondary

somewhere here, which is hidden, sign of
weakness in phase B, upthrust in phase

C,

everything in between is B, and then a
move to the downside.

Selling climax, automatic reaction,
secondary test, phase A, and so on and

forth.

We didn't go through this structure. We
just went into this structure because

that was the assignment. But here it is.

All right, next question.

Big volume on a spring is bullish or
bearish indicator or none?

So I'm still thinking that this is the
case. Actually, in both cases, the

significantly increases.

Now, we will study this in more detail.

literally like in a couple of sessions
but you know it's so

funny how on the same slide we have two
different variations the first variation

is kind of like a more normal volume
signature where we have an increase in

of the supply in phase a and then we
have um a decrease

of the supply into phase b and then a
local

increase of the supply from phase B to
C, and long -term

decrease of the supply from phase A to
C, and

here from B to C.

In the first instance, the volume
signature is different. We see that from

A going into phase C, we actually have
an increase in the supply signature.

And in both cases, we would be thinking
about what? We would be thinking about

the result. What is the result of this
whole thing? If the supply increases, do

we produce a significant commitment to
the downside? And we see that there are

attempts to commit, but there is no
actual commitment below the support

The same here.

There is an attempt to commit, but yet
it doesn't. It only springs below the

lows in phase B.

So in both cases, result is very crucial
for us to identify, and then volume

acts more as a confirmation of
institutional presence at this spot.

And the way how we would be thinking
about institutional presence is While

are here, so what is happening on this
increased volume signature?

Well, the price tries to go down to the
downside and then recovers. Tries to go

down and then recovers. So, therefore,
that volume signature suggests

participation of institutions.

And what do they do? They abide at that
point.

So, therefore, they abide to the upside.

Good questions today.

I wish I would feel better a little bit.

And maybe we could just like even go
into more explanation of this.

Okay.

Is the first trillion range an
accumulation?

Well, again, you have to think about the
context of everything what

is happening here.

So this acts as a reaccumulation.

This acts as a reaccumulation as well.

The definition of the reaccumulation,
move to the upside.

Consolidation, move to the upside.

Consolidation, move to the upside. So
both are reaccumulation ranges.

Is August 23rd of 1999 also a sign of
strength?

this rally right here. Well, we could
kind of think that, yes, there is

definitely like this major sign of
strength commitment to the upside.

But I probably would be just thinking
that, you know, what kind of value it

gives us.

Probably none.

The fact that the trading range, the
second trading range just rests above

the buying climax here suggests

Strength suggests bias to the upside.

But I wouldn't be labeling this whole
move as a major sign of strength.

I would probably be thinking more about
this area right here as a sign of

strength in the backing up action. But I
kind of see the logic of why you would

think so.

All right, great.

So here is my labeling here. You could
go through this.

as you do your homework.

Let's talk about shakeouts and sprint
-type actions.

So we've discussed sprints, and I
mentioned to you guys that Wyckoff

did not have a definition of a sprint.
What he had is the definition of a

shakeout or a terminal shakeout.

And a definition of a shakeout is going
to be

basically a difference between a
shakeout and a spring.

So we said that the spring is either an
attempt or a temporary commitment below

the support level.

Shakeout is much more than that.

And I want you just to, on a very
simplistic level, to think about the

is it's like a very, very deep spring.

So it's a pronounced price commitment
below levels of the support.

Look at how many closes we have below
here.

Quite a few.

And distance -wise, it traveled.

So we also would like to see a much
better volume signature here, so

more of the increase.

And the reason why the volume signature
here is not that significant is just

because it's actually a down -floating
range.

And I've used this example in the
previous slide. So it acts actually more

spring in the downsloping range than a
shakeout. But in the horizontal range,

you definitely are going to recognize
this as a shakeout. And this would be a

more conventional way of thinking about
this concept and specifically thinking

about this training range formation.

What's kind of like the confirmation or
the tactics for the shakeout?

Well, with the shakeout as well as
spring number two, our

points of entry are always going to be
on the test.

Think about this for a second.

Why do we need the test for spring
number two and the shakeout?

Well, because both are going to be
associated with the increased supply

signature.

And if supply is increasing, we always
want to have some kind of test.

And this test always should come as a
high or low and on the diminished supply

signature. That way it would be a
successful test.

So where is that test?

Well, it's a little bit hidden right
here behind these bars.

And actually supply does come in again
and being observed at the same time. So

this acts actually as a very good sign.

And we understand why this happens.

It just happens before the earnings
catalyst.

So that's why some volume signature
comes, supply comes, there is a lot of

before the earnings, and then, you know,
the price jumps.

Okay, let's talk about...

screen type action.

So what is the screen type action? So
sometimes I would say, oh, look at this

upthrust action, right? So in the
reaccumulation, an attempt to commit to

offsite with the subsequent failure is
going to be labeled as an upthrust

action.

So it looks like an upthrust, but in the
reaccumulation, We know that we usually

don't use upthrust as a definition, but
it's there.

It looks like an upthrust. It acts like
an upthrust. It is an upthrust only in

the accumulation, so therefore we will
say upthrust action. It acts like an

upthrust.

The same with the spring.

We could see in the distributional
structure that in some instances a sign

weakness could be

interpreted as a sprint.

It would have the same characteristics
where supply is diminishing going into

the sprint, where the commitment below
the support is going to be just

and just so perfect how it just sprints
like this and then came back the

next day with the gap up.

So educators like Gary Fuller, David
Wise, uh gary dayton they would be

talking about this as a spring and
rightfully so it it is a spring it acts

spring but to be more accurate let's
just uh define it as a spring type

just because we know what has happened
next uh the price went up and then went

down so we're seeing that this is not an
accumulation or reaccumulation and that

this is a distribution and once
everything unfolded we know that um

this type of action before phase c is
going to be a sign of weakness in phase

so and therefore we would just look at
this and we would call it a spring

type action which is actually a sign of
weakness all right

let's go to the next

By the way, were there any other
questions on the web?

No, no, we went through this. Okay,
great.

Let's talk about distribution.

Let's talk about events and distinction.
So we went through accumulation,

the definition of accumulation.

Actually, guys, let me take, like,

a one -minute break here at this point,
and I'll be back in a second. Hold on a

second before we go into this new
material.

All right.

I'm back.

So let's talk to our organization about
a distribution.

So what is happening in the
distribution? How does sentiment change

whole trading range? What do
institutional hands and weak hands are

How do they behave?

Well, it's all being, of course, driven
by institutional activity.

So we are in the uptrend, and then
suddenly we reach some kind of point of

for them.

And in some instances, this value is
going to be defined also as an

condition. You're going to have some
overthrows in this area in the major

uptrend. And this is where this type of
condition creates a

very... bullish uh weak hands sentiment

and with this very bullish um we can

sentiment that produces liquidity

availability which

basically

suggest that institutions could sell
into

weak hands' strength.

And in a lot of cases, that selling
starts on the way up.

And you could sometimes see how the
price goes up, stops, goes up, stops,

up, stops, and then produces a big
change of character.

So usually these spots are going to be
associated with the tremendous increase

in the supply.

But yet because this is just initial
selling, it's not going

to produce a big downward result.

And therefore it's hidden from us like
that. And only a trained eye could see

that. And we'll definitely go through
that, you know, especially in the second

month when we will be discussing, you
know, supply signature, demand

So we'll go through that.

But this is the initial place where
institutions are going to unload their

position or close out, you know, some of
it, scale out.

And this area right here will be defined
as a buying climax.

It doesn't necessarily have to be like a
climactic run.

It could be even a trading range. There
are so many ways of how buying climax

could unfold.

But buying climax is going to be
associated with the first attempts by

institutions to sell their position, to
distribute to the strength of weak

hands. And this is where weak hands are
going to be extremely excited.

Weekends are going to be correct on the
buys and correct on their timing in the

last portion of the uptrend. This is
where they're going to enjoy all of the

profits to the upside.

You hear usually a lot of stories from
weekends where they're saying, like, I

made so much money.

And that usually happens on the
climactic run. Think about 2017.

The last two quarters from summer into
the junior year of

2018. That was the market where we had
that climactic run.

And this is where we heard a lot of the
great stories about how big

money were made on the way up.

Then comes the change of character.

That change of character is going to be
very somewhat...

sudden because here institutions are
selling as well and

now instead of selling and no downward

result in this case on the change of
character they will be selling

and there will be an increase in the
downward result for the first time

and that's what is going to define a
change of character.

So behavior has changed for the
institutions. And not only that, but the

follows now that behavior in the
direction of the institutional force.

And that's what produces that change of
character. A change of character low is

going to be defined as an automatic
reaction.

And that would define the boundary of
the trading range.

If anything, this is just such a great
concept, I thought, that Wyckoff has

up with.

A trading race.

Future price action is going to be
condensed between the

boundaries of the resistance and the
support.

This is where the majority of the time
the price will be, between these two

lines.

Once we define the boundary of the
trading range, the next action for us is

retest, a secondary test. Now, think
about this.

At this point of time, at the automatic
reaction, there is some kind of short

-term value proposition because the
price went down.

As the price goes down, there is some
short -term value.

Who's going to take this?

Who is the buyer here?

Well, institutions have been selling
into the strength of

weak hands. They've been selling on the
change of character as well.

So would they be buyers?

Now, we were taught that you know,
institutions might actually be buyers at

spot.

I doubt that strong -hand institutions
would be buyers at this spot.

Why would they be?

There is no logic in this whatsoever
that they would be buyers here.

Only institutions that are weak hands,
that are seeing some kind of value for

them, they could be buyers.

And if it's a reaccumulation zone, then
they would, you know, strong

institutional hands would be biased as
well.

But I don't see how weak

hands, institutional hands would be
biased, I'm sorry, would be, strong

institutional hands would be biased on
the change of character law in the

distributional formation.

Their goal and intention at this point
is just to scale out, to sell.

So no buying by strong hands. So weak
hands are going to be buyers here.

And that's what's going to lead to this
next weak rally, which is going to be a

secondary test.

And that would conclude phase A.

The intention behind phase A is the same
in distribution as is in the

accumulation.

It's to stop. To stop what? To stop the
previous move from going further up. So

we're stopping an uptrend.

And all of the elements, including the
preliminary supply, where the first

selling might come, buying climates,
automatic reaction, and secondary tasks

going to be a part of phase A.

As weak hands are buying on the way up,
imagine what happens to them on the next

reaction.

They're basically saying, this is
probably a wrong position for me to be

And it's going to get them out of this
position, maybe on the sign of weakness,

maybe on the secondary test just because
there was a reaction and they were

expecting more of the move to the
upside.

So they would get out of this position
and as they get out,

that could produce that sign of weakness
that, again, could produce some kind of

short -term value.

The short -term value could finally be
picked up by some of the institutions

that are going to be, again, weak hands
at this point of time.

And that absorption of the supply at
this low is going to push into the next

high. And as weak hands, like public
weak hands are not participating in this

rally, they are regretting that they did
not participate.

So what do they do? On the next
reaction, they are coming in here and

initiating the position.

So weak hands prime.

And at this point, strong hands such as
selling, selling, selling, selling.

And they try to sell at the upper
boundary of the range.

If they were accumulating the stock, the
shares, in the lower boundary during

accumulation, in the distribution, they
will always try to be effective with

their selling and to sell at the most
optimal price, meaning that that price

going to be, sell price is going to be
in the upper part of the trading range.

And, of course, depending on how the
market reacts to that selling. So if the

market still wants the shares, that
selling in the upper part of the trading

range is very easy for institutions.

But if the weak hands are less willing
to buy the

stock, then most likely it's going to be
much harder for institutions to

sell. in the upper part of the trading
range. And they would have to push the

price lower. So sometimes weaker
structures are going to have structures

deteriorating structures with the lower
highs and lower lows.

It's just institutions can't really sell
everything right away. So they sell and

then they allow the price to go up. Then
they sell.

The price goes below the low, creates a
low, low. So they know that, you know,

whatever supply they provided them to
the market, it tanks the market. So they

need to be careful as to how they sell.

So next time the rally goes up, they're
trying to sell maybe less. And then on

the way out, they just get through it,
their position, and just sell

And that produces the gaps.

On the way out, you know, a big spread.

Well, if the weekends...

got into this position again.

So this is the second time when they
bought.

And they're really enjoying the upthrust
because upthrust is going to have a lot

of characteristics of a sign of
strength.

This is where the spread might be
increasing to the upside.

There might be increasing volume as the
rally unfolds. And then as the price

commits to the new level, this is the...

becomes the second point of excitement
for weak hands.

What is the first point of excitement?

Well, we said that it was a climactic
wrap.

These are the two spots where weak hands
are going to be excited about their

position, so therefore they're going to
provide more liquidity to strong hands,

institutional hands.

to sell into.

So we often see that in this area, we're
going to see either one bar or several

bars with the increased volume signature
that suggests the presence of supply.

And as it fails, this is the first time
where weekends are going to say, I'm not

selling.

Why? Why are they not selling at this
point?

Well, because...

Finally, they realize that they have to
be disciplined.

But unfortunately, they get disciplined
at the wrong time.

And this whole weak hands, strong hands,
you know, weak hands usually defined

not just by the incorrect bias.

Their actions are defined by incorrect
timing as well.

And that's kind of like the case here.
So they want to be disciplined and they

say, every time I entered this position,
the price went down

and then the price went up.

So now that the price goes down, I'm not
going to sell this position because I

know that the price will go up again and
it will rebound.

And it would rebound in the
reaccumulation.

And unfortunately, if it happens to them
in the reaccumulation, imagine the

emotional confirmation that they get
from that rebound.

The rebound is basically just saying,
yeah, you should be doing this all the

time. And that's how they would be
functioning.

So at this point of time, they do not
give up on their position, whereas

institutions are selling into that
strength.

There is really not a lot of...

strength just because not a lot of bias
on the last point of supply rally.

And the stock or the shares are in weak
hands.

Therefore, this rally is going to be
mostly flat or it's just going to

some kind of momentum to the upside and
then it's just going to come down and

then tank.

Imagine what we can do next.

As they hold on to their position and
the price goes and breaks below the

support, what do you think is going to
happen here?

Well, at this point of time, there is
too much of the emotional pain.

that weak hands are going to have. And
by the way, again, weak hands, not just

public, institutions plus public

and institutions

on the wrong side of the trade.

And when they see that the price goes
down, they just basically emotionally

capitulate and they say, get me out at
any price that's what produces this big

move to the downside usually once the
price comes out of the distributional

formation we could see a lot of gaps to
the downside that are significant gaps

we could see big spread increase to the
downside that are going to be extremely

big and extremely significant spreads to
the downside and that's where we

know that

There is a capitulation that is
happening on the way down.

All right.

As in the accumulation, we would be
using

Y -cap events to define phases.

We've talked about phase A and all of
the events there. And it's kind of like

mirror image of the accumulation.

So we have a preliminary supply instead
of preliminary support, buying climax

instead of selling climax, automatic
reaction instead of automatic rally, and

then secondary test is going to be the
same.

Then the labeling changes.

We still would be thinking phase B as
the test of the support and the

resistance.

test that the support is a low low then
we're going to label it a secondary test

as a sign of weakness in phase b high
low is going to be just a secondary test

and then excuse me a lower high

in phase b is going to be labeled as an
attempt to up thrust

and um A higher high is

going to be an upthrust.

So these are the label and definitions
in phase B.

And then phase C is going to be our
final test

of the demand, right? So in
accumulation, final test of the supply.

Here, a final test of the demand in the
distribution.

And it's also going to have either a
higher high, which will be labeled as an

upthrust after distribution.

Why after distribution?

Because if this is a distribution, the
thought here in the methodology was that

distribution has already happened by
that time. By the time the upthrust

in phase B, distribution is done.

This is, again, not necessarily correct.

And the method requires a lot of
corrections and adjustments, and this is

I'm... kind of trying to do with this
course. It's just to put everything on

the correct path.

So, distribution

still

could be happening.

on the way down, even in phase D. There
might be some selling on the way down.

Distribution could happen even on the
way down in phase E.

Institutions can still be in the mode of
selling.

So, to me, this is definitionally not
necessarily the best semantic after

distribution.

I would say that maybe this is a
distributional upthrust.

That's what I would... probably say like
DUT, something like that.

Up for us after distribution could be
also be tied with tests or multiple

tests that come and, you know, test that
attempt to go up.

And then a lower high in phase C will be
labeled as a last point of supply.

And then we are experiencing a change of
character.

The next reaction is going to be the
largest reaction in the trading range,

which defines that the behavior has
changed, and therefore a change of

is underway.

The change of character is going to be
confirmed by the last point of supply

rally, which usually is going to be a
week.

After this rally, this is where the
capitulation is going to happen as the

commits to the downside.

Intentions behind phases in distribution
are the same as in the accumulation.

Phase A, as I mentioned, is a stopping
action of the uptrend. Phase B is a

cost building, and this phase defines
the relationship between supply and

demand. Phase C is the final test of the
demand at the resistance level.

Phase D is the initial markdown within
the trading range, whereas phase E is

going to be the markdown outside of the
trading range.

As usual, I'm giving you the definitions
and the characteristics of all of these

Wyckoff events in the distribution
range.

This is something that I want you to
print out.

to have to have it in your library uh
and to study as a homework assignment

and obviously to remember those
characteristics and remember this

usually when we don't remember the
sequence you know of all of the labeling

events that are happening this is where
we are starting to make mistakes

and this is where I see how the students
may be not understanding the material.

So please make sure that you go through
this slide and study and remember

characteristics by heart.

Okay, let's look at some variations of
the distributional patterns.

So a conventional distributional trading
range would look something like

this. where we see a horizontal
structure and we could have maybe some

higher high into phase C, maybe a lower
high, you know, where we would have like

a last point of supply type of
situation.

But predominantly, the price would be
consolidating within the boundaries of

support and the resistance that were
created by the bionic climax and

reaction in phase A.

A more alternative schematics and
labeling

could include a leadership, a
distribution of

the leadership stock or a leadership
instrument. It's usually going to be

associated with a very

unwilling change in sentiment by market
participants in this structure.

It has been a leader on the way up, and
it still could act as a leadership. And

the 2018 market in the US is a prime
example of that,

where we did have a change of character,
and yet we had an upthrust

into the climactic high. It more reminds
us of the...

of this schematic right here which also
defines a distribution of the leadership

stock where buying climax is being
followed by a shakeout type of

action then we have a reaccumulation
type of structure that leads us to the

thrust formation and then we have a
downturn now in this market what's

kind of like very very interesting about
this market is that As it went down,

it recovered really fast.

So therefore, what are we thinking here
with this recovery?

Why did it recover so fast?

Well, it only could recover under one
condition, where in the oversold

condition, we have some kind of value
for institutions.

If there is some value for the
institutions, what does it mean for the

Well, the long -term buyers, as they see
it, is still up.

So therefore, I'm thinking that this
whole formation that we're in right now,

probably just a long -term
reaccumulation.

And probably this rally will conclude
with some kind of reaction and then a

consolidation that's going to lead to
potentially next move to the upside.

This type of scenario could only be
negated when we would see maybe a

that's going to bring us to the lows,
and then the subsequent rallies are

to be so weak that we're just going to
collapse after those. So it's going to

be interesting to look at the next
reaction because next reaction is going

define a lot of the structure that's
going to come next.

But this is something that if you want
to hear more on.

you could join us for our Wednesday
class, Wyckoff Market Discussion.

So two types of leadership
distributional patterns.

And then we go into something very, very
unique.

Both of these patterns, so number three
and number five,

are... of the same family, and they are
called tipi

formations or tipi family.

So what is tipi by itself?

Well, it was taken from the Indian hut
look.

This is how it looks. So there is a move
up, and then there is a quick move

down, speculation on the way up, and
then urgent selling on the way down.

Why is it so? Well, because there is
just like not even extreme, double

extreme overbought condition on the way
up.

Basically a pure speculation.

And you've seen this in the Bitcoin just
recently.

You've seen this in the Chinese market
in 2015.

so many other examples that we could
observe.

In this hypodermic formation, and this
is the biggest difference between, let's

say, hypodermic formation than anything
else that we see here on this slide,

the phases are going to collapse.

And the duration of the phases is

going to shorten.

So therefore,

our phase B is going to be short, and
it's going to be in line

as phase A and phase C.

Usually, we would like to see phase B as
one of the biggest phases, right?

Look at all of the schematics. Phase B
is quite substantial.

But in the case of the hypodermic
distribution, this is where...

There's going to be collapse in duration
for phases. Why does this happen?

Well, because of the extreme value that
institutions

are getting and extreme profitability
that they have.

They don't want to wait and distribute
the stock throughout the horizontal

formation and take time to do that. They
basically say, get me out

now.

And I don't care at what price.

So they're going to sell, sell, sell on
the way down. And they're just going to

take the profits, you know, whatever
profits they can. And that profit, even

the way down, is going to be
substantial.

We'll study more of these examples, you
know, later on and in the practicum as

well. Another TP family member is...

the last chart, the last schematic right
here.

And it's going to have the same type of
institutional behavioral

characteristics as the hypodermic
distribution.

There's going to be some speculation on
the way up, but then what's more even

important is that throughout the initial
phase A and early phase

B, we're going to see urgent
distribution.

by institutions.

And usually this urgent distribution
will conclude

initial selling by institutions.

And because of that, the price is going
to go into some kind of apex formation.

And in this apex formation, this is
what's going to happen.

Weak hands are going to find some value
and they're going to be buyers.

But because they're weak hands, their
bind is not going to be very intense.

And it will never produce the rally
that's going to come to the levels of

bind climax.

And this is one of the attributes of
this CP Apex formation.

And institutions, you know, the strong
hands, they're already sold.

They don't need to sell anymore.

They are just basically inactive.

So institutions are inactive throughout

this whole apex formation.

If institutions are inactive, then all
of the reactions to the downside, just

because they are biased already to the
downside, are going to be mediocre as

well. And that's what creates the apex.

Weak hands are buying at the value zone,
and then they're just holding on to the

position. And then strong hands are just
basically already sold out, and they

don't want to sell anymore.

So there is an inactivity by
institutions, and that produces this

formation. It is being resolved on the
way out. And ironically,

this on the way out is also going to be
led by institutions.

they're going to see that throughout,
let's say, a couple of quarters, there

no absolute or

relative outperformance.

And this will lead for the final
capitulation.

And they were going to give up on this
position. As they're giving up, the

supply is going to increase at this
spot, and also the price will start

to the downside.

This movement to the downside will
change the sentiment of weak hands, and

they're going to start selling as well.

And that's why apex formations produce
such quick moves on high volume

signatures, because if there is a
capitulation out of the apex formation,

everyone participates in that, and
they're going to just capitulate on the

down.

getting out of the position, and it just
collapses the stock, collapses the

price.

All right, so definitely something that
I want you to think about, that I want

you to go through, and especially this
slide right here

with all

of the Wyckoff events.

all of the phases, intentions behind
those, and so on and so forth.

Okay, so I think that we're going to
stop. Okay, so a couple of other things.

So chit -chat on the distribution,
phases A and B. This is, again,

that you need to print out and just keep
in front of you, keep it in your

library.

Go through all of these points. This is
just another way for me to give you this

information.

I believe, you know, as a teacher, that
if I give you the same information in

different ways, one of the ways are
going to resonate more. So this is just

another way of thinking about this
concept. So just go through this by

Phase C, D, and E.

And then your homework for next time.
Your homework is still going

to be on labeling.

We're going to label.

Microsoft.

And it's the same assignment. I want you
to label the trading ranges with WICA

phases, events, and change of character.

So let's quickly look at this. And you
could notice that I don't have the

signature on all of these slides.

It's very intentional.

I want your mind to think only about
labeling at this point.

So 1, 2, 3, 4, 5, 6.

Seven, eight, nine.

Yes, okay, great.

So nine charts.

Okay, so this is the homework.

And then next class, what we're going to
do is we're going to look at your

distribution homework for today.

And we're going to go through that, and
we still have some of the material that

we need to cover.

But this is going to be, you know, our
last final class on

price structural analysis, and then
we're going to transition it to the

and demand.

So Eric is saying here, too much, Ramon.
Okay. Well, yeah, if you guys are

feeling like for those of you, you know,
for those of you who feel like, oh,

it's a little bit too much.

Go at your own pace.

Sometimes when I receive emails like,
this is a very intense course.

Yes, it is.

But there is no other way that I know
how to teach this material.

And there is no other way that I would
want to teach this material.

It's just me. It's just kind of like a
style, a teaching style.

So therefore, take your time and go at
your own pace. If you feel like you

go through the whole homework,

make it a point just to label at least
one chart.

Maybe two. Maybe you can do three. Or
maybe you'll find the time and label all

nine. And obviously, it comes with the
practice. So the more you practice, the

faster you're going to see those
concepts on the chart, the faster you're

to label those and so on and so forth.

So that's kind of like the key. To
study, but to study at your own pace and

don't over...

Don't overdo something like this where,
you know, I understand that this is not

your job. This is more of a secondary
income that you want to create. You

maybe it's kind of like a hobby for
somebody, so therefore just pace

All right, let's see some of the
comments.

What does it cost to be a part of your
Wednesday market update class?

We'll definitely go to our website.

Let me just see if I could quickly...

If

I could quickly show you this.

So under classes, go to a wake -up
market discussion.

The cost of this class is $99 per month.

This is a monthly recurring payment, so
you can cancel it at any point

via PayPal or just email us.

And this is an hour and a half on the
market on the last bar.

So, yeah, you're welcome to join us.

Another question.

Ramon, for me the confusion is the
difference of sign of weakness or spring

to reaccumulation.

Can have a spring and distribution have
sign of weakness so that it's so

similar? Okay, let me rephrase this
question so I think I understand it. So

difference between a spring

in the reaccumulation

and a sign of weakness in the
distribution.

I'm going to assume that a major sign of
weakness in the distribution.

So what's the difference, right? Because
they're going to look the same or

somewhat the same.

Well,

there are quite a few things that are
going to happen before, right? Even in

phase A, as we've studied, there might
be some very average volume signature

that's going to indicate to you that
this is a reaccumulation.

Maybe there is a subsequent supply
dryout and maybe just slight increase,

increase of the volume signature on the
actual spring.

Whereas in the distribution, we might
have phase A that's going to be

with a big supply increase and then

increase of the supply signature on the
way down.

So that could look different. But even
if we have not noticed this, then we

always would be thinking about the
confirmation of those patterns, the

confirmation of a spring.

A confirmation of a sign of weakness. So
what would be a confirmation of a

spring? The price comes back into the
trading range and goes into a major sign

of strength.

And then with the major sign of
weakness, there's going to be an attempt

back.

The price could come back, but then it
still needs to react into the resistance

and then collapse.

So those are going to be two different
pictures that you're going to see as a

confirmation. So I would concentrate on
that first because it's an easy

identification. And then try to define
the bias throughout the whole structure

as you go through phases A and B, which
is a much, much harder task.

All right.

Is there...

a redistribution trading range set up
similar to reaccumulation, or will it

proceed by buying climax during overall
downtrend?

There are quite a few similarities that
we could have between a reaccumulation

and a distribution.

And usually, as we say, like the first
one -third of the trading range.

is going to look the same. Now, this
statement is correct and erroneous at

same time because, yes, in some
instances, the trading ranges are going

know, with different bias, with the
reaccumulation and the distribution

indeed, they're going to start the same
way. And actually, I have an exercise

for you for the second month where we're
going to look at something like that.

And yet, the resolution of the trading
ranges are going to be different.

So we'll talk about that difference
more.

But on a very kind of like simplistic
level,

yes, you're going to see distributional
patterns that

are going to look a lot like an
accumulation or reaccumulation rather.

I've started session number one with the
examples of the trades that I made.

Go back to that session and rewatch a
trade in Novodea.

I've mentioned to you that throughout
the whole trading range, this was one of

the leadership stocks that was on my
watch list still as a reaccumulation.

And I don't see anything wrong with that
definition.

Yes, we know that Novodea went down.

And it would be dishonest for me to tell
you that I was

thinking of the distribution all the way
through the trading range. That's just

not how I function.

I was thinking about the reaccumulation,
so I'm going to tell you this.

And then some elements that came later
on after the upthrust.

That suggested the change of character
and defined the bias to the downside.

And that's when I figured out that now
it's going to be distributed.

And it's going to be distributed
relatively fast.

So we're looking for those type of
definitions.

Whenever you're asking me a question
like that, you're looking for a linear

solution to a complex multivariable type
of problem. problem.

And you can't solve this problem in a
linear way.

Or you can solve it in a linear way, but
you have to have the capacity to

connect so many different variables, so
many data points, and you just can't. As

a human, you can't. I think that, you
know, if you're using maybe like

supercomputers, you probably can, but
you still have to define the rules for

supercomputer, unless you define the
artificial intelligence rules and then

system learns how to identify it.

But for now, the key is concentrate on
the concepts and then be fluid,

be dynamic in your analysis.

Don't be linear. Don't be thinking that,
oh, it has to be all rule -based.

Yes, it has to be. But in a lot of
cases, it has to be conceptually based,

concept -based, right? So concept comes,
As a change of character, bias changes,

and therefore a good trade is being
produced.

Okay.

What else?

Okay, so I'm just going to conclude here
with one last remark, and that's it.

I'm going to go and rest.

This comes from Rick, and he says, no
other way I would want to learn. This is

my life to trade. This is my job.

And I love this because I'm the same
way.

You guys could definitely feel this, you
know, with each session that, you know,

I've developed quite a passion for
trading, for markets, for this material,

way how the logic works.

with all of those details and so on and
so forth.

And I definitely know that there are
quite a few people in this class

who have the same passion, the same kind
of like dedication, commitment to this

material, which is great.

But I also do not want to oversee other
students who maybe do not have the same

amount of time and the same type of...

Commitment just because of how the life
is, right? There are other things, more

important things than this event. There
are families, there are jobs, there are

other things that you, you know,
responsible for. So totally get this. Do

stress about that at all.

And go at your own pace.

The key is just to stay in the system.

to stay in this educational system and
try to get the most value out of this

education. So therefore, come to the
class, be present, be conscious when

you are in this class.

This is one thing that when you come to
this class and you're tired and your

time is limited, do yourself a favor.

Stay conscious for this two and a half
hours and stay present because...

You're going to gain a lot of knowledge
and you're going to gain a lot of

material from this.

But if you're not paying attention, then
it's kind of like you're there, but

you're not there.

And then if you can't re -watch the
video again, that's fine. If you can't

the homework fully, that's fine as well.

Maybe in the future you could re -listen
to the course, re -watch the course,

and do those homeworks.

I've been teaching for quite some time,
and at the beginning of my teaching

career, I was so strict with students.

And then it took me a time to understand
that people have

their own lives, and there are some
things that are much more important than

this. So define your commitment and
involvement in this course by yourself.

me know how you're doing this, and I
support you all the way.

with whatever path you choose.

With this, guys, I'm going to say good
night.

I'm going to try to post this recording
tonight, and then I'll see you all next

week on Monday. Send me your homework.

Thank you, guys, and I'll talk to you
later.

Cameron, thank you so much.

Bye -bye.