Original subtitles

Hello everyone, today is February 18th and this is our session number

7 of the Wyckoff Trading Course.

Thank you for sending me your homework and notes and email.

I really had a blast just reading through all of them and of course, you

noticing some patterns, whether they, you know, grooms to

whether this is the group pattern, mistakes

or issues or questions or comments, or it just belongs to some individual

students. So thank you for all of those.

And obviously, today's class is going to be a reflection of everything that

you've sent me in your emails.

Going to continue our volume and price analysis.

Oh, boy, I feel like I'm still not in the momentum.

Okay, I'm going to get there, guys. I'm going to get there.

So we're going to continue with our actually not like a price structure.

Gosh, I need to change this. Volume and price.

And our next session is going to be February 25th.

And I'll talk about what exactly we're going to do on the next slide. Really

quickly, some of the comments. So today I have to address this.

Without a doubt, volume and price analysis topic is most fascinating as

difficult to comprehend, especially considering many variables like local

or broader context, close with respect to spread, spread range up and down

compared to early bars.

which can potentially lead to people concluding opposite interpretation of

same scenario.

Yes, I would agree.

And that's why not just with Wyckoff method,

but analyzing the market could be so tricky.

Obviously, our goal is to deeply understand the reasons.

of why the price behaves the way that it

does based on its most recent and long -term past.

It's also based on the behaviors of market participants that we want to

understand.

And I've got a couple of emails, maybe three references

to... how confusing the volume and spread analysis is, or at least how I

explained it, you know, could be confusing.

And I think that you guys have to, you know, just basically grind it

out.

It's a very counterintuitive idea that we are talking about, where we see that

there is an effort behind one force, and yet that effort fails.

Usually the very much intuitive way of how we would be thinking about this type

of price volume action is going to be all about if there is force that is

present, then it's going to produce a specific result.

That's how we think.

That's kind of like our regular way of thinking.

And in markets, there are always different forces that are in play.

And sometimes it's not visible which force has won the battle.

So what we're trying to do is figure out early indications of

who is the winner of the battle between supply and demand.

And even some of the tools that we have, if you think about the volume as a

tool, it's just so insufficient.

we have to make sure that we interpret it correctly and that we extract the

correct deductions from that. I will talk about this a little bit later on,

maybe within the next three or four sessions. I'll present you with some

ways of how to look at the volume.

We'll do that.

And then further down the road in the wake of practicum, this is something

we discuss a lot.

So we'll do that.

Okay, next one. I just finished watching last session video again, and it was a

lot of enlightening after completing the homework.

Some of my questions were already answered by you in the last session, but

counselors did not think incompletely when I watched them before attempting

homework. I'm going to follow this approach of re -watching the video

after completing the homework.

as it helped me answer some of my own questions which I encountered while

the homework. Every time I rewatch the video, the earlier video, I learn

something new that I missed earlier.

Guys, why I'm putting this comment here?

This last sentence that I underlined right here is the most important one.

Once I rewatch earlier videos, I learn something new that I missed earlier.

I bet you anything that all of you going through the live session

or watching the video recording once, most likely

you guys are not retaining everything, what has been said, every thought, every

conclusion, and so on and so forth. And that's just how we are. We are just

humans. So to help us with this,

is an idea of going back and watching it again.

So I really would like to encourage you to do this. This is probably going to be

the most beneficial homework that you're going to have. And if you can do this

on a limited basis, just do it for this exercise that we just went into.

This is the most systematic exercise that the course has.

And we definitely go into the price structural analysis and we go into the

volume and price analysis.

And it's a combination of both that gives us such, you know, good knowledge

confidence in identifying the bias, the timing, and the character.

All right, next one. And this is just very kind of like

emotionally, you know, touching. So thank you for sending this.

The method makes perfect sense, provides real value.

And so this student has actually

tried

the knowledge as I believe in actual trading. So that's great.

Okay, it will take months of deep practice to get very well.

Very good with the knowledge, applying the knowledge and the skill.

This is one of the rules I learned by studying the science of expertise.

Yeah, I would definitely agree to this.

And this is what I do on a daily basis. So each day, the

knowledge that I have is not enough.

As I look at the market and if I don't understand something, then I know that

there is more knowledge to gain.

So we are just kind of, in a way, you know, when you study a lot,

there are a lot of blind spots that are being opened to you.

And you understand how, you know, still...

so much that you have to learn and you have to incorporate and develop the

on. So I really like this type of attitudes where, you know, you guys are

this seriously, you know, and obviously it just depends on the situation.

So, you know, don't take this too hard on yourselves if, you know, there is no

time to do a lot of work. So just get as much as you can from this.

But for those of you who have time, and who are serious about this stuff, then

yeah, study, study it, grind it, grind it. It's just like a constant grind and

constant like every day.

Let me look at the chart. Let me analyze the chart. Let me go to the class. Let

me do the homework.

Let me just do one thing a day and it will go a long way.

Well, anyway, so I really appreciate all the comments.

All right, guys.

Today... I'm thinking that we're definitely going to go beyond 530, so

this in mind.

So what are we going to do today? So we're going to revisit VSA a little bit

because there were quite a few questions, so we'll try to address

We're going to continue with our group exercise.

We're going to continue in the same manner. We're going to have the

We're going to go through a series of questions with the volunteers. We're

to try to figure out the bar analysis, swing analysis, behavioral analysis,

make some deductions, and then go to the next chart. I don't know exactly how

much we're going to cover today.

That's also always a mystery to me with any of the groups.

Sometimes it's quick, sometimes it's slower.

slower is always better because slower brings a lot of quality into our

analysis. And then our homework exercise is a group exercise note. So I

want you to re -watch the video and send me the notes.

Next class on the 25th, we're going to continue with the group exercise. We're

going to probably go with this exercise for maybe like four sessions more.

Then we'll talk about volume and phase analysis. I thought we'll talk about

today, but there are quite a lot of things that need to be discussed before

jump into the volume and phase analysis.

And then, as always, the homework is going to be only notes. I want you to

the video again and make notes and send those to me.

All right, let's revisit again the volume and spread analysis.

One of the biggest questions, comments, concerns that I heard from you guys is

that it sometimes could be misleading.

And I would say to that, or confusion.

That's what I heard in the email. It's confusion.

So I would start thinking about this again as a very much

counterintuitive way of thinking.

about the price and volume and how that relationship unfolds.

And obviously when we say, let's say, bearish or bullish,

we are implying the most probable

next short -term direction of what is going to happen next.

Literally either on the next bar or on the next series of bars.

Please note that I said highly probable way

of how the price is going to behave.

But what does it mean? High probability does not mean that it's going to do it

every time.

High probability only means that you have some kind of probabilistic edge

on the past.

And in some instances, it will go against you.

So I want you to keep this in mind.

I think the confusion comes more at the spots where, you know, we have some kind

of, you know, duality as to what could happen. Again, I mentioned that we

usually think in terms of high probability moves that should happen

But I think that something like this, scenario number five, where

maybe we're seeing extremely bullish picture. And maybe what I should do,

do here you know for the next cycle is to basically say um maybe looks

like looks like very bullish

bar and indeed

it does think about this in technical analysis we always say

that volume needs to confirm the price

So what are we seeing here? We're seeing that there is a big move to the upside,

so the price is extremely aggressively bullish.

And then the volume comes and increases significantly.

So our first thinking on kind of like the level of

basic knowledge that we have, we're going to be thinking that the volume

confirms the price.

So this is the basic knowledge.

But we need to go a little bit deeper, and we need to go and ask ourselves a

question of why the volume is so

high.

And then the answers will come when we'll start thinking about this.

We will be thinking, Well, this is very extraordinary, right? So if the volume

was high before, let's say that, you know, maybe this level here is an

equivalent of this, right? So a high volume signature.

And then it went up maybe, what, times three,

times four?

Can you imagine?

besides of the effort that has come?

And we're starting to question, is this all demand that

comes at this point?

Okay, so let's think about this.

If it all would be demand, and let's say in the previous scenarios we saw the

same, maybe it's kind of spread.

that goes up on this volume, which is the lower volume signature. And here,

times four volume signature, wouldn't we have the bar that would extend maybe

even four times more? Something like this.

This type of bar. I mean, like, it's a ridiculous bar.

And I'm over -exaggerating this concept, but hopefully communicating the idea

that not necessarily everything that looks so bullish

is going to be bullish.

And it's in the series of questions that we're getting the answers that, no,

it's not just demand that comes in.

Most likely, some supply comes in as well.

So if we're seeing that demand is increasing a lot, and we're going to say

demand is increasing quite...

Quite a lot.

And then we're saying that supply is increasing. And just because of how big,

climatically huge this signature is, that supply increases significantly.

So therefore, we have an increase in demand, a quite significant increase in

demand. And then we have an increase in supply.

Demand is still dominating supply at this point because we're closing

And that's how usually the majority of...

traders are going to interpret this type of bar.

But we know that with this increase of the supply, which is going to be more

than the increase of, let's say, supply that we've seen in other situations,

this increase of the supply will have some kind of institutional signature.

And again, we're asking why. Why would they come at this point and sell?

Well, because they need liquidity and obviously value.

and value they need both on the buying side and on the selling side.

We've talked about overbought conditions where institutions will try to either

scale out, unload some of the portions of their position, or maybe hedge

against the main position.

So both of the requirements are here. There's quite a lot of liquidity into

area, which probably is going to be a climactic action.

So they will sell into this liquidity.

They will see value for their exit point.

And therefore, they are the ones that are providing this supply, and that's

supply is increasing.

That increase of the supply, together with the increase of the demand, is

to produce that climactic action.

So again, what's going to look very much bullish is not

necessarily so.

And therefore, we are referring to this analysis as a counterintuitive skill.

Seeing something that is uniformly interpreted as

a bullish scenario, but behind it we could see

the beginnings or the emergence of the supply, the beginnings of...

maybe a distribution or just a stop in action in the emergence of institutional

supply. I think that, you know, the climactic actually should be

somewhat simplistic.

You guys, the shortcut to this as a visualization is just the extreme volume

signature. It's going to send out, it's going to be such a huge volume spike or

maybe a series of...

volumes combined together and with the climactic run, those characteristics of

the climactic action are going to be, you know, somewhat simple to identify.

I think that the much harder patterns are going to

be the ones that are going to be more subtle. For instance, this one right

and I think that there is a reference here in this comment in the middle of

chart. So this type of pattern.

where we see the diminution volume signature as a function of both

diminution demand and potentially diminution supply.

So how would the price behave after that?

To me, that's not necessarily a very high probability

scenario. I would say that the climactic supply

or climactic volume rather, will always have a much higher probability of

stopping the price from moving further up, at least in a very short -term

way.

So this is much more problematic on the analytical level.

And the price could be seen as just...

Diminishing demand, but supply is lower, so therefore there might be a

continuation.

Diminishing demand, saying that there are no more buyers, and therefore if the

quality of the demand goes down even more, then even diminishing supply could

produce some kind of reaction.

So you have to think about both of the scenarios at this spot.

And then you have to test it.

So you have to see what comes next.

If demand is diminishing and we're going to expect some kind of reaction, what

kind of reaction we're going to have?

Judge the quality of this reaction.

Okay, we have a reaction that comes maybe to the lower one -third of the

And then recovers intraday. So that's going to look bullish. And your test is

going to be successful, you know, as a continuation to the upside.

Or maybe we have a test that has a bar to the downside like this that commits

below this low.

Well, then this is a much more serious situation because that suggests the

reversal and potential continuation to the downside.

One way or another, guys.

however you feel about volume and spread analysis right now, I want to kind of

push you to still go forward with this and to still spend a lot of your

mental energy analyzing together with me and together with the class all

of the bars that we're going to go through, all of the swings, and then

keep asking the questions.

What am I not understanding?

What is my question to him on? Hand me those questions. And one by one, we're

going to deal with those and we're going to address those. And if we can't, then

we're just going to, you know, I'll put them into the question bucket for the

last session and we'll definitely address this. But let me reassure you

the end of this segment on volume and price, you will feel much more confident

about all of this.

All right.

Let me show you some of the examples which I thought, were great examples of

students' work that you guys sent to me. This actually was sent

to me, I believe, a couple of cycles ago.

Al has sent this almost like a spreadsheet or a table

where he talks about different,

he puts there visually different

Context. Then spread.

And volume.

So you have all three. And then, you know, everything goes into the

interpretation. So I thought it was really cool visually and how the

is being presented.

So and he said, okay, you know, to distribute and to show. So here you go,

You can take this, print this out.

And I love that every one of you is so individually unique in the

way how you understand this material, how you interpret, how you visualize it.

And it's always so much fun when you guys send me this type of pieces.

Just tell me a couple of things about you that you are thinking, that you're

thinking about this concept, that you are...

individualizing those concepts, which is extremely important because when you do

something like this, then I know that you understand the material and that

you're more or less comfortable with that.

And then obviously just from the perspective of, well, that was the

you did this, so that's great. This was not the homework for our class for this

cycle, so don't worry about this.

Okay, so let's look at something else.

With the group exercise, again, quite a lot of work that you guys done.

And unfortunately, that's the only way. I do not know any other ways of how I

could teach you something without you practicing and you gaining all of the

knowledge and skill.

I'm just a messenger here. I'm giving you this material.

You have to...

create the ownership of this material by practicing.

So there are quite a few wonderful ways of how you practiced.

So this comes from Lee.

And this is just phenomenal.

Look what he's done here.

It's a spreadsheet, I believe, that was just transferred into the PowerPoint.

And then we have all of the bars, one by one.

with all of the interpretations as to how the effort and the

result interact with each other and what kind of

subcategories on that under the volume and

spread we have and what are the deductions from that. So that's

Okay, next example, also a spreadsheet from Doug.

And kind of the same idea, and again, I love this because you guys are making it

your own, and that tells me that you're comfortable and you're adapting the

material well.

So that's great.

Okay.

This was also very cool. This one is from Rama. This is on the homework for

So Rama, not just did the homework, but...

Took the S &P spiders and then bar -by -bar analysis.

And I'm actually thinking this is such a great idea.

Probably some of the exercises that I need to incorporate into the course are

going to be something like this. Not just for you to find specific bars, but

interpret the bars like this.

Although we do this with the group exercise already. But a cool way and

good job.

And if you guys want to practice, you know, do something like this. Just grab

any chart and then go bar by bar.

See if you can interpret each bar.

You can write it down or you could just do it, you know, on your iPad, you know,

kind of like more mechanically. Just open up each bar, bar by bar.

And then if the interpretation was not correct,

Come back to the other bar with the question of what am I not seeing here?

Why is the next move such?

And what information can I extract from the previous bar

that would give me an indication of what's going to happen next?

A very quick example of this, and I'm not going to go through all of what Rama

has written here, so you could read it yourself.

But really quickly, look at bar number three and how all of them are going to

connected, right? So let's even actually start with bar number two. So bar

number two has some kind of bullish characteristic with increasing spread,

close, a small supply that's coming in on the increasing volume.

So we know that there is some kind of emergence of the supply.

So if next day is going to be increased effort to the downside

that we might not see, but it's going to be there, then we might stop at that

point. And look at what happens with the result.

Result to the upside diminishes in the spread.

We see that the effort has increased.

And we are asking ourselves a question.

What would be the situation with the volume and specifically with supply when

the effort increased so much and the result decreased relative to bar number

two? So we would be thinking that supply is increasing at this spot even more

than on the previous bar. That suggests a stop in action, possible reversal.

And then within the context of the move, suggest a climactic action. With the

climactic action, there is a suggestion for the trading range.

And look how such a simple assumption

about bar number three leads us to a more meaningful conclusion that

a possible trading range might unfold.

So volume and spread analysis.

or what Wyckoff was referring to as tape reading, is very crucial

for us, and we need to understand it really well.

Okay, a couple of questions, comments on the homework from Noesh.

And I'm going to go, I'm going to try to go through these questions really fast.

Is it fair to assume that in upswing intention is up and in

downswing down?

Yes.

Is it strong weak hand intention that we are tracking here?

Not necessarily that the intentions of the strong or weak hands is

going to be associated with specific moves.

We might be, let's say, in the accumulation range.

where the strong hands are picking everything up at the bottom and they are

accumulating the stock at this point of time.

And imagine that there is kind of like a timer at which they stop

accumulating and they're saying, we have a full position.

Actually, I was just working today with one of the institutional clients of

mine.

a good friend, and we were discussing the risk parameters for

the system that they're developing.

And it's very interesting how institutions accumulate

their position.

They are not necessarily going to be acquiring the full position right away.

In a way, sometimes they want kind of gradually come into the position

at the most opportune times of value and liquidity and also at the

times where they acquire

some additional confirmation for their idea.

So in other words, and I really like this thinking, in other words, they're

going to put on the pro position.

and see how that's going to behave.

And doesn't that remind you of reminiscences of a shock operator type

stories?

If you have not read this book, please go and buy it and read this.

And then after the proposition, if, and only under the condition of if, if

behaves correctly,

Then they're going to find the next scale -in opportunity.

And obviously, the scale -in opportunity is going to be within the system rules.

And then they might have other spots where they add additional

shares. And only then...

all of this would act as a full position for them.

So just a kind of different way of thinking about risk

within the context of the structure.

And I'm going to be showing you more and more of this type of thinking because I

think that we amateur traders could benefit from the professional way of how

people are looking at the best risk.

practices, tactical practices, and so on and so forth.

So it's not necessarily that we will be seeing the intention, let's say,

behind this rally right here.

Let me just highlight this a little bit more. Let's say, what is the intention

behind this rally by strong hands?

There is only one intention, and it's just to accumulate the shares at the

price right here.

There is no intention...

behind strong hands for the price to break out right away.

The strong hands still in the acquiring mode and they will not mark

up intentionally the price until the timer is on, until we have a full

for this particular institution.

So I wouldn't be thinking about it that way. I would be just thinking that

whether...

a reaction to the downside at the level of the, let's say, support.

The intention here is going to be to continue to move to the downside.

Intention to go down.

And then on the way up into the area of the resistance, the intention is going

to be to commit above, to go above.

and to commit above.

So that's how we need to think about the intention.

All right.

In selling climax, is the intention to stop the decline or move prices further

down? Okay, so I see how the strong and weak hands come about with

the selling climax, and that actually makes sense to me.

Yes, so behind the climactic action,

We might be thinking that the intention for strong hands is to stop the

downtrend, although there is no, again, I think it's

not even semantics, but there is no herd mentality by institutions to

stop the trend.

because that would be tempering, right? So they can't get together and say like,

yeah, let's stop this trend at let's say $100 or let's say $20.

No, they individually make their decision on the value proposition at

And they say that at this level, we're seeing value and we are presented with

enough liquidity to get in to position and establish that position.

Because that type of thinking is going to be common among

the contrarian institutional traders.

That's what's going to create the size capable of observing the supply, the

panic supply, and capable of stopping the price from moving further down.

So in a way, sometimes...

When I hear that people would say like composite operator, composite man, you

know, trapped weak hands and wanted to move the price down so that all of the

stop losses would work in, you know, in the composite operator's favor.

That doesn't really make sense to me. There is no kind of like bad, devious

intention behind the composite man. The only intention by the composite man.

It's simple. It's the same intention as for you and for me. It's to make money.

So the composite man is going to come in at the point of value and liquidity

that they consider to be their point of entry.

And if there are enough institutions that think in the same way, that's

going to absorb the supply and stop the price from going further down.

Having said this.

From the swing perspective, the intention of the downtrend is always to

below the next point of support, right? So we see it here.

There is a commitment to the downside.

So on the next attempt to go down, which is this reaction right here, swing

number five, we will be talking about an ability to commit to the downside.

Therefore, intention is not satisfied.

Oh, I didn't realize there are so many questions here.

For bullish or bearish close bars around support and resistance, is the

intention to break support or resistance, or just the direction of a

and down, for example, bar number 1920?

Yeah, we'll talk about this spot, so let's not go there.

But, you know, let's come back, let's say, to this area right here.

Behind bar number two, the intention was what? To commit above.

We had a lot of effort behind it.

we had a very bullish bar.

And actually, this reminds me of this conversation, discussion that we had on

the previous slides, VSA slides, where we see this type of bar

that looks very bullish.

And that's where a mistake is going to come if people don't recognize as to how

much the volume has increased relative to the average.

And what does it actually mean? We've talked about the emergence of the

This was a really good example.

But yeah, the intention is always not just to break the support or

resistance.

So let's say like this one right here, 25.

It doesn't show a commitment above the resistance.

It shows only an attempt to commit, an intraday commitment.

and then the close is below that.

So intention is always to commit above or below.

Advance and decline in market schematics for volume and price analysis stock

above and decrease in spread.

Instead of going by candle schematic, should I concentrate more on effort and

result equation for interpretation?

You could do either.

I've been kind of doing them separately and I just combined them just recently.

Why? Because it's just two different ways of interpreting the same data

and coming to the same conclusion.

So I think it's a person dependent, student dependent as to whether you are

kind of like visual or more maybe even kind of like auditory in the way that

need to.

put it into the equation and so on and so forth. So it's up to you exactly how

you're going to do this.

I found it very hard to decide whether or not supply demand is coming from

strong hands or weak hands.

You know, this is something that is going to develop, so don't worry about

This is something that's going to come and...

will require some time to master.

And I'm still mastering this in a big way.

So I understand the concept, I see them, but yet I have to

consciously start thinking about them. So they are not necessarily the ones

are jumping out right away. Although in the spots like this, you should

instantly understand what's happening here.

here, here, here. All of those spots are going to be somewhat of the same

quality. And then obviously this, this, this, this, this, and so on and so

forth.

So for specific patterns like this, once you see them, then you know specific

strong and weak hands behaviors at those spots.

And we will be discussing those. So if you feel like you...

don't fully understand something or you don't see, it's just a matter of time.

It's just a matter of practice. And we just had one class. So, you know, just,

you know, it's going to be okay.

All right.

A couple of other questions here from Eric.

In swing number two,

the candle number two.

Could we think that bullish green candle is the level where some institutions

bought and the other found lower, more interesting value, creating in that way

the trading range accumulation starting in the trading range and

creating in that way the cause?

So we are talking about this bar and the question here from Eric is,

is this an institutional bias?

And the answer to this is most definite, yes.

And then we need to think about the intention here, right? So what was the

intention? The intention was to overcome

the resistance and commit to the upside so therefore the weak hands were buying

and the strong hands were selling so therefore

yes institutions are buying on this bar and they are weak hands so those

institutions that are buyers at this point we would be thinking as of we can

could they have uh hold on to this position through this trading range.

possible. So think about this for a second. And that's why I think using the

composite man as kind of like one single narrative heuristic to describe all of

the market participants, their intentions and behaviors is, I'm not

sure it's a good way to do that.

Imagine an institution that bought on this bar, as Eric suggests.

Then this institution is holding on through this position through swing

4, 3, 5, 6, and then that position is profitable.

So are they weak hands or are they strong hands?

Well, if we would be very diligent about this, we probably would say they bought

this position from the position of weak hands.

still not at the most opportune opportunity for institutions because we

that institutions want value and there was a much better value below and

institutions wants liquidity and there is a lot of liquidity to the upside here

but there was no liquidity to the downside like we've had on bars number

and six that go into the more climactic type of run and there is a general

capitulation at that point.

So on the point of entry by this institution, I definitely would say that

institution acts as we can.

So therefore, we would be thinking in our next analysis, and let

me know, guys, which bar did we stop on. I think six or seven. We didn't go

through the trading range. So as we discuss the trading range, we'll

the behaviors, the behavioral analysis, and we'll talk about, you know, all of

those market participants, what they're doing. Okay, good question.

Can clothes be bearish in schematic number one since this is bullish?

Okay, so from R1.

Okay, in schematic number one. Are we talking about this?

in the advancing markets, yeah, I'm assuming.

That's the only schematic that really can close, be bearish. Here,

well, depending on, you know, the increase in the volume signature still

suggest the increase of the supply, right? So it's all contextual at this

You know, on the schematic,

This is oversimplification, Armand, you know, conceptual simplification.

But on the actual chart, and again, going through the exercise, we'll see

once we look at the analogs, we might interpret this bar differently.

So again, it's an extremely important task to understand the

implication of the context of where the signal occurs.

Yeah, okay. Well, let's kind of leave this to the exercise. And at some of the

spots where you see this, Armand, please just nudge me and we'll talk about this

again.

All right.

Okay, let's go to the next one.

Okay, so a small piece of lecture information for today. This is going to

crucial for us, and we've talked about this a little bit.

This, I believe, was done by one of my students from previous cycles, and this

is a great slide because visually it just explains the concept really good.

We're talking about the price spread analysis, only the price, no volume, and

we're talking about the bullish.

spread and the true range.

And there is a difference between those two definitions.

So the spread by itself, or sometimes we would say on the daily chart, a daily

spread is the distance between the low and the high of the spread. So we would

take the high and the low, and that would be the measurement of the spread.

The low and the high, and that would be the spread.

The true range is something different. The true range occurs when we have a

condition of a gap.

And therefore, we will be talking that during the overnight session,

institutions have traded the stock and they are trading

advanced price further up. And on the open, the price was higher.

than the previous close, and that's what has created that gap.

If you have an opportunity on your software packages to go and to look at

after -hours session price and volume charts, you will see that,

especially for stocks that are going through earnings after the close or

on the same day, the next day, you're going to have a lot of after the session

activity. And, you know, over 99 % of that activity is all institutional.

Institutions are trading with each other, exchanging the shares among each

other. And then that moves the price.

It's in a way kind of unfair that... For a long time, retail

traders were not able to participate in something like this. You would be

thinking, well, there is some kind of edge right there.

And there is definitely an edge if you can create a system around this.

But you are capable of doing this and trading after these sessions now

almost with any of the brokers.

So you can look into this. My advice is don't even bother so much unless your

system somehow is aligned with the, let's say, after the

market earnings type of trading. But other than that, majority of the

stocks are not going to move significantly unless there is some kind

so on and so forth.

Coming back to the true range definition, when we have a gap, we want

understand the movement, the full movement of the price on this next day.

close of the previous day will be the time for us when we say this is where

next day begins.

So all of the movement that we have, this difference

between the high and the...

Previous days close.

That's going to be the true range.

And when we do our effort result analysis, we're going to say, let's say,

increasing effort, we're going to see the increased result.

And also we will be thinking about the day session for this bar, right? So we,

in some instances, this bar might be like smaller.

So more compressed, more condensed.

So for this type of bar, we would say even though effort has increased and the

true range has increased, but for the day's activity, we see how the

of the spread suggests the emergence of the supply at that spot.

So again, we'll discuss this more as we go through the exercise. Bearish spread

and true range is going to be defined the same way.

So the difference between the high and the low for just the spread or the daily

spread. It could be weekly spread. It could be monthly spread.

And then for the true range, we have to have a definition of the gap as an

overnight session.

And then the difference between the low of the

daily bar and the previous close will define the

true range.

for this bar, and this is the true range.

So, and that's gonna look like a significant bar type of bar.

All right, great.

So, yeah, Cameron and I agree, very simple visually appealing slide, you

and all of the concepts are here.

There's really no need to add anything else to this.

Okay, so now, so we said,

Start on number seven. Okay, so we need a volunteer, and we're going to start

with bar number seven.

So say yes, and hopefully, you know, somebody steps in, you know, who has not

done this before.

All right, so still waiting for a volunteer.

Excellent. Okay.

All right.

Okay, great. So I'm going to try and see if we could do this with somebody who I

think we haven't done this before.

Hi, Rick. How are you doing?

Doing good.

Okay, great.

So let's start with bar number seven.

And before we do that, let me kind of like really quickly go through what

we've done before. So we just talked about bar number two. We said that the

hands were buying on this bar.

The strong hands were selling or just being inactive, but

most likely selling just because the volume was so big. So that produces...

A continuation of the short -term bias to the downside on bar number three. We

see how the test in a way fails.

There is a penetration of the low of bar number two by bar number three on the

intraday basis that suggests weakness and suggests a continuation to the

downside. In the swing number three, we see that at the end, starting with bar

number five, there are attempts to stop the price from moving further down.

Well, what does this attempt mean? It means that the demand is increasing.

Demand is starting to absorb supply at this point.

And then on bar number six, we see the same pattern where demand is coming in

and we see this demand tail.

And we see that for this time, as supply signature globally

just goes down, we also see that on the decreasing effort to push the price

higher, the price goes up the same way to the upside.

So it equals the same distance as on bar number five.

So we see some kind of ease of movement to the upside that suggests that supply

might be exhausted.

Supply is exhausted. And also that demand is,

is capable of moving the price up.

And I think that this is where we have stopped.

So Rick, let's start here at number six and seven.

So did we talk about number six?

I just don't recall this. I think we did.

Yes, we have. Yeah, we have. Okay.

All right, so let me start with the question. So how do we view bar number

as a potential Wyckoff event of what?

What is this event at number six?

Selling climax.

Selling climax, okay. And selling climax have what kind of characteristics

really quickly?

Stopping action.

Stopping action, yes, we're stopping the price from moving further down. Okay,

then how would the volume behave?

Well,

it looks like on this one it's increased volume.

Yeah, there is in this area.

And, you know, when we talk about selling climax, buying climax, we're not

necessarily, guys, are going to talk about one bar.

We're going to talk about more of the climactic run to the downside, climactic

run to the upside.

So we might pick up an area, a number of bars, that would have that increased

volume signature, and that would be a characteristic of a panic at this spot.

Okay, well, if the volume should increase on the climactic action, then

would the price behave, Eric? I'm sorry, Eric.

Well, probably the price should go down and increase.

But in which way? What would be the character of how the price goes down?

So we addressed the volume already. How would the price go down?

Increased spread you should see on the way down. Yes. So we would be looking at

the increased spread. We would be looking at the climactic run.

We would be looking at some gaps to the downside.

And we kind of see, to some extent, all of this is just not that profound.

I mean, like we look and we see, yes, there are increasing spread. We see some

gaps.

This move to the downside accelerates relative to what we've seen before.

So there is a climactic action. It's just not extremely well defined.

So the volume helps us out a lot, and then just the stopping action by itself

six. Okay, so at this point, we're thinking maybe a climactic action.

What should happen next, Rick?

Then automatic rally.

Absolutely. And automatic rally also would be characterized, this rally right

here, as what else?

This rally.

looking at the previous rallies on the decline, what can we say about this

between six and seven?

Should be a bigger rally.

Yeah. Between six and seven. Yeah, between six and seven. After the

run, we're going to have an automatic rally, and that's going to create a

of character.

Rick, what does change of character suggest to us at this point?

that we're going to enter into a trading range.

Absolutely. We're going to go into a non -trending environment.

And we only conclude this from the way how the price behaves behind this rally,

right? So this is the largest rally on the way down. And it tells us that there

is more buying here or at least ability of the price to move up on diminishing

demand signature.

There is some buying here already. We've talked about the emergence of the

demand on bond number five, bond number six, and now on this rally between

six and seven. So it's almost as if somebody is buying in this

area right here. So in right away, this area becomes your value zone

because you're thinking who would be buying on the way down.

on the institutions.

So kind of like an institutional value zone.

So anything at the bottom is going to be an oversold condition. Anything at the

top or close to the top is going to be an overbought condition.

And that's how we will be looking, you know, through this whole area.

Well, Rick, now that we know that we're going to be in the consolidating

environment and six was defined as a selling climax, Seven is an automatic

rally. Eight is defined as... That would be a

secondary test.

Secondary test, absolutely correctly, which concludes phase... Phase

A. Phase A.

Now that we know that we are in the trading range, let's try and go through

trading range and try to figure out...

phases, right? And we know that this was an accumulation. So let's deal with the

phases first and then we'll talk about the bias.

Where would you put phase C?

Phase C I would put at bar nine.

Okay. I would concur with that. For the test.

Okay. The test.

All right. So why would you put it in this area?

Because it's testing the lows in phase

A and B.

Okay. So it's a test. Uh -huh. Okay. And by the way, right away, so test, we

usually would say we need test number three. Let's define.

Those tests. So we see point number nine is test number three.

We said that, you said that test at point number eight, right?

Test number one.

So when, where is the second? In phase B.

In phase B, the test in phase B.

Yeah, so this is the second test.

So to identify phase C, our WTC shortcuts.

are going to be test number three, then what else do we usually talk about

to identify phase C?

How about the point of fear?

Oh, yeah, that would be like their second point of fear.

Yeah, second point of fear.

So where is the first point of fear, Rick?

First point of fear is in the selling climax.

Absolutely. Yeah. So this is our first point of fear. This is where there is a

panic, but we can't. And usually selling climax is going to lead into more kind

of like general capitulation.

weak hands, both institutional and retail hands.

And that's why we see this increase in volume signature.

That's why we see this move to the downside.

And it's fearful for weak hands. They're trying to get rid of their stock as

much as possible.

Then a second point of fear, which is going to look slightly different,

differently, right?

It's going to look slightly different because a lot of the weak hands are

to be out. A lot of institutional weak hands are going to be out.

And then whatever weak hands are going to be left, this is their mini panic in

phase C as they are thinking that that's it. You know, I can't

really take the price going further down below this trading range. So I'm going

to sell.

And they are selling right before the price goes up. But price goes up not

because, let's say, this is the time for the price to go up.

All of these events, they're interconnected.

Once the price starts to go down on the second point of fear, that's when the

weak hands are saying, that's it, get me out. That increases slightly the

liquidity at this spot, which suggests institutional buying.

And this institutional buying absorbs the latest, whatever is left supply,

and also produces the...

push momentum push to the upside so all of those actions are kind of like

interconnected okay great rick why don't we talk about um a bias

here in this trading range so uh looking just at the volume signature and what

the price is doing how can we define the bias and at which point at which bar

could we

conclude and say, like, there is a confirmation that, yes, the bias now is

the upside?

I would say at bar, maybe at

bar nine.

Okay.

Has that tail?

Well, it's got that tail on it, so there's still some demand there.

And the supply is very, looks like kind of the

supply has gone down.

Yeah. Uh -huh.

Okay. So, yeah, let me just kind of rephrase what Rick has said.

The main idea for us to define the buys is to define the relationship between

supply and demand and to see how the price behaves to that relationship.

So we've seen that the volume generally decreases throughout the whole

structure. We've seen that supply has significantly diminished relative to

we've seen on the climactic action. And that acts for us as the main driving

force behind the bias to the upside.

And we also see that...

On bar number nine, as Rick has mentioned, there is some demand that's

and that produces kind of like a small spring situation where the price comes

back into this middle of the range area.

Okay, well, if that would give us some kind of a high probability suggestion

the bias rate, I would say that maybe a bar number 10.

would act as a full confirmation that we are done with the trading range and

that we are possibly, you know, not possibly, but and that we are most

probabilistically going up from this point up.

What is it about Barnum Batan that, you know, could give us that

type of confidence that, you know, now we are going to be in the upswing?

Well, because it pushed above the resistance and then it

closed right at resistance.

Yeah. And, of course, I'm looking at bar 11, so it's like, okay, it's staying

above resistance.

But on bar number 10, even though, you know, it's a good observation.

that the close is right on the level of the resistance of the high of bar number

seven. So, and we see that the intraday tail here, it actually, you know,

tried to commit to the upside and then came back.

And also, please note the volume signature, right? So this is the highest

signature since what? Well, this bar has some supply.

This was close to that level.

but also had some supply.

So this is probably the first bar, which is more or less kind of like demand

pure bar.

This is the bar where demand dominates supply so much. And one of the qualities

of the results here is that we're looking at the close, and even though it

on the resistance level here, but look at how many closes this bar...

reverses. We have 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,

13, 14, 15, 16, 17, 18.

So either 18 or 17 bars.

So this one single bar reverses 17 bars.

All of these bars right here.

And that happens on the increasing

Volume signature.

So Rick, how would we construct then the effort and the result equation?

So we've seen the increase in effort, right?

And then result is doing what?

Result is increasing.

Is increasing as well.

Okay, so bullish or bearish?

Bullish. Bullish.

So short -term bullish. And this is the bar that we will be thinking as a change

of character bar.

So if we had a change of character between 6 and 7, and that was a change

character on the way into the trading range, then a change of character bar or

change of character behavior at 10 is going to be on the way out.

So, bullish behavior, change of character bar on the way out, that

rally. And right here, we would be thinking if we're expecting a rally,

all, where it's going to go, distance, and then

how do we trade it.

So, Rick, what do you think?

What's going to be, and not just the distance, let's talk about a distance.

Let's talk about a potential character.

And let's talk about how would we trade this.

So how would we define a distance from the volume and price?

Any suggestions?

I would probably, probably looking at bars like two and three.

Looking at that as a point of resistance?

Absolutely. Okay, good. I would suggest that maybe even this bar right here,

right, so we kind of have a cluster of resistance, right?

Okay.

And would you say that based on bar number 10 and what

precludes bar number 10, what happens before bar number 10?

would you say that the price should just hit this resistance or overcome this

resistance? And this is an important question because it talks a lot about

character of the potential.

I think it would overcome resistance just because of the size of the bar, the

demand. Okay, okay.

How would we be thinking about this? And this is a very interesting question,

guys.

How are we kind of going more and more into the details of this material?

Look at the spread of this bar, bar number 10.

Here it is.

There it is. And then what would be a comparable analog bar to that?

Right? So maybe bar number 7.

What else? What other bar would be an analog bar, would you think, Rick?

As far as the spread goes?

Yeah, the spread.

Might possibly bar six has got about the same spread. Of course, it's to the

downside, though. Yeah, so we need the same spread to lose bar.

Probably bar two.

Yeah, bar two.

Bar two's got the same spread.

Okay, so now we're looking at some analogs.

And we are saying, okay, so we're looking at bar number two,

bar number seven, and bar number ten, and all of this into the

relationship, the question of what's going to

be the character?

Could we overcome this resistance?

So comparing ten and seven.

What could we say about the effort, and what could we say about the results?

It looks like there's more effort on 10, and

it looks like we have a little bit greater result.

Yeah, yeah, absolutely.

So, Polish.

Bullish, absolutely.

So basically what we're saying is that bar number 10 is more

bullish than bar number 7.

And why this is so important is because we know what has happened after bar

number 7. We had a reaction.

And it's not a significant reaction. It's actually a very bullish reaction.

It's just, you know, it's suggested this bar that there is some buying.

This is the extent to which this buying, you know, can take the price up.

But Bonobo 10 looks a much better, more bullish type of bar, which suggests the

continuation to the upside.

And we're probably thinking that if that's the case, we're probably going to

the resistance and there is, you know, some chance that we're going to overcome

it. Okay, well, then let's look at bar number two.

We said that there is a lot of supply right there, but there is some demand.

we're seeing how bar number 10 on a much low volume signature kind of produces

the same result, right? So if we would even think about comparing the results,

so effort of two and a half times

less.

produces same results.

Bullish or bearish?

Bullish. And it seems like it's going to be even more bullish than bar number

two. So there is some kind of ease of movement that suggests that supply has

been exhausted and at number two it was not exhausted completely.

At seven, supply is exhausted, but demand is still not there, you know,

good emerging demand.

So bar number 10, for the first time, shows us that demand is good,

and not only it's good, it produces, and supply

is exhausted, but it produces a good movement to the upside.

So with that, we're thinking that supply

is exhausted and um demand is good therefore not only we should be touching

this resistance most likely we're going to overcome it and that's the conclusion

on the character that we could we could have now the next question is well we

identified phase c here uh we could identify phase d probably that's going

be number 11 and then the reaction, we could call this a sign of strength,

minus sign of strength, and then a backing up action, and that's going to

conclude our phase D. So how would we trade this, Rick?

Which bar would you get in? Which bar would you add to the position?

Probably first point of entry on bar 10.

I would agree with that. Or 11, I guess.

I think 10 works really well.

But where is the stop loss?

Stop loss is going to be probably down.

I'd be putting it at that line below that tail on

nine. Okay, so somewhere here.

Okay, a logical place.

Why? Well, because we're thinking structurally phase C as number one, so

in phase C usually will define the low of the whole uptrend. So if that's the

case, if we define phase C correctly, then yes, this would be okay.

Second point of logic here.

is going to be that there was some supply that emerged. By the way, this is

bar right here. I keep referring to the wrong bar.

There was some supply increase here.

And it was consumed. It was observed. So some demand came in here as well

because we see how in the next bar there is no progression below the support.

So therefore, there is some buying here on these two bars.

And the stop loss below it would be logical place to expect if the price

back, there's going to be some kind of support and buy -in again.

So that's the whole logic behind the stop losses. You don't necessarily want

look at the specific price level. You want to look at the specific

price level that's going to be associated with buying or selling by

institutions. And then obviously you could also have a more conservative just

stop loss below the bar number 6.

Okay, well if bar number 10 is our first point of entry, then could we buy again

on 11?

Probably buy on 11 .5 on the backup.

Yeah, I would agree with that. Right there, yeah.

On the backup.

So we don't necessarily want to buy on the breakout itself.

We want to buy on the breakout of the back -nup action because we don't know

the price would come back into the trading range. That's always a big

Although with the supply that we have here, we kind of see that we're probably

not going to expect a lot of the supply.

The largest supply came somewhere here and then here.

So these are the zones that we would be expecting some kind of selling to

emerge. And we see that. So this is the zone.

And by this zone, we know that as the price goes up, there is no reason for us

to buy in the middle of the zone.

Goes up, has a reaction.

And we'd rather buy in the oversold condition, which is a short -term

condition right here, especially on the dimension supply signature.

So that's a good second point of entry right here.

Okay, so how about bar number 12?

What can we say about bar number 12?

Looks like...

Lots of supply and some good demand, too.

Yeah. We definitely see that spread -wise,

it's probably the largest spread out of 10, 11, and 12,

right? So upspread is increasing.

It happens on...

a really good volume signature.

So this signature right here, bar number 11, it

has the volume equation as increasing volume

with the increasing demand and with some supply

that is emerging.

This emergence of the supply suggests

that, by the way, again, we're talking about this resistance right here, this

selling by institutions. So there is a memory here, emotional memory to sell by

some of the institutional traders at this level. So they're going to sell

And that's what's being produced, this reaction, instead of what? Instead of

this reaction to point number six.

So this is extremely bullish. But this emergence of the supply suggests a

reaction.

and see how logical everything is.

It makes a lot of sense that at this spot where supply is emerging, there is

reaction, and then we need to understand the character of this reaction.

And we see that there is no follow -through to the downside.

So that confirms the no follow -through, confirms

bullish bias, and confirms continuation to the upside, which

is... bar number 12.

so bar number 12 um has a slightly different um you know characteristic

uh volume characteristic let me ask you this tricky question rick where do you

think there is more on barnabas 11 or bar number 12.

what do you think

Well, I would say that possibly number 11 has more supply

because of that long tail up to the top, but it's closed. We'll write it like 50

% or lower.

Yes, yes, correct.

Absolutely correct, and I like the explanation too.

So by this tail here,

we see a supply tail. Yes.

And we see that the volume signature on 11 and 12, almost equal.

So think about this. Effort is either

equal on 11, either equal on 12, either equal or slightly less

on 11.

And then, but yet.

result on 12 is slightly more or equal

to well actually better definitely better than the result on 11.

so it's the supply that comes at this point of memory here at point at bar

number two it increases and it produces this reaction then at 12 we also have

some supply coming in, but it's less.

We see this from the volume signature that it's slightly diminishing. So if

volume signature diminishes and the bar number 12 looks more bullish, then we're

probably thinking that with that volume increase, demand has increased more and

probably supply went down instead of going up. So we have different volume

equations here for this.

Number 11, we would have volume increase, which is a lot

increase for the volume at that point of time. Demand is increasing and supply

is increasing.

So that's going to be the difference.

Increase of the supply and decrease of the demand. So absolutely correct.

And then bottom of 12.

Now think about what we've just done. We're just saying that bottom of 12 will

have less of the supply.

And then demand is probably going to be the same.

Bullish or bearish, Rick?

Apply more demand and the bar X in a bullish

way.

Bullish or bearish?

I think that's bullish.

Bullish. You are 10 for 10 on all of the answers.

So far. So don't sweat it out. Okay. Yeah.

Okay. So bullish.

We are thinking that there's going to be a continuation.

We are still very much in a bullish mode.

So at this point of time, we're at the point of the resistance.

Think about the logic

with which we arrived to the close of bond number 12.

We are still bullish.

does this suggest that we're going to overcome resistance or not?

Yes, it does. Yes.

I would say. So do you guys see how bar by bar we are defining the character of

the probable next move short term, but within the context of the structure, we

could also understand the context of the swing.

And of course, once supply has diminished on bar number 12, and we are

the resistance at that point, not only are we going to continue to the upside,

but because supply is so low, we're going to accelerate and momentum is

increase as well.

Now, everything is so interconnected.

Each bar produces some kind of reaction,

future reactions from different market participants.

in a specific way.

As the momentum increases, what do you think is happening with weekends?

How are they behaving at this point, Rick?

What are they seeing on this breakout?

They're probably wanting to get in before they miss the run.

Absolutely. So they are buyers.

at this point of time, okay? And they are excited.

By the way, excitement for weak hands happens at which two points?

At the buying climax.

Absolutely. This is number one.

And then at the breakout.

At the breakout, yeah. The breakout or it's going to be at the upthrust in the

distribution. Okay, great.

Perfect, 12 for 12.

So it's this excitement by weak hands. And remember that weak hands

are not just defined by retail hands, not just defined by public, but

weak hands are going to be defined by institutions.

And institutions or institutional weak hands, buyers,

they're going to bring a lot of liquidity.

So the volume is going to increase.

And we see that. Look at the volume signature.

So weak hands are trying to get into this position before the trend

runs away from them.

Okay, so really quickly, switch hats.

And let's think about, well, as the strong hands see this situation. So

hands. seeing the following picture.

They are seeing a short -term overbought condition.

And they're seeing that weak hands provide a lot of liquidity.

What is this inviting them to do?

That's inviting them to sell.

That's so counterintuitive. Why would somebody sell when everything is so

bullish? And that's the whole thing with trading.

It's just we are not psychologically built to trade in a profitable way

because people are created more as, you know, flight to safety just because

we needed to survive as species.

coming, you know, from the era where we just were hurt.

And now we are surviving, you know, like in the cities, you know, where you

leave, you have to have a job to survive and so on and so forth.

So it's always about protection, right?

You know, that's why the risk takers have been rewarded so handsomely is

it's a counterintuitive thinking. And here,

We're just showing that institutions are, by the conditions of

what they can do in the market with their size and with their regulations,

only can sell at this point.

Imagine if they would be buyers at this point. Then the price would just jump up

so much. Where is the value for them? They will become weak hands.

They cannot do this.

So they're going to sell and take some profits on the positions that maybe they

originated before.

And they're going to scale out.

They're going to take the profit. The composite man is just going to hold on

this. The composite man does not have to sell.

But professionals are going to do the mean reversion trade.

And then the institutional trend followers are going to scale out.

or they're going to start closing out position, just because, and specifically

on bar number 14.

So here is that situation with bar number 13 and how appropriate.

By the way, there is nothing wrong with number 13. I was born on 13, so consider

this a lucky number for me.

So it looks so bullish, and it looks bullish to...

and a maturistic eye on the volume signature as well.

Because, again, where we taught technical analysis, volume needs to

price, and it seems that the increase in the volume signature confirms the

increase in the spread result.

So, therefore, the volume confirms the bullish picture. Then the question by

students that they get, why does the price go down after this?

Well, because what we don't see in this volume signature is the emergence of the

supply and emergence of institutional supply, which is based on the specific

characteristics of the overbought condition and liquidity that the weak

out of the point of excitement, the weak hands provide at this spot to

strong hands.

Rick, are we on the same page here?

Yes, I absolutely love this stuff.

Okay, but are we seeing that supply on bar number 13 is there?

It's emerging, right? And let's actually write down the volume

equation here for bar number 13.

So tell me what I'm writing here. So volume obviously increases a lot. What

demand doing?

Demand is also increasing.

Demand is increasing probably the most, right, because all these weak hands,

they're so excited they're coming in. There are a lot of institutional hands

that are coming in at this position as well.

So demand is increasing a lot. What about supply?

Supply is increasing.

Absolutely.

$4 .15.

Supply is increasing, but demand is still dominant at this point. We see

the close.

It's still a bullish bar.

But because of this increase of the supply, and I've explained

this concept today probably already three times, but it's so

It's so important for us to understand.

that on the volume spike, there's always going to be emergence of the supply.

And we'll have to kind of double -check as to how that's going to unfold.

But this emergence of the supply suggests that this is institutional

and therefore institutions are selling.

And if institutions are selling, then what could we expect, Rick?

Then we're going to be looking bearish.

It should be a price come down.

Stopping, reversal. Stopping action.

And possibly some kind of trading range if we're going to have a stop in

reversal action because we're probably going to encounter some kind of change

character that would suggest a trading range.

Again, it seems like, is it really possible to analyze it like this? I

like, are we looking at the charts and only because we see what has happened,

could...

And now it's like this. Well, obviously, we're going to know at bar number 38 as

to, you know, if we could do this or not.

But even just looking at number 13 and with the knowledge that you have, guys,

right now on how the volume could be interpreted relative to the price,

to the structural context, don't you think that at least you might have a

suspicion?

that such a high level of volume signature might produce a stop in

And it might not be necessarily a distribution.

It just might be a stop in action for a consolidation.

Those could be, you know, the variations on the same.

All right, great.

Eric, one last bar, and then we'll go to someone else.

So bar number 14. Okay.

an extremely huge volume signature that comes.

So I only have probably one question for you, and then we'll go on to

someone else.

So bar number 14 would define which Wyckoff event?

That looks like a hypodermic event right there.

Okay.

probably going to be seen as hypodermic on the intraday level, right? And on the

daily it looks like hypodermic as well. One bar up, speculation on the way up,

urgency to sell on the way down.

Okay, great. But how would we label this area, you know, 13, 14?

Oh, I'd probably label that a selling climax.

It's almost like a selling climax and an automatic reaction in the same bar.

Damn it.

Oh, my gosh. I should have let you go on bar number 13.

Oh.

Oh, hold on a second. Are you talking about bar number 14 as the selling

to the low?

Yeah.

Okay. So to the low, we could potentially say, yeah, it looks like a

climax. But I was asking about this spot.

I was asking about this high. So this we will identify. I was saying that was a

buying climax.

Yeah.

Yeah. So a buying climax. Buying climax and then automatic

reaction. Yeah. Yeah.

Something like that.

Okay, well, really good job, Rick.

So I like how you stop to think.

Because sometimes what I see in students is there is kind of like this first

initial impulse to go to a specific concept right away.

But I like how you think about this and then give the answer. And I think that's

why you went for like 14 out of 15.

So good job.

Well, this is the first time I've ever done bar by bar, but I really like it.

Okay. Excellent.

Excellent. I appreciate it. Thanks so much.

Absolutely. Thank you, Rick.

All right.

Let's go to Ronnie.

Okay. Let's go to Ronnie.

Hi, Ronnie. How are you doing?

Hello. Can you hear me? Yes.

Yes, good connection.

Okay, Rony. So we stopped at bar number 14.

Rick said that this is a buying climax, not a selling climax. Okay, let's not go

into the discussion how we would label this.

There are usually two discussions that I have on the buying climax semantics.

Sometimes people would call it selling climax intentionally.

I think we've talked about that.

And then sometimes, you know, in that.

It comes from Bruce, a buying climax, so this is just not necessary, but that's

okay. He wants to do this, so that's fine.

So if this is a buying climax, let me ask you this question.

Looking at bars number 13 and bar number

14,

Could we speculate about the bias of a trading range that's going to come?

Because we said that bar number 14 looks like a change of character.

And that suggests a trading range. So at this point, bar number 14 and bar

number 13, could we speculate what bias we could have?

Maybe to the downside.

due to the high volume on bar 14?

Yeah. So we would be thinking the downspread

has emerged so much, right? And it just becomes so big.

So the result to the downside has definitely increased a lot. Plus, we've

seen that the volume in general increased a lot.

This is the highest volume signature on the whole chart.

So that suggests an increase, a tremendous increase of the supply.

We're going to come back to the demand in a second. I'm going to ask you the

question now that also would define for us the result.

So we usually talk about the spread. We usually talk about the close.

So the close is also very, very bearish. So this is bearish.

This is bearish.

And then what about the intention?

Right? So we talk about the result. We talk about the spread, close to close,

close to the spread. And then we talk about the intention.

The intention was to do what, by the way?

Looks like the intention was to go lower than the close on bar 12, which it

failed.

Okay. And I would say, and I like that too, you know, bar number 12, close.

makes a lot of sense to me. But also the low of the previous significant bar

right here at 13, right? But they are almost on the same level there.

So that was the intention. It was to commit below.

And look at the effort.

I mean, the effort is just so huge to go to the downside.

Did we?

satisfy the intention?

Did intention come to fruition on bar number 14?

No. No.

So this is an extremely important point, guys.

Even though the effort to the downside has increased so much, look at this bar,

the intention was to commit below a specific level and we

have not done so.

Bullish? Or bearish?

Bullish.

Oh, my gosh.

What looks so bearish suddenly becomes so bullish in

our eyes, in the Wyckoff eyes, in the Wyckoffian eyes.

Obviously, we need to see if there's going to be a continuation.

But we don't see any strong continuation in the bars that come between 15 and

17. All of the bars are just attempts to go lower. All of the bars are attempts

to commit to the downside.

So again, in two bars, bar number 13 and bar number 14,

we are coming to the same scenario where visually we're seeing

one thing, and then analytically, as we think about it, we interpret it in a

completely different way.

And obviously for both scenarios, we need a test.

So don't think linearly that, oh, the bias is defined.

Now we don't have to do anything. No, this is just a bias for now.

This is a bullish bias. This is an assumption that we have, assumption for

trading range bias.

Does that make sense, guys?

Really quickly say yes.

I want to see how you are involved in this discussion.

So we are thinking that the bias is bullish, so therefore we are thinking

reaccumulation. And now, Ronnie, what we're going to do through this whole

trading range, we're just going to confirm this bias.

And if we can't find the confirmation, then we will reverse this bias to

bearish. And if we confirm the bias, then we will be thinking that...

Phase C is going to be the place for us to open the position or to add to the

position.

And then as we see the confirmation of Phase C, we want to be more aggressive

get into position much faster to create more size and so on and so forth.

Okay, so I mentioned really quickly this area between 15 and 17. And I said

that there are a lot of attempts to go down and all of them fail.

Bullish or bearish?

Bullish. Bullish. So I'm kind of looking at this as the whole area, guys, right?

And we could go bar by bar. We could look at bar number 15.

Clearly an attempt to commit below on the intraday level and then failure. And

failure on diminution supply signature.

Next attempt on next bar. Next attempt on this red bar. Next attempt on bar

number 16.

Next attempt on the next bar after 16.

Next small attempt.

around board number 17, and that all happens on the extremely low

volume signature.

So that all suggests a couple of things.

As I mentioned, attempt to go down, failure, absorption of the supply, and a

period that it takes to absorb the supply.

Okay, well, how about a structure, Roni? How would we...

label this trading range, let's say, up to point number 17, and what

phase are we in right now?

I would say around bar 14 was the buying

climax with an automatic reaction.

Okay, to the 15, I would presume, right? Yeah, yeah. Okay.

So that is phase A.

Okay, well, we need a secondary test. Oh, yeah, secondary. Sorry, sorry.

So the next bar is a secondary test?

Yeah, and this is a very interesting idea, what Rony just said.

So we are thinking that maybe the next rally up, and by the way, we had another

rally here, would be a secondary test.

And someone might say, aren't we testing the highs here of the buying climax?

Wouldn't the price have to?

come up so high wouldn't the test will be at point number 19 and I think that

we could definitely think this way knowing what has happened obviously

and it's easier when it happens this way we know that probably the

secondary tests in phase A were kind of like very mediocre attempts to retest

and they just didn't go up up that much. Why? Well, because there is so much

supply on bar number 14.

So a series of secondary tests and the conclusion of phase A is somewhere here.

And then 16 could act as the low in phase B.

So we are in, we concluded A and now we are in phase B.

Okay, so Ronnie, if we are in phase B, then 16 would be labeled as

Secondary tests. Secondary tests. We're testing the levels of supply at the

level of support.

Okay, great. And then point 19 in phase B will be labeled as?

What was that again?

Point number 19 in phase B could be labeled as?

Isn't that a secondary test to the upside?

You could do that. You could say that this is a test of the buying climax,

absolutely.

We would be thinking that there's going to be always an attempt to upthrust,

right? But it fails because this is a low or high, so we could also label this

as failed upthrust.

Okay.

Okay. All right. And then...

Just because we already see the history, where do you think phase C is?

Bar 22.

22, okay. But just one bar?

No, I will have a secondary test of that one. So that would be bar 24.

24, okay.

And where do you think, because we're thinking that phase C for us is all

what? What's the intention behind phase C?

Testing the supply.

of the supply at the level of the support.

And where do you think is the first bar where such test takes place?

Probably bar 21.

Yeah, most likely.

Look at how we are first testing at this level the previous local support here.

That's number one.

Secondly, we're testing the support of bar number 18, which is an extremely

important bar. We're going to come back to that.

And bar number 21 is the first bar that has that test.

So this should be the beginning of phase C with that bar.

And then the conclusion is going to be not at 22, but as Rony has said, some

path connection at 24.

So that would be our phase C, and then obviously everything in between is going

to be phase B.

We'll talk about phase D later on, but Rony, let's come back to

phase B, and specifically I want to talk about bar number

18.

Yeah. So this is like a very bullish bar.

Yeah. And my question to you is, what do you think is happening there? So let's

write the volume equation first.

So the volume is increasing a lot.

Yeah.

What does it mean for the demand?

High demand.

So please note, guys, that this is, at that point of time, the third highest

volume signature.

So a volume spike, so demand is increasing a lot.

And then what do you think supply is doing?

Increasing as well.

Why?

Looking at the tail at the top, it's the supply coming in.

Yes, but the tail is not that big.

Right? I mean, like, this is the tail.

So relative to the whole body of the spread, it still looks extremely

It's in the probably, what, the top 10 % for the spread size.

Okay? So we know that from just the volume increase itself, supply is

increasing.

But I'm going to challenge you and the whole group to give me a different

answer.

How do we define...

the emergence of the supply on this bar, how could we extract this information

from which other source, maybe?

Compared to bar 13?

Oh, so good. And I see here, Nilesh, Nuri

is also suggesting the same thing.

Compared to bar number 13. So, Rony, why would we compare to bar number 13?

It has the same volume signature?

Yeah. It's the analog volume signature. Look at this, guys.

Analog volume signature.

Okay, great. And also, spread -wise, we also have two bullish bars, right?

And they are both expending in the spread. Okay, so if this is bar number

So then let's quickly write the volume equation for bar number 13.

So we have the volume increase.

We have the demand increase, as we said.

And we definitely said that there is supply increase.

Where do you think supply is increasing more? So this is kind of like a tricky

question.

I would think supply is...

Coming in more on bar 18.

Why?

Lower spread.

Yes.

Great. So now I see that you guys are following me. Now I see that you

understand this concept.

Right? What looks so bullish has a hidden gift.

A Trojan horse.

It's hidden inside. It's invisible.

and it's a limitation of the volume as a tool.

We don't see the distinction between supply and demand on this bar. I

like this, a Trojan bearish insight.

I like that very much.

So supply is definitely increasing more on bar number 18 than on

bar number 13. Why? Because the effort is the same.

We see this from the volume signature.

There is no difference in the volume signature, so effort stays the same.

And yet, the result to the upside on bar number 18

is less than the result to the upside on bar number 13.

So that suggests a more bearish scenario, or rather,

more supply available at this point of time. Now, if that's the case, now the

next tricky question, and A for the day, if you're going to get

this, Ronnie, does it mean if supply is increasing on 18 more,

does it mean that the intention behind this whole

swing, swing number eight, to commit above the high of bond number 14 will be

satisfied or not?

No. No.

We could see how we could develop this logic and we could

think if we are in the position, let's say swing position, and maybe we open

position somewhere at the lows.

maybe somewhere here between bar number 16 and 17.

As we see in number 18, we are starting to doubt that we could overcome the

resistance at this point.

So, and we're saying that we need to be probably sellers in this resistance

cluster. By the way, Ronnie, number 18, As it suggests the presence of the

supply, it suggests that we might not overcome the resistance.

Does it also suggest that we still might come into the resistance cluster

between 14 and 13?

And why?

It's still bullish, I would guess, yes.

Yeah, there is still a lot of momentum to the upside.

And that's the whole counterintuitive concept right now.

I talk a lot about this today, but it's such an important concept. If you get

this, I think that your mental thinking is going to be different. You're going

to shift into more of a thinking of how institutions behave.

and therefore you will be more aligned with the market itself.

Because if you think about how the market moves, the market is not the

itself. The market is comprised of so many people, and all of them are just

basically with their buys and sells, give their opinion on what the market

should do at one point or another.

In some instances, we might be seeing a lot of bullish activity, but on the

background, there's going to be already some of the distribution that's going to

happen. And therefore, when institutions provide this type of behaviors, they

are the ones that are basically creating the whole market structure.

They are creating the swings to the upside, to the downside, and then in

between, there are some market participants that either provide at

to those larger institutions, or they are able to move the price at certain

spots where composite man is not that available and

inactive. And we are just following that footstep. We are following that way of

thinking. And the closer we are to that way of thinking, the more in line we are

with the market movement itself.

All right.

Ronnie, really good analysis here with the suggestion that, yes, we're going to

come into the zone. And now let's look at the comparison between bars number 18

and 19.

So let's talk about the effort on bar number 19, obviously to the upside.

And look at this effort increase.

Yeah, it's the highest ever.

So far in the range.

Absolutely. And it comes at the point of resistance here, right? So the

up result for this bar is doing what?

I can repeat. You kind of cut out.

Okay. So what is the result for bar number 19?

It's closing roughly almost to the 50%, the

19.

Spread is comparable to bar 18?

I would say dimension.

Yeah, dimension.

I mean, yeah, slightly dimension.

So let's just write this down. So spread on the 19, slightly dimension.

You set the close to the spread.

It's slightly bearish because it's...

Closer to one half, as you said.

So diminution spread also varies.

And the closing price looks like it's the same as the closing price on bar 13.

Yes. So close to close from 18 to 19. There is no such progression as we've

before from, let's say, 17 .5 to 18. So there is diminution upthrust.

on the close but also a great comment by by ronnie look at the close at bar

number 13.

so instead of closing above this we're kind of like resting on the same level

and that happens even on the uh higher larger effort signature uh which

that supply is just so present at this point so close to close bearish and then

ronnie what was the intention behind Bar number 19.

To commit above bar 14?

Absolutely, and we obviously did not do this, so no. Again, very bearish. So

everything in the result looks bearish, bearish, bearish, and that's on the

increased effort signature, which we said has been increased, significant

increase in the supply.

What can we expect, Rania, from bar number 19?

What should come next?

Lower price.

Yeah, we should have some kind of reaction.

Now we're thinking in terms of our structure.

If we're going to have some kind of reaction in phase B, and we had a

test at the support level, now test at the resistance

level in phase B, so then the next reaction is going to go where?

Into potential phase C?

Yeah. Yeah.

And that's how we are combining the volume and spread analysis with the

structural analysis, right? So we're always going to be thinking local

And here we're going to say we see how this local picture becomes bearish.

And then in the global,

picture we're going to say this happens in phase b so therefore we are

that reaction that we're going to have might be the reaction into phase c now

confirm this we need to see third test

we need to see second point of fear and we also

would love to see

And this is something that we will study next time. We're going to talk about

phase volume analysis. We want to see the volume signature to diminish into

phase C.

And, Ronnie, would you say that we have all three of those?

Yeah.

Yeah, so we are confirming phase C in that way.

Okay, great.

What else is interesting here?

So bar number 21, some additional characteristics. The volume signature

increased here.

And then what does that suggest, Ron?

Increase in supply.

Supply has increased, yes.

What about demand?

Slightly. Well, compared to supply, it's down.

It's smaller compared to the supply because supply still dominates the

We closed down.

But did demand increase or decrease on that bar?

Decrease. What did you say?

Decrease, down, slightly down.

I would say that probably it's up.

And the reason why is because let's just look at the intraday picture and blow

it up. So we have the previous close.

So close there. And then we have a gap down.

So gap down.

So that suggests what kind of intraday first move,

what do you think?

To the upside or to the downside?

Probably to the upside, maybe, or no, downside.

Yeah, probably to the downside. So let's kind of like put the logic behind this

assumption. And then again, we might be wrong, but we will be right more time

about this assumption than wrong.

So the logic here is that with the gap down, momentum is to the upside or to

downside?

Downside.

Momentum increases to the downside.

And then also contextually for the whole swing. Are we in the upswing or the

downswing?

Downswing. So the momentum is still and the bias is still to the downside. So

most likely after the open, we are continuing with momentum to the

Then we're coming up back and we are rallying.

up to the what maybe the high of the previous bar so we overcome in the

close and then we are selling off well actually should we do this a little bit

lower like this like this and then we slightly closing lower than the open

so this is the actual let me redraw a little bit here

okay so here's the intraday action

So we're seeing that, yes,

there is some supply that is increasing. There is some supply at the end of the

session. But we also see some demand.

I mean, look at this intraday rally that we have had. It has closed the gap

down. So most likely that happens on the increased demand signature.

We also could conclude that the demand is increasing at this point by the way

how the tail looks and with that increase.

you know volume overall increase of volume signature so that would suggest

demand is increasing but if we're not sure think about the intraday and think

about what kind of rallies and reactions we have there ronnie what do you think

uh what do you mean well are

we you know are we getting all of this yeah yeah yeah yeah yeah okay good good

so we're shooting for 15 out of 15 here, so.

All right.

Okay, so next point.

So this looks like demand on 21 is coming in. And it also stops the price

moving further down.

So kind of suggest a local stop in action.

So imagine if this is a selling climax.

Automatic rally, secondary test, phase B, phase C.

So we, on the intraday level, could probably figure

out the phases here for this trading range and try to enter right there.

Okay, so if you are an advanced trader and you have time to follow the intraday

structure, then we could definitely do that.

Through this structure or through this reaction from 19 to 24.

What is happening with supply?

Diminishing with a local spike at 21.

Yeah, so highest supply was at 18 and 19.

And then to the downside, yes, this is where supply has increased and

demand came in and absorbed it. And then we're seeing how drastically.

supply diminishes throughout the whole structure.

Meanwhile, within this structure, what do we do?

And looking at where we are, we are making a higher low at the 24.

We are making an intermediate high at 23.

And so this is intermediate high.

And that's on the background of diminishing supply signature.

So these are the characteristics that we have seen somewhere prior to that,

right? So we've seen it probably somewhere here.

Look at how supply diminishes, how it goes and diminishes into phase C.

And we're starting to have higher lows and then higher highs, intermediate

higher highs.

So out of...

Point number nine and ten, we had a very robust rally.

So now that we've seen this action again, and we are suspecting that this

phase C, what kind of character of a move we could expect

relative to what we've had on swing number six?

Should be bigger.

Yeah, should be bigger, right?

We're thinking that, well, first of all, causality here is much more of what

we've seen in this area right here.

Secondly, it seems that there's some institutional accumulation that we've

on the way up.

So if this is a CEO type of accumulation, which it is, then we

would be thinking that they are not going to sell in this trading range.

and then the price is still going to go higher.

We're also seeing that by the analog that we are going to have some kind of

rally. We're just thinking of which character, which type.

We're probably still a little bit conscious and suspicious about the

that's coming in at 14, 18, 19.

So in phase C, we know that Somewhere in the future, we will have to overcome

this area.

So therefore, we are expecting supply to come

to emerge at the point of the resistance.

Now, this idea suggests that still duration is going to increase.

If duration is going to increase, then the cause is going to increase.

and then our targets are probably going to increase, and we're probably going to

have, you know, a better rally in terms of how much it rallies distance -wise

or the way of how it rallies.

And we probably could see this one, two, three, four, five, five and a half

maybe.

So one, two, three, four, five, five and a half. So this is the distance that we

would be expecting, one -to -one distance.

if we would be comparing this type of rallies to each other.

But as Ronja said, we're expecting a better rally, so the betterness of the

rally could come in the extra distance that it could travel, and we see that

there is actually some extra distance that has been traveled. So that's one of

the things that we could always consider when we're discussing the character.

Okay. And we said that we are expecting supply to emerge around the

resistance area as the price is going to come to the point of the resistance.

And that's going to be a test.

Okay, well, Ronnie, let's talk about that emergence of the

supply at the resistance.

So let's talk about first...

Let's talk about bar number 24 because this

is where the story starts for that supply.

So 24 is a very interesting bar because it's not necessarily a

very kind of like attention calling on itself bar, right?

Kind of like a medium -sized spread to the upside, medium -sized volume bar.

But what do you think is significant about this bar?

Is there anything that we could extract as the information on the confirmation

of the bias or what should happen next? Or how would we compare this bar to

maybe previous bars?

Compared to the volume on previous bars, it's almost half.

So it has a much easier movement to the upside.

So the volume signature is somewhat average.

Okay. And then on this average volume signature, what kind of result do we

Well, we also kind of get, you know, average bullish results.

Why average bullish? Well, because it's not as big as other bars. So let's say,

look at bar number 20.

Look at bar number 18.

Look at bar number 13.

You know, those are the bars in the same area. They are at the same price level.

So 24 is definitely the smallest out of them all.

But then there is a very interesting, significant development here with the

volume signature.

Look at how the effort is so low, and yet we are...

capable of producing almost the same result as a 24.

again effort on bar number 24 is

the lowest among all of these bars and let me just highlight

them all so that you would visually see them better okay so all

of these bars And then we're seeing how the effort is the lowest, yet

result is almost the same

as bar number 23.

So 23 is a good analog bar for us.

So, Rony, what does that suggest?

You know, effort is the lowest and result is almost the same.

Bullish. Bullish, and then how else would we call this type of ability

of the price to travel on diminishing effort in the direction of the bias?

Ease of movement.

Ease of movement, absolutely, yeah.

So it's an ease of movement, and ease of movement confirms the bullish

bias.

Okay, great.

So then next bar.

Bar number 25.

So this is an interesting bar. We talked about the resistance cluster.

So let's talk about the effort for bar number

25.

Up. Volume is almost three times higher than bar 24.

Yes. And, you know, the BART24 was kind of like average bullish suggested to

move to the upside.

That move suggested that we're going to retest the resistance.

And by the way, the next question I want you to think about this as we're

talking about something else.

Bar number 24 suggested not only that we're going to test the resistance, but

might actually overcome it. So the question is why?

So think about that for a second.

But meanwhile, let's compare the effort of bar number 24 to the

analog efforts of the bars that were in the same position. So what would be the

analog bar for bar number 25?

19. 19. Why 19 is the bar with the same intention?

Was that a question? Yes. Why is bar 19 a bar

with the same intention as bar number 25?

try to overcome the resistance from bar 14?

Yeah, it's the same price action. We are trying to commit above the resistance,

therefore suggesting that we could overcome the supply that is present at

horizontal level of the bar 13, 14.

So this cluster right here.

So okay, great.

So effort at bar number 25 compared to the

compared to the effort at bar number 19, has done what?

Slightly lower.

I would say that somewhat significantly lower. Well, I mean like significantly

lower by maybe 30 % or so, right?

So minus 30%. So that's probably a considerable drop. So we could say that

24 is definitely lower.

Then effort at 25 is lower than effort at 19. And then the result at

25 relative to the result at 19 is?

Much higher spread.

Much better, right? So let's go through this.

Spread to the upside is better, increased.

Definitely better. Okay.

Close relative to the spread.

Slightly above half of the range.

And, you know, we might end up kind of like in the same type of percentile,

right? So on both bars, we are above one half, I would say, and we're probably

percentile the same. So let's just put it the same. Okay, close to close?

Much higher.

Yeah, so we are looking at the progression from one close to another,

close to another.

Definitely much better for bond number 25.

Okay, and then intention.

And here we're going to be doing two things.

So the first is the intention. Has it been fulfilled for bond number 25?

No. No. Now the second question that I'm going to ask you.

In terms of the result for the intention that we have had, is bar number

25 has failed on the

intention, you know, how would I phrase it? Is it the better, is it the closer

to the success to fulfill this intention on bar number 25

than on bar number 19?

Yes, it's closing right at the resistance line. Yeah.

It's a higher spread.

Let me kind of ask you in a different way so that everybody would understand

broken English here.

We want to, because the intention is the same, we want to understand what is the

result.

How close to the...

final implementation of this intention have we come on bar number 25.

And it seems like the close is at least on the first resistance level.

So it's much better than the close of bar number 19.

Also, what can we say about the actual tail?

On bar number 19, the tail does not touch the highest resistance. On bar

25, not only it touches, it actually overcomes it.

And then on the intraday level, tries to commit above and to stay there.

And then it fails back into the trading range.

So bar number 25 is behaving better on the intention

than bar number 19.

So we're seeing that we have a lot of bullish indications for bar number 25.

Spread is better.

Close to close is better.

And then intention -wise, we almost were there.

So looking at all of this, Ronnie, is bar number 25

more bullish than bar 19?

Yes.

Okay, more bullish.

And this means what relative to the whole structure?

Because if 19 was an attempt to overcome the resistance and 25 is better, doing

better than that, then what does it mean for the breakout?

It's closer.

It's closer, except when you're now, right? So it might be, you know,

supply is coming in, it's less.

And for the first time, we were able to overcome the resistance, which is a big

deal. So if we are, you know, going to have a true breakout, it's very close.

So we are...

probably thinking that our definition of phase C is actually correct because

phase C defines the timing for us of when the price is gonna start leaving

trading range first, going through the whole trading range and above the

resistance. Okay, great.

Well, we know that the, by the way, guys, one of the ways to look at the

commitment on bond number 25, so I'm looking at this cluster right here.

And we're seeing how the price is, the close is definitely below that

level. But we also can have a sloping down resistance based on

more of the apex action structure, something like this.

And then we see how there is a commitment to the upside just based on

then look, this is definitely this apex structure.

that we've mentioned a lot.

Okay, let's talk about bar number 26.

This is the bar, Ronnie, that produces a lot of questions from students.

This is the second highest volume signature on the down bar

so far. The previous one was at bar number 14.

So the biggest question that I get usually goes like this.

Roman, I got into the position at 16 and 22, and then I saw bar number

26. Bar number 26 has the volume increase, or

rather than the volume increase, had supply increase relative to the previous

point of the supply.

that we've discussed before there is only one bar that is higher as a down

so i sold this position right there because i thought that this is the

increase at the level of the resistance and uh therefore a distribution is going

to take place ronnie what is wrong with that thinking

um

Looks like the bar maybe was trying to get lower than the high of about 23.

Okay, yes.

Another level here is the low of bar number 25 because that's the previous

significant bar to the upside, right? So that's where we have the commitment.

And the close is not committing below any of these two levels.

There is an attempt.

It goes in between, kind of like goes to one half of this area, and then it

springs up again and comes back above the level of bar number 23.

So what does that suggest on such emergence of the supply, Ronnie?

Demand is coming in.

Yeah, so there is some demand.

Result to the downside is diminishing.

The intention is not... fulfilled at all.

We did not commit below the levels that we wanted.

So therefore, we are thinking, why is it that we are not, as

Eric is saying here, in sync between the effort and the result? Well, because

there is an opposing force, which is demand, increasing demand, that comes in

this point, and all of this supply is being observed.

Now, think of this concept in a different way.

Think of this concept as the value zone where institutions are buying, right?

So even though the weak hands, institutional hands, might be buying on

number 13, but now bar number 13 and bar number 14 define that value zone

for us, for this particular structure.

And anything above point number 14 will be an overbought condition,

and therefore professionals here are going to

conduct the mean reversion trade because in the overbought condition,

they would be thinking that there's going to be a reversion to a mean, and

therefore there's going to be some kind of trade.

They've done this trade at point number 19 already.

why wouldn't it work at 0 .25?

So that supply that comes in is that professional mean reversion trade.

And that's why supply increases.

Now, as the price goes down, look how it goes into

the institutional value zone, just because the

bias is to the upside. And anything in the zone, institutions will be buying.

And they are buying, you know, institutions were rotationally buying on

number 13, 14.

Those weekends that we're selling, Composite Man was picking up on the

liquidity, a lot of the stocks.

Then there was, so let's just do this.

CEO rotationally, rotation.

rotational accumulation and now it's at the high level this

is institutional trend followers are trying to get in into this position and

they're coming in heavy and then you know a

professional such as selling into this as they sold into this area. So

professionals are doing mean reversion trade in all of the three places.

And look at how the first time the mean reversion trade produced the largest

reaction, then a smaller reaction, and then even smaller reaction.

And that's on the background of

somewhat diminishing effort.

and the result is diminishing.

So what is going on?

Well, they are absorbing the shares at this level, then at this level, and then

at a higher level.

By itself, the absorption at a

higher level suggests what, Ronnie?

Roni, are you there?

Yep. Yeah. So absorption at the higher level now suggests what?

Higher demand?

Not necessarily higher demand. Demand might be actually lower. I mean, the

highest demand was somewhere here at the 13, 14.

Sorry,

the value zone has changed.

Yeah. So the value zone is changing. That's number one.

Institutions are seeing value at higher price.

This suggests a confirmation of up bias

and suggests that the move, the rally,

is underway.

And the breakout is going to start right now.

And here we go.

We are observing the supply that is emerging at the higher level, and it's

almost like a staircase.

You kind of have to observe the supply at different price levels, right? So

observing the supply somewhere here, here, and then we're observing at the

higher level.

Once the absorption has been completed at the higher level, now we could freely

move to the upside.

And now the price is going to go up.

in a much better, more kind of like controlled way where supply is not going

be a problem anymore. Why? Well, because all of the supply that has been at this

level has been observed and all of the price levels have been tested.

Okay, great.

Let's see what time we have.

So let's conclude this whole thing.

Rony, thank you so much.

You're welcome.

All right. Now let's go quickly say yes again because I don't remember who

said yes to volunteer, and we're just going to conclude this. While you're

thinking about this, guys, let me just go to the next bar, number 27.

Here's that volume signature right here.

So here we are thinking about comparing it to 25.

And even though the spread is diminishing, but look at the close.

It's much better. It's actually the highest close so far in this trading

We had the close at 13, 19, then 25.

So we have the progression of the closes at the point of the resistance.

that suggests that after 25 and 27, we're probably going to go up and we're

going to have this continuation to the upside.

It also happens on the smaller volume signature, on dimension volume

So a much better result

on

Lower effort suggests not just bullish

picture, but also suggests ease of movement. And ease of movement starts to

appear when supply is poor.

And if supply is poor, then the rally is happening now.

Okay, and we'll talk about, you know, how we would trade about this maybe

on, maybe next time. But 27 confirms that we're about to go up, that we're

likely going to overcome 25. We do on bar number 28.

Now, 28 has very interesting characteristics because the volume has

And that suggests that that supply has increased.

Also, we see that slightly the spread.

has diminished ever slightly relative to 27.

What does that suggest?

Well, that suggests that on the increase in effort signature and emergent supply

and diminishing result, we're going to have some kind of short -term reaction.

This reaction, we are not expecting that there's going to be a very big

reaction. We're expecting that supply signature is going to be lower than on

number 26.

just because supply has been observed in this area and supply is diminishing.

We're also expecting that maybe a reaction by itself is not going to be as

Well, it was definitely probably in line with what we've seen after the 25,

but slightly less.

So 28 to 29 is slightly or equal to

25.

And what else we could say is that sometimes look at the

reaction through the closes, right? So from the top

to the lowest close right here.

From the top to the lowest close right here. So that shows you the commitment

of professionals as to where they're going to...

you know stop selling and um the levels of where the buying the buying is going

to bring it on the down bars so much better picture plus we're thinking that

okay this is phase c we've just committed to the upside minor sign of

major sign of strength and then the backing up action we are concluding

here and now we're gonna go into phase e where we're gonna um

travel more freely. And actually, the final absorption of the

supply, and we see how supply has diminished, this suggests the timing by

itself.

Timing for what?

Timing for up move without

a lot of supply.

And if that's the case, then we could be expecting that the character with which

the price is going to move, just because supply has been exhausted, is going to

be acceleration.

This means that we're going to have the spread increase.

We're going to have momentum increase.

We're going to have velocity increase.

and we're going to probably have the volume increase as well.

Why? Why would the volume signature increase?

Well, again, we are coming out of the formation, so the weak hands are going

become very excited.

Oh, boy.

If the weak hands are excited, there are a couple of things that we should be

thinking here. If weak hands are excited and they are providing liquidity,

then strong hands could come and sell.

And usually this type of action is going to be associated with what? With the

climactic run.

I do not know what is going to happen at this point if I don't look at the chart

the way how we look here.

But I could deduct as to what possibly could happen.

what possible character we're going to have as the price moves up.

And here we go. We're definitely doing exactly that.

Supply is diminishing in this area. We are above the area of the resistance

after the major sign of strength on the backing up action.

Now there is no resistance. There is no supply.

So the next thing that's going to happen is momentum is going to come in heavy.

And that's going to increase the velocity of the price to the upside.

And that's going to be on the background of weak hands buying at this point of

time. Usually weak hands buying on the point of excitement in the uptrend,

is going to be defined as the first point of excitement, most likely on the

climactic action.

And always when weak hands are buying on that first point of excitement, That

will define the value zone for weekends.

This is where they will be always biased. They will be thinking about

here, and then when the price gives them the value, they're going to buy again.

They're going to buy again, something like that.

Okay, so 31 is interesting because

of the volume signature.

it's huge it's the largest volume signature than we've seen um uh from

bars and this is what one two three four um

uh out of the five areas five volume

signatures this is the highest and obviously a very bullish bar again

this is probably the same of today's class and i want to see this in

your notes how does this bar bar number 31 look to you

doesn't it look so bullish big spread new

high uptrend conventional t

volume increase in the direction of the bias confirms that bias

And yet, look what happens next.

I want you to think about this over this week.

And think about why we're doing this work on volume and spread analysis.

What looks so bullish is hiding a secret, a Trojan

horse.

It's hiding the presence of institutional selling.

And we only know this because the volume increase, the volume spike,

suggests that in the direction of the bias, the force is increasing.

But so is the opposite force just because of how large this volume

If all of this would be demand, what would happen?

We would go to the moon here.

Because there would be fewer sellers.

And the buyers would dominate in a very extreme way.

So we're not doing that. We're not going to the moon here. Yes, the move is

quick. The move is big.

But it doesn't mean that it's all demand.

There is some selling that is happening, and this is an institutional signature

here. If this selling is emerging at this level, institutional selling, that

then we could be expecting a stop in action, not necessarily right on that

but in the area, reversal.

And with that, a possible change of character, which could lead to a trading

range.

And in the trading range, we will have to go again through the bias analysis.

But at least we are thinking that if we are in a trade, we are somewhere close

to the intermediate stop in action.

And bar number 32 starts to confirm that because the effort of bar number 32,

it's still a very high effort looking at all of the bars that we've seen before.

So we probably would be thinking that the effort on bar 32, even though it's

diminishing relative to bar number 31, but we're also seeing that the

result at 32 is much less than at 31.

How do we see this? Well, the spread is diminishing. The close -to -close is

much more mediocre than at 31.

The intention was committed above. We did this, but marginally.

Not a lot of clothes above the level of the resistance.

So that suggests some kind of weakness and suggests some kind of

bearishness that might come. So suggest a reaction.

So with the reaction in the next class, and I'm going to stop here,

it suggests on the reaction.

We need to make sure that we judge the character of the reaction and we

understand at least we could speculate what kind of buys we're going to have

this trading range and so on and so forth.

Bar number 33 confirms that supply is increasing,

confirms that we're going to have a reaction.

And at this point, If you are a long -term investor, then you're thinking

about maybe hedging.

If you're a short -term trader, then you're just out of the position.

That's it. You might be also originating some short positions for short -term

trades because your target is going to be somewhere at the bottom.

of this uh barnabas 31 all right guys so um let's stop

here for today um let's review the homework so the homework

is gonna be of two parts watch

this video again and secondly i want to receive

your exercise notes

So this is what we're looking for.

And if you have time, be serious about this assignment.

I want you to get into it. I want you to stop the recording

and put those notes in.

Go through the analysis again. It's going to be extremely helpful.

I know it's really tedious.

I know it.

You know, it's kind of like the thing that in order for you to gain a momentum

with your analysis, you have to be extremely slow at the beginning because

really, really have to understand it and see the concepts on the chart.

Okay, so that's homework.

What else?

What else I wanted to say? Oh, yeah, some comments and questions.

Okay.

Okay, so from Nailash.

Okay, bar number 18.

And we went through this, but let's just confirm this. Short -term bullish.

Yes.

There's still a lot of momentum that's going to carry us into the cluster.

And then,

short -term bullish, long -term bearish. Not necessarily long -term bearish,

right? Because we're thinking, what is the bias here?

So the long -term bias is going to be related to the whole structure, right?

that's why long -term.

The short -term is related more to the swings.

So when we say that supply is coming in here, we know that the short -term bias

is going to be bearish.

And then the long -term bias that relates to the whole structure is still

bullish because we're thinking that this was bullish, this was bullish, and then

a possible next reaction could be bullish.

Would we add or enter position on bar number 27?

And this question comes also from LH. Yeah.

Yeah, this is a good place to initiate the position. So our places to initiate

the positions are going to be bar number 23, 24, 26,

27.

The bar is 29, 30.

And that's about it.

So quite a few spots here where we could open the position.

Okay, on a reaction such as 25 and 26, compared

to 28 to the following low, could we conclude similar result,

but actually greater volume since the volume of the two bars is greater than

volume than the single bar from L? So we are looking at maybe

this.

against this.

So the volume signature diminishes.

And I'm not taking this bar into the account, although I probably should

some supply is coming in here.

Okay, so maybe like all of this. So we would have to look at the cumulative

volume on those two reactions.

To me, just visually, kind of like look at the down bars.

and the volume signature there. So to me, this is a significant decrease.

So even though some saline comes on 28, 28 .5, you

know, still that signature goes down and goes down rapidly

and significantly. So it looks very bullish on that second reaction.

Would CO also be selling in each of points of excitement, or is it only

institutional strong hands?

Yes, CO definitely has an agenda to unload

their positions at the most opportunistic times. And the most

times are going to be the times where liquidity is going to be the highest.

So this is where they usually scale out, take profits, and then if

distribution is going to happen, you're going to see it in a specific way. So

you're going to see the increase of the supply signature, you're going to see

the consistency of the supply, and you're going to see that the result is

actually following that increase of effort to the downside.

But yes, CO definitely would.

try to sell in the points of excitement because points of excitement, excitement

always provide that liquidity.

Roman, from 33 to 35, can you reduce the bias?

It's time the bulls want to go upstream, so selling appearances is a

distribution. All right, Eric, well, definitely a good question. Let's just

discuss it next time. And as an assignment, definitely analyze this area

here and just to go with our spreadsheet here

and analyze this area and come to the next class prepared

to discuss this area.

So let's leave it for then.

Okay, Rick is saying, thanks for the bar -by -bar analysis.

This is really starting to all come together.

I'm glad to hear that because I know from my experience with, you know,

doing this by myself or, you know, working with students' traders, it takes

time. You first have to reverse your thinking.

That's number one. And then after you understand the concept, then you have to

practice. Once you practice this enough, believe me, this becomes a second

nature, and you kind of see those concepts much faster.

All right.

Do you ever employ the WISE wave to analyze and compare twins?

Yes, absolutely. I actually do have David's software, so we're talking about

David WISE.

You could find this plugin on his website. I'm not sure if you

could do this for all of the software packages, but

at least on TradeStation you can. I know, I think MetaTrader or some other

platforms where he sells his products. I would definitely

recommend this.

I also believe that cumulative volume, you also, in some of the software, it

becomes almost like a standard now, so standard feature. So I just would look

into that as well. But, yeah, go to David's website. Anything that David

produces, I definitely recommend. And you guys know me. I don't really.

care about the competition among, you know, Wyckoff teachers and all this

It just all kind of like sounds unreasonable to me.

You either know the stuff or you don't.

So David is one of those

big titans in the method, right? So we had Wyckoff himself.

Then we had Bob Evans.

Then we had SMI with the series of...

teachers there. Then we had, you know, big four names

in the 70s, 80s, 90s, 2000s and up to present, you know, some of them.

We had Tom Williams.

Tom Williams has passed away and his field was BSA.

He wrote a book that usually students have a little bit of a hard time, you

know, to read.

So maybe not a really good adaptation.

But still, I would, you know, if you're a true white coffin, I would definitely

have that.

Then we had Craig Schroeder.

And Craig Schroeder was, for a long time,

the...

as my contributor, as my principal teacher,

and he has developed quite a lot of concepts.

Then we also have had Hank Pruden.

And Hank was really big on structural analysis.

And PNF.

And then we have,

we still have, and this is the only person.

Well, actually, I'm not sure about Craig. Craig is, I think Craig is still

alive.

So David Wise is definitely still around. So David Wise, you know, on

BSA, Volume, and

Sprint's up for us.

So David has done so much work on this. So those are kind of like the four big

names for the last 30, 40 years that you could go

to these people and study their work, and it's all going to be complementary.

And then after that, obviously, next generations that came, you know, Bruce,

myself. This is from Hank.

So this is GGU.

And then from SMI, we have Todd

Butterfield.

So Todd is doing a lot on the cryptocurrencies right now, has a

live session. And then on Tom Williams' side, BSA,

we have Anna Kulin.

And it's all where Tom Williams lived, you know, in the UK, Anna Cullen,

then Gavin Holmes, Peter Fritzen,

and then on,

so who else is left?

Tom Williams, SMI, Hank.

Yeah, and David Wise followers you

know as Gary Dayton and

Gary Fuller.

And all three have presented at Wyckoff Analytics events.

Todd has been a big friend.

Gary and both Gary have presented.

Gary Fuller just recently.

David Wise has been at the West of Wyckoff.

So I'm still trying to get Anna and Peter, you know, to come to our

and just present.

So that's kind of like a history. And if I would put, you know, something

before. So Wyckoff himself.

Then Bob Evans.

as a part of the SMI, and then everyone else, and then correct short, and so on

and so forth.

Okay, we can say professor is enough for now. Okay, great.

Yeah, we're going to stop here. So three hours, that's too much.

All right, guys, good class.

I wanted to go into a lot of detail in this class.

I wanted us...

to practice the counterintuitive read on the bars, and hopefully

we've done so.

So go practice.

Send me your homework.

Watch this recording again. Make notes.

And that's going to be your best practice. And I'll see you guys next

the 25th. Thank you guys so much.

All right.

Bye -bye, guys.