All language subtitles for Session 10-WTC (Mar 11, 2019)

Hello, everyone. Today is March 11th,
and this is our session number 10 of the

Wyckoff Trading Course.

And today we're going to continue with
the exercise on volume and

price. This is what I call a systematic
exercise. What do I mean by that?

It systematizes a lot of the knowledge
that we already have, and it combines

actually not just the volume and price
analysis, but also the price structural

analysis as well. So that's why I call
this a systematic exercise.

Our next session next week, March 18th,
and we're going to finish

this exercise in the next session.

And then session number 12, 13, 14, and
15 are going to be devoted to two

things. We're going to talk about
relative and comparative strength

We'll talk about some of the filtering.

We'll talk about a Wyckoff trading plan.

We'll talk about some of the tactics.

And I'll introduce some of the concepts
that are going to be a breach concepts

into

into the WICAV practicum.

That, by the way, is gonna start, WICAV
practicum is gonna start on

the 22nd of April. Our last session

of this class.

So WTC is gonna end on April 15th.

This is session number 15.

And then from here, for those of you
who's gonna take the practicum, we're

stay on Mondays for the practicum. I'm
just changing a little bit the schedule.

So the practicum is gonna start on April

22nd.

A couple of things with the practicum.
First of all, let's talk about the price

and let's talk about why the price is
such.

So the price for you guys is going to be
$598.

So usually it's $998 because we're going
to have nine sessions there only.

And I would encourage you to take
advantage of this opportunity because

it's 15 sessions. So for those of you
who feel like, well, it's just a lot of

time.

This is definitely better, nine
sessions, and we're going to do two and

hours each.

So kind of like the same as we're doing
this class.

But what happened with practicum is
there's so much knowledge in the way of

trading course that I can't give you
even with 15 sessions.

Knowledge requires practice.

and we're just trying to practice with
this exercise as much as possible, and

I'm still delivering you more and more
knowledge.

So practicum was designed for the drill
exercise, but I'm realizing that

having the lecture portion of the
practicum and then the drill exercises

second part of the class works much
better for students. So this is exactly

I've been doing this cycle, this current
cycle.

for WTC students who have taken the
class in fall.

So quite a lot of new things here. First
of all, the price.

This is grade nine session instead of
15.

And then we're still staying on Mondays.

So your schedule for classes is not
going to change.

If you have Mondays devoted to this
course, then...

You're just going to proceed with the
Mondays, and we're going to finish that

course, the practicum. The last session
is going to be on June 17th.

And, by the way, you can register now.
And I don't know why I didn't put this

an announcement, so maybe next time I'm
going to start putting this.

So you can register now. Go to our
website.

Find the Wyckoff Practicum course and
sign up because

one of the things that I've noticed with
students throughout all of these

cycles, and I got to calculate how many
cycles I have actually done with this

course, but definitely 20 plus, maybe
even more.

When students go away, they're kind of
excited.

Now I'm going to... put this into the
action and I'm just going to start

using this and by all means please do
because it's going to show you

both it's going to show you the
improvement that you've made over the

and then it will show you what else you
need to know so I think that it's

extremely important you know to have
some kind of exposure

to the market.

My only advice with that is expose
yourself gradually, right? So this

apply gradually.

Seek confirmation that you know and that
you could implement this.

All right, so that's that.

And what else? For those of you who...

I'm not signed up for Linda's Reschke
much special. You can still do this.

Again, go to our website and sign up.
You still can receive all of the

recordings and the slides. We just had a
session on Thursday that went really

well, and we had really good feedback.

Now, Linda is not necessarily teaching
us Wyckoff method, but she's teaching us

trading.

And the main thing with Linda and the
whole special is just to listen to her,

kind of be in the presence of this
greatness and try to extract as many

beliefs about trading and markets and
how to behave in markets correctly.

So extract those ideas as much as
possible.

All right, a couple of questions. Will
nine sessions cover the same content

is usually part of the Wyckoff
Practicum? Yeah, it is Practicum, and it

cover the same material, and not
necessarily the same because I'm always

changing, always adding, always thinking
about, you know, what is the best

exercise at this point, and so on and so
forth.

So the Practicum is a very interesting
being. You know, it just kind of

develops.

in the relationship to the group itself.

So we'll just have to see this, but it's
definitely gonna be more of a feel of

the Wyckoff Triggin course, rather than
the practicum as it was, let's say, a

year or two ago.

But we still will be doing exercise in
each class. So each class, I'm gonna

have a chart for you where I'm asking
you specific questions. Define the bias.

Define the selection.

Define the character.

And so on and so forth. That's the
purpose of that class.

Will September's cycle of practicum
course have 15 sessions and will it be

conducted on Tuesday from Roma?

Yeah, most likely that's how it's going
to be, 15 sessions. And then this

is probably going to be the last cycle
of practicum that we have.

Because starting with January of 2020,
we're going to have Wyckoff Trading

Course Part 1, the one that you're
taking right now, and Wyckoff Trading

Part 2, which was a practicum before,
but it's going to be more cohesive and

it's going to be more comprehensive for
all of the 30 sessions, two parts,

Part 1, Part 2. So I think this is where
we're going with that.

Another quick announcement.

For those of you who are going to repeat
this course during summer, so for those

of you who is going to sign up for WTC
summer cycle,

and I would

highly recommend it if you feel that you
like the course, but you need a

little bit more time. to get comfortable
with ideas.

And you need maybe a second rerun just
to repeat this knowledge and

cement it in your head.

And this is such a great idea and we
have alumni of this course in this cycle

well.

So for the summer cycle, the alumni rate

is

And this is going to be only 12
sessions.

And usually during summer, that's what
we do. I don't teach the full course.

It's kind of like an abbreviated version
just because some people are much

busier and this is just our opportunity
to give them that chance to participate.

So 12 sessions at two and a half hours.

The price for the alumni rate, so the
regular rate is $7

.98.

And then the alumni rate is going to be
$4 .98.

So really good discount, right?

Obviously, not as many sessions.

But on the top of this,

We have currently a promotion that is
running until

March 20th.

If you register for the course and you
email us after your registration

to WyckoffAssociates at gmail .com and
you say that

in the title WTC promo,

then we're going to rebate you $100
back.

So effectively, your price could be $398
for a

repeat of this course.

So think about this. I kind of wanted to
create a very appealing value.

It seems like it's such a low price, but
I wanted that value to be available to

you, for those of you who have taken the
class in this cycle.

and you feel like you want to repeat it,
go for it.

You know, this is one of the ways to do
this. If you feel more comfortable, go

for the practicum, because this is the
next step.

And then, if you have any questions,
obviously, just email me, ask me, and

be happy to answer.

Okay.

Let me just do this, otherwise I will
forget.

Okay, now I can erase this.

All right, so today as I mentioned, you
know, we're going to continue with the

group exercise.

Then we're going to continue with some
of the OEM case studies. This is

going to come before the exercise.

The homework is going to be the same.

I kind of see a little bit of the
deterioration of the

participation in the homework.

So I'm still receiving homeworks, but
not as many as in the first months, not

many as in the first couple of sessions
on this exercise.

So I want to encourage you to go back,
re -watch those videos where we discuss

the exercise.

make notes, email those to me.

This is definitely gonna be very
beneficial for your development, for

knowledge development.

Session number 11, next session,
basically the same. We're gonna finish

exercise. This is gonna be the main
purpose of that class.

If there is anything left on volume,
case studies, I'll bring it up. If not,

then we're just gonna move on.

But we will definitely finish the
exercise next time.

All right, let's go to some questions.

And the first question comes from Doug.

Doug is asking, is effort, if effort is
the difference in force between the

volume signature of two different bars,
then is the result the difference in

force between the price levels of two
different bars?

Actually, yes. If you think about, let's
deal with the effort first.

So we judge the effort by volume.

And we could say that on, let's say, one
bar to the upside,

the volume was this.

And then on another bar,

in the same direction, the volume
increased.

So this volume increase in comparison to
bar number one, it suggests that there

is some kind of difference in the amount
of effort that was put in

into that second bar.

So there is more effort to push the
price up.

So there is a difference in how effort
is being depicted right now.

The same for the result, because we
could see that the result, let's say in

case, is going to be all about,

let's say, something quantifiable,
something...

visual for us right because we're
reading the chart so we're going to say

the up spread has increased secondly we
could say

that maybe close to close the distance
between closes

right so maybe the previous bar was
somewhere here and that was a previous

so we see that maybe the close to close
is increasing

then we might say that, let's say on bar
number one,

there is some kind of supply tail that
we see.

So we could say that the close to spread

has increased as well in bar number two,
and it closes

so close to the high of that bar.

And that would be the difference in the
result.

Obviously, the result is also going to
be associated with the intention, and

this is something that, you know, not
necessarily Wyckoff into.

You know, Wyckoff never talked about the
intention of a specific bar.

But I took it from the significant bar
technique that I've developed for

and I'm going to introduce this to you
guys.

briefly in this course and then in more
details during the practicum. During the

practicum, we're going to be discussing
significant bar as an element, as

a tool for stop losses and how we would
be moving the stop losses more

mechanically. Again, not necessarily a
wake -up idea, but something that I've

realized in the methodology was, you
know, in a way,

was heavily underdeveloped.

So I had to think about this and I
introduced just basically the way how I,

know, trade swings or how I define
swings.

And that became very popular with a lot
of students.

Usually students opt out, you know, to
do that instead of the Wyckoff method

stop losses, which are extremely
discretionary.

So we'll talk about this.

And we'll talk about this in the
practicum.

But intention is slightly different, but
still under the result.

Let's see what other questions we have
here. Is result indicated as an absolute

level, whether positive or negative,
namely, result could increase, decrease

the downside or upside, or is it the
delta, change in the value?

So definitely we're talking about
specific things, Doug, right? So we know

those things that we want to define. And
again, they are extremely quantifiable.

If we're going to look at the spread,
we're going to compare it to the

subspread, and we will define the spread
as the difference between the high and

the low.

There is a variation on the spread with
the true range. We've covered that

before. Close to close, quantifiable.

Close to the spread, quantifiable.

So we are looking at the differences
among these characteristics.

And obviously, yes, there is a change in
value.

So for instance, if the spread has
increased, so there is a change in

If the close to close has progressed
more, there is a change in value.

If there is...

the close, like in this case that I'm
showing here, bar number two, the close

much closer to the high of the bar, then
it's quantifiable as well, and

therefore we could extract the value of
change.

So yes, it's definitely a quantifiable
change in value

type of parameter.

Having said this, you could say that the
absolute level it's going to be related

to the intention itself.

Right, because we are going to be
looking at some level of resistance or

support, it doesn't really matter.

And then we're going to be looking for
the bar that's going to try to overcome

this point of resistance.

So intention behind this bar is going to
commit above.

Therefore, from that perspective, you

could define the intention, whether it

was fulfilled or not, in absolute terms
because you could define the level of

resistance. Let's say it's $100 here.

If the price does not commit on the
absolute value above

$100, then what does it mean? This means
that intention has failed.

If the price does commit above and
closes above 100,

then in absolute terms, yeah, the result
has changed as well.

So really good question. Quite a few
distinctions right there.

And then we go a little bit into more
details with sub -questions right here.

And let me just kind of like rephrase
this a little bit.

Actually, let me read this. Is an
increasing result to the downside

as an increase in the result or a
decrease because of a smaller absolute

Is an increasing result to the downside?

I'm not sure about this question.

So let's just not go there, it's
decreasing, okay.

The decreasing result to the upside
communicated as a decrease or increase

because it's still high prices.

So Doug, I think that what you're
talking about is in the context, let's

an up swing.

where maybe a result is decreasing.

So let's say spread is decreasing.

Maybe volume signature is decreasing.

If I understand the question correctly.

So how would that be interpreted?

So we still would be looking for what?

We would be looking for the previous
bars.

right and we would be comparing the last
bar with decreasing result uh with the

bars um on the same rally we just have
to we just have to figure this out um

so in a way we could have a decreasing
result

on a rally in a bullish environment

So hopefully, you know, I'm addressing
this in the correct way.

I'm just trying to see if I'm
understanding the question correctly.

So yeah, you could have in the bullish
context a decreasing result. You could

have in the context of the downswing a
decreasing result to the downside as

well.

Yeah, so that's possible.

Okay, really good questions.

Some interesting distinctions that we
are discussing here.

All right, so thank you, Doug.

Let's go to the next question.

All right, next question comes from
Adam.

And Adam is asking, was today an ease of
movement bar in the markets?

So let's look at that.

By the way, before...

I feel like I have to clear my throat.
Before I answer this, what do you guys

think? Is this an ease of movement day
or not?

So write your answers really quick.

Yeah, Adam.

Doesn't matter what you used.

Let's just kind of like see what we've
got here.

All right, so I'm trying to get the
answers, and I'm not getting anything.

What's going on, guys?

Okay, let's get into the working mode.
Let's go, let's go, let's go.

Let's just be quick.

You know, don't think about anything
else, but the question is the last bar,

an ease of movement bar.

Okay, not sure. Does not look like one
to me.

Yes.

No.

Yeah. Okay, so we're kind of divided 50
-50, right?

Okay, so first of all, we'll have more
material on ease of movement.

So that's still coming.

We'll talk about this in the next
session.

But let's quickly define what ease of
movement is, right? So ease of movement

is going to have the characteristics of
expanding result

and diminishing effort, or

on diminishing effort.

Obviously, in the buy direction,

in the direction of the bias.

And then under the result, what's
important is that we are going to have

the intention

satisfying

satisfying the

commitment requirements.

So let me go through this again.

We're gonna see the increased result.

And predominantly the intention behind
this result is gonna be

positive.

And it's gonna happen on the decreasing
effort.

And usually the decreasing effort is
gonna indicate that the

Opposing to the bias force, in this
case, because the bias is what? The bias

up here, right?

So the opposing effort

is gonna

have the characteristics of weakness,
right? So we could say that supply is

poor.

At this point of time, how do we
conclude that supply is poor? Well, we

the chart. We look at the supply that's
coming in. And on Wednesday's calls, you

know, I was talking about this area
right here.

And we've talked about how the last ball
looked climactic, how there is a very

subtle increase of the supply that
suggested that's going to be some kind

reaction.

That's going to happen. Then we said
that with this reaction, we need to

understand what is the character of this
reaction that's going to develop.

And then we developed two scenarios.

One is kind of like a deep reaction.

And another one is shallow.

And we want to understand if the shallow
reaction comes, that we would have an

opportunity to continue the trend.

we also would have an opportunity to
consolidate.

And then if this is a deeper reaction,
then we're definitely looking at more of

the testing type of, testing of the
loads, of the December loads type of

All right, so it seems like so
discretionary, this whole thing, the

logic. But then when you go through all
of this, there are algorithms that are

basically leading us to specific
conclusions.

And this is what I want you guys to get,
you know, as the skill, as your

analytical skill from this course.

So let's look at the buying climax here.

So very subtle increase of the supply,
suggesting that we're going to have a

reaction.

Reaction timing is being defined by a
change of character bar that

suggests that we are in a consolidation.
We are in some kind of reactionary

mode. And off we go to the downside. But
now look at how the

price goes down.

We were anticipating that the price
would have some kind of acceleration to

downside. And instead, we see that the
volume decreases, meaning that,

and obviously decreases relative to
what?

Relative with which we start here on the
increase of the supply, all of the

other. Volume signatures to the downside
are decreasing relative to that bar.

So therefore, we are most likely seeing
a diminishing

effort to the downside.

So the downside effort is diminishing.

So therefore, we would be thinking that
this is more of a bullish sign. If this

is more of a bullish sign, then our...

two scenarios on the shallow reaction
are going to be probably working much

better at this point of time.

But coming back to the ease of movement,
so we want to oppose an effort to be

poor. Would you say that supply is in
control in the last, let's say,

two weeks, three weeks, you know, a
month?

Even if I would take...

the last five, six, seven days.

It seems like it is because we have a
reaction.

But it also could mean that on this
reaction that we see,

we could say that supply is poor and
demand is diminishing. And

that's why that produced a natural
technical reaction.

And, oh, boy, did we have a discussion
in the practicum about technical

and technical rally.

So that's a little bit more advanced,
and we still have to go through this in

the practicum and kind of like put the
last dot on

the conversation, but that was a really
good conversation.

Why is this a technical reaction?

Well, because supply is poor, and only
because demand.

has been exhausted with all of this
momentum moves to the upside. Look at

many swings we had to the upside.

One, two, three, four.

Four big swings of momentum buying that
we had to the upside.

So that suggests that we're going to
have some kind of reaction just because

demand has been exhausted a little bit.

And if demand is exhausted and supply is
poor,

It's going to produce some kind of
reaction, but it's not going to be

with the distribution necessarily.

And therefore, it becomes more of a
technical reaction within the

confines of the upswing.

So we are kind of good on the bias here.

All right, well, look at the last bar.

Let me just clean this up.

Let's look at the last bar, and let's go
through the definition again of the use

of movement.

Do we have supply that is poor? Yes.

Diminution demand on the reaction?

Yes. We have that, or diminution react
on the upside? Yes.

So now what we want to see is through
the reaction that was a

technical reaction.

we want to see supply being exhausted.

At least temporarily, at least short
term.

And with that exhaustion, now imagine
that supply is exhausted

and demand is

tired too, right?

So both of the forces, buying and
selling, are hesitant to go in into the

market and produce the next wave.

The buyers are hesitant because, well,
they've been buying for two months now,

more than two months.

So whoever wanted to get into the
position already in the position.

That advanced the price so much that
there is no value even.

for some of the institutions to be in
the market, to be active in the market

right now. There is more value for
institutions right now to think about,

already in the position.

How do I hedge my positions against a
possible

volatility that might come next?

Something maybe like of this variety
sort, of this sort.

where we have more reactions that would
create the trading range.

So therefore, the buyers are not

active.

And then the sellers are kind of the
same way. Why?

Well, because they've been selling on
the way down and they had profits.

And then once the price went up, what do
you think they did?

They started selling again. Or they
added to the position. Or they

new positions.

And what was the premise of that? All
because they are thinking here, sellers.

Sentiment.

They are thinking that we are in the
bear market. That's number one.

So their bias and therefore their
behaviors are going to be determined by

bias. And secondly, they think that we
are in a short -term overbought

condition.

Literally here, here, here, here.

And what they do is they sell, they
sell, they sell, they sell.

To what end?

Obviously to a loss.

So they're going to produce loss.

Loss, loss, loss.

And this collection of losses, even
though they're still extremely

sure that this is a bear market, leads
them to the state

of exhaustion.

So sellers are exhausted at this point.

So therefore, when they are exhausted,
especially emotionally, what do you

they're going to do?

They're going to withdraw from the
market and they also become inactive.

And therefore, at this point of time,
this is what we see in the volume

signature.

It's almost like there is not a lot of
participation.

There is some, but not as much as we
have had, let's say, in this area right

here.

So what does this remind you of?

Well, probably this environment right
here,

something like this, where we're just
kind of neutral, and we have some kind

reactions within the context of the
swing, and those are fine. They're still

within the bigger context of a much
larger move to the offside.

It still tells us a story that, yeah, we
are exhausted in general.

Bars are inactive. They're already in
the position.

And then sellers are just exhausted with
all of the losses, so they are out of

this position.

And they don't want to come in on short
at this point just because they don't

want to be wrong again.

So that's the whole story. sentiment
picture that we have currently in the

market and it still favors the bullish
scenario no matter how it's going to

unfold even if we're going to have a
much deeper reaction let's say to 2600

fmp uh something like this then you know
it's still going to be within the uh

framework of this bullish momentum rally
that we have had just recently

i'm trying to finish on the ease of
movement but there are so many thoughts

come to my mind as we discuss this so
let's talk about these a moment again

um do we have an expanding result

to the upside well

let's go one by one let's say an up
spread

It did increase relative to the spread
that we've seen just recently, and the

spread. Yeah, if we would look into this
area right here on the last rally,

actually, even if we look at some of the
prior spreads as well, maybe this

one is a true range.

That's even larger.

So we could see that in the last months
or so, This is the best bar.

So yes, I check.

Close to close.

Yes, check.

Definitely, we are at a much better
close to the upside than

what we had here, and we don't even have
a close to close to the upside here.

This is close.

from one down bar to another down bar,
but we are overcoming all of those, and

this is a much better close.

What about close to spread?

Yes, as well.

And we could probably judge this by
maybe like the previous bar that has a

bullish characteristic built in it.

The price has kept down on the open.

went down and then closed up like this
so we definitely see the improvement

both on the close to close and close to
spread and up spread and so on so forth

and then we said that the effort

to the upside for the ease of movement
needs to decrease and we see that in the

volume signature so on the relatively
light volume

compared to what we've seen before, we
are actually moving nicely.

So now a tricky part comes, intention.

So with the intention here, we should
think about this in kind of like two

terms, short -term intention and then
long -term intention.

So short -term intention was to close
favorably

over what we have had as a commitment in
the most recent price action. What was

that commitment? It was commitment to
the downside, right? So we had closes

down, close down, close down.

Are we committing above those closes?

Could the professionals, even with
minimum effort, push the price in such a

that it's going to close above previous
closes?

and we could definitely see that one two
three three

bars or three closes rather this bar has
overcome the latest three bars to the

downside and it did so in one day not in
two not in three not in four in one day

so it took the price three days to go
down and it took just you know, a day

a half to rally off this low.

So definitely we are satisfying a short
-term intention.

Now what about the long -term intention?

Well, the long -term intention here is
obviously to overcome a

resistance that has been created by the
high of the sub -swing.

Have we done so?

No.

And that's the key here to this
question. Is this an ease of movement

On a short -term basis, yes.

On a longer -term basis, we still have
to see the commitment above this area.

So this bar has all of the
characteristics for the ease of

an ease of movement on the short -term
timeframe.

And yet,

having all of these characteristics, on
a long -term basis, it does not show us

that ease of movement yet.

But it can if the next bar or within the
series of bars, we're going to have

something like this.

And, you know, I've discussed in the WMD
what could be the catalyst for this

type of move, what would be this type of
commitment.

And I've shown you guys some analogs
from the past.

So let's talk about the catalyst.

Catalyst most likely is going to be
associated with China,

U .S. stocks.

Imagine everything comes together,
everybody's excited, and what do you

the market's going to do?

most likely is just going to go to this
level very quickly. So there's going to

be some kind of acceleration.

That's number one. So that's like the
most bullish scenario that we could see.

So and this would conclude this run.

After this, we're definitely coming back
in a big way because the institutions

are going to see this as an opportunity
of liquidity value close to the long

-term uncertainty high, and they're
going to start selling.

Okay, so we're talking about the
catalyst, yes.

What else did I want to mention here?
What's this?

Oh yes, so the analogs for this.

So look at the Dow Industrial in 1974,

75.

And 75 was such great analog for this
rally.

And if something like this develops, or
maybe even something of a small

trading range shape and then going up
out of that, this is going to look more

like 75.

Tesla in 2014, 15,

16.

Look into that, had the same big
structure trading range, and then a

shakeout in the middle, and then a quick
rally to the upthrust

reaction, and then a prolonged
consolidation, almost like a year.

And out of that consolidation, then the
price started to go up.

quite a few still scenarios of how it's
gonna unfold, but it's very encouraging

how the reaction is behaving, and that's
why it's not just enough to

identify that the reaction is gonna
happen.

What we should be concerned about is the
way how it happens, because the way

how it happens will define the short
-term bias and sometimes long -term bias

well.

All right, great. Let me see some
comments here.

Okay, so Eric is asking, in this
reaccumulation, is public selling or

is CO taking partial profits? And Eric,
you have to be a little bit more

specific. So when you talk about
reaccumulation, I'm looking at this

right here.

So what are we talking about? Are we
talking about the specific spot from the

low to the up? You mean from this low to
this?

Right? Okay. Well, let's talk about
this. So obviously here,

extreme oversold and extreme value.

and extreme liquidity so ceo is doing
what ceo is buying

then on the way up

as we look at the momentum look at the
where momentum picked right

here on this bar so all of this

It's going to be institutional trend
followers.

What do they do? They are gradually
getting into the position.

And they are getting into the position
gradually just based on their

level of confidence and their systems.
And the system just basically tells,

okay, expose yourself more, more.

And I see institutional systems are
often based on this, on kind

of like this confirmation of the
system's signals.

So asset allocation is based on how the
system confirms specific environment.

And I'm actually thinking here, and for
those of you who are institutional guys,

you know,

I think that it's a model that was based
more on

the idea of the preservation of capital.

And I think that in the institutional
world, we kind of all of us are so

concerned about losing the capital.

Because if you lose the capital, you
lose your job.

That's what it basically...

If I have my personal account, and let's
say that I lose the money, it

doesn't mean that I'm going to stop
investing or trading in that account.

And I still have that job.

Because institutions are different.

They produce a bad performance, and then
their

job is in jeopardy.

So that triggers specific behaviors by
money managers.

So they wanna be tentative.

And they seek confirmation.

And what it does, Adam, by the way,
yeah, I agree with you on that.

What it does is money managers at this
spot are gonna be

tentative.

and they will seek confirmation.

And look at this and what this produces.
If they seek the confirmation, they

underexpose.

And then because of that, they
underperform.

And they underperform especially

And this is just a variation, especially
on momentum rally,

like we just had.

So the reason why I'm talking about this
is because this is a current problem, a

puzzle that I'm trying to solve for some
of the institutional clients.

Because that's the question that is
being posed to me.

How is it that we were correct on the
bias of the low?

We started buying, and we're still
underexposed, and we are barely, barely

matching the market.

Well, you can't really do a lot here
with this rally.

It's almost like the solutions to this
problem, and I wonder, guys, if you

have other solutions as well.

Solution to this problem is going to be
all contextual, meaning

that in this environment where you're
extremely oversold and there is so much

value in liquidity,

you should be exposing yourself.

The only other question here, if this is
gonna develop into the bear market. So

like there are so many thoughts that I
have on this, not necessarily wanna go

into this because we're already at four
o 'clock almost, but this is a very

interesting puzzle and this is something
that maybe I'll discuss more.

you know in the practicum so solutions
contextual right so you're you're going

to be thinking about your weight in a
specific sectors groups and so on so

secondly market oriented

exposure for your portfolio and

that could be in the

In the case, we could be thinking about
specific ETFs that could

be related either to the market itself
or to specific groups that we think are

going to outperform.

Then the third one is just the portfolio
risk itself.

How do you manage your portfolio risk in
this environment?

and underexposed, you're going to lose
just on underperformance.

So for money managers, not just making
money is not enough.

You're always being measured against the
market, against your peers.

And this is where you could lose your
job as well. So if you're

consistently, then you might have fewer
capital coming your way.

So the portfolio risk question is a very
interesting contextual point here for

us to think.

So maybe like ETFs.

And then also, I'm thinking and I kind
of suggested that there

might be some smaller leveraged
positions that you could

use here.

Smaller leverage.

leveraged positions.

So for instance, if your institutional
risk there is at 1%, you could say that

I'm gonna expose a quarter of that
percent to more risk than usual.

But in the environment like this, if it
works out, it's going to, you know,

bring me, let's say, additional percent
or percent plus.

So in a way, you're kind of creating
that three to one, five to one

on reward and risk.

And you're improving your equity in
that.

allows you to outperform.

This has to be timed more properly, this
has to be selected more properly, but

if it works, then you're going to
benefit from that.

And then the last one is you definitely
want to understand how you're going to

do your hedge at the top of the

rally.

because you're going to have, your
portfolio is going to have some

that, you know, maybe majority of the
positions that are going to advance,

like 20 % that are not going to advance,
80 % that are going to advance. Out of

those 80%, you're going to have some of
the positions that advanced, but not as

much.

You're going to have 20 % that advanced
a lot.

So you definitely want to keep those.

And you want to understand how you hedge
against an upcoming reaction for all

of your positions. So maybe the ones
that did not advance as much and you see

some short -term deterioration in the
price and volume signature, those you

could hedge more.

And the ones that are there, uh showing
more bullishness you could just leave

alone and just seek the opportunity to
add on the way down so quite a few ways

you know to tackle this problem and to
think about this puzzle all right so

side notes today but hopefully all good
guys and hopefully we are

um we are uh covering

some of the material that you could use
in your own trading as well. And

everything, by the way, everything that
I've said, if you have a portfolio of,

let's say, 100, 200, 300, 500, something
like this, up to a million, and we

have students like that, this is your
topic.

This is how to manage your portfolio,
how to understand the portfolio risks at

the specific structural spot.

Again, maybe something a little bit more
advanced for this class, but something

to think about, something to think about
while you're taking the practical

because those things are going to come
up and we'll discuss those.

One last thing.

What I like about this last bar, and
obviously, again, short -term intention

satisfied, but long -term is not, right?
So we still have to overcome this point

of the resistance that played out so
many times before.

So until we have that bar, we're still
thinking that the long -term intention

has not been fulfilled.

But look at the momentum, how the
momentum comes to, and I'm always using

of change.

I'm not using any other momentum
indicators. It's redundant.

Just use one, stick to one, and it would
be enough.

So look at how it goes to the center
line and then rebounds exactly off it.

So this could be just a short -term
technical rally, and that's how the

would behave.

around that, so look at, let's say,
something like this, something like

this, this, this.

So there's some kind of momentum, let's
say, going into the latest rally, and

then on the reaction, we're seeing that
once it touches the central line, it

recovers, so somewhere here, you know,
you could continue your campaign or add

or establish a new position.

All right, great, good questions, good
conversations.

Let's go to the volume case studies.

We're still studying how supply and
demand interact with each other, how

and price interact with each other.

Excuse me.

And we've talked about different types
of supply absorption.

We've talked about horizontal
absorption.

or absorption through time, sometimes I
call this. So this absorption is going

to be observed by ours through different
phases.

And usually the predominant supply
signature is going to be of the

supply going into phase C.

And then we could have different
variations on this.

vertical absorption we said that could
uh take you know different paths uh we

could see and we've studied the kind of
like a vertical absorption on the way up

which is more aggressive where we had a
reaction in the direction of the main

bias so main bias here is to the upside
then

we have a reaction

And this reaction has elements of
increasing supply.

So here we've talked about how on the
way down, not only supply but demand is

going to increase and that's going to
produce absorption on the way down.

And then we said that after that,

demand is going to increase even more.

And when demand is going to increase
even more, the price is going to go up

the increased momentum and it's going to
come to the point of the resistance.

Okay, so I want you to remember this
because we're going to come back to this

thought. Price is going to go up.

with increased momentum to the
resistance.

And then, after that, it's gonna have
some kind of test.

Well, for, how would it look?

It would look something like this, where
we have such a big move to the upside,

and then it comes to the level of the
resistance, and then it's just gonna

right here.

So that's one of the elements of
vertical absorption that we've studied.

So today, I want to talk about feather.

And feather was mentioned by, I believe
by SMI,

not Wyckoff himself, but by SMI. And
then, actually that was in the original

course. Yeah, I think that was in the
1930.

There was a reference to a feather
there. And that reference was that the

price was kind of like hovering around
resistance of the support with

diminishing both supply and demand
signature.

And that produced the condition where on
the next leg up, let's say,

momentum has increased.

And let me just kind of like jump into
this, but before we do that, this yellow

highlighted area, think about what I've
just said.

As demand increases and momentum
increases, the price goes up on the

momentum to the resistance and then
produces a test.

Does this remind you of anything?

What about the chart that we've just
studied?

We definitely don't have a bullish bias
before.

We have a trading range here, so non
-trending environment.

Then we have an increased supply
signature that produces this reaction.

And out of this reaction, we see that
there is absorption on the way down, but

then there is absorption on the way up
as well.

And the rally usually is going to come
to the area of the resistance. So we are

right there. This is resistance number
one, number two, number three.

So we are close to that zone. We are on
the border of this zone.

And that's why I'm thinking, you know,
what is going to happen here? Are we

going to have like a trading range right
here and then we're going to go up or

are we just going to kind of like...
spraying up like this.

And I think it's, again, it's all going
to be related to China and how the talks

are going to unfold.

But it reminds me of that vertical
absorption.

This is what has happened here.

There is an absorption on the way up and
it's vertical because there is no

trading range here.

I mean, there is, but it's not that big.
It's not the absorption that we have

through the trading range that we've had
in April, May.

It's more.

on the way down and then on the way up.

And that's how the V bottoms are being
created. There is so much value here on

the way down and there is still so much
value on the way up.

And again, please note where the
momentum signature has stopped.

Why did they stop buying here?

Well, if this was the previous value,
then everything here is under value

and still under value.

even on the way up.

Until it hits this area right here, this
is institutional undervalue.

So they are buying on the way down, they
are buying on the way up, and then they

stop buying.

Once institutions stop buying, how are
we going to see that on the price and

volume signature?

Well, the volume signature is going to
be gradually declining.

The price is going to also deteriorate,
right? So we're going to see a

deteriorating result to the upside, even
though it's still a bias to the upside,

even though the price still goes up.

You know, coming back to Doug's
question, you know, could we have a

result in the up rally? That's exactly
what we have right here.

And once they stop buying and they're
inactive, you know, we're going to see

this also in the momentum.

So momentum is showing this, volume is
showing this, price is showing this.

We could interpret this as diminishing
interest by institutions at this point

value, but still it goes up just because
no one is selling.

They got in and they're not selling.
Why? Well, because this is not their

typical behavior.

They are gonna be, they're gonna be,

thinking here more about they're already
in the position and how to protect

their portfolio.

Okay.

I don't know, we're definitely on fire
today with all of the side note topics.

Let's come back to the feather.

So here is the feather, right?

And this feather is in a free fall.

What does it mean?

Well, you guys remember, right? You know
how the feather flies down, how it

falls. It's kind of very slow and
gradual, and usually it's just going to

of like go from one side to another side
and have those swinging type of

moves, and slowly and softly it will
land

on the ground.

And if we would be thinking in terms of
feather in the

market, this type of action, we probably
would be saying that there is no

increased effort or pressure that is
being applied to a feather. And

that's why it falls down on its own
weight.

And it falls down smoothly and slowly.

And there is no increased result.

I mean, we're definitely going to hit
the ground with the feather because it

still has more weight than the air,
right? So the gravity is going

to pull down unless there is some kind
of distortion with the wind and so on

so forth.

But if the conditions are such that
there is no wind, the feather is not

to have increased effort.

to move down or to move to the side or
to move up again.

It's also not going to have increased
result.

It's just going to gradually kind of
like go down, down, down.

There might be some slight increase in
the result, you know, if we go into the

whole physics of this thing.

I'm not quite sure, but to me, just on
the conceptual level, this is just a

fall movement without interruption.

And we could see in the market some
places like this where, let's say, in

place right here, we see how the price
had initial momentum.

And then after that, the price goes
down, goes up, goes down, goes up, goes

down, goes up, goes down, goes up.

And this movement is...

reminding me of a feather. We are close
to the breakdown. We are moving to the

downside. So result is there,

but not dramatic.

And then think about if we add more
force.

to push the price down, what should
happen? So in the feather

story here, we're gonna say that if
we're gonna

put a small stone on the feather,
somewhere like on the top right here,

so we are basically increasing the
effort to push the feather down or to

push the price down.

What should happen with that?

Well, definitely momentum is going to
increase.

With the momentum increase, we're going
to have the velocity increase.

And with all of that, we're going to
have the increase in the result. So how

would that look on the chart?

Well, it's going to look as if out of
this feather

Tragen range, once the increased effort
was introduced,

the price is going to just...

run down much faster.

And that effort is gonna be shown to us
in the volume signature, or rather than

the change in the volume signature.

So volume change,

effort change.

As this happens, then we're gonna see
price change.

Okay, so let's Look at this just on the
charts, and let's talk about the

characteristics and definition.

So a feather is a part of the
springboard heuristic that identifies a

significant lack of counter effort and
counter result, resolves itself in the

momentum breakout.

Let's look at the bullish feather.

We have an established bias to the
upside.

That long -term bias is to the upside.

And this is the Apple daily chart.

Then we have a counter reaction to that.

Counter move.

This counter move is going to be
associated with the supply signature

could see here in the stop in action, in
the sell in, and then still on the way

down, kind of like a general
capitulation here.

So supply is going to increase.

Then after that, what's going to be
interesting is that we're going to see

higher highs, higher lows for the
bullish feather.

So here they are, higher high, higher
low, relative to this.

Higher high, higher low, higher highs,
higher lows.

But look at the nature.

with which these higher highs and higher
lows are being formed.

We've seen a deterioration of the

effort that pushes

that price up.

I mean obviously this segment right here
has some momentum, yes that's true, but

then after that, both supply and demand
are somewhat

Definitely not negligent, but not that
active.

And we are thinking that demand is

diminishing and that supply is poor.

And that's the whole situation. And even
with that, we're still making higher

highs and higher lows.

So in a way, a feather...

is an ease of movement.

And because we're making higher highs
and higher lows, feather becomes a

part of the vertical absorption family.

And then obviously, once we come to the
level of the resistance,

This is where the behavior of those
institutions is going to change.

And this is where they're going to say,
well, even with that small effort to

the upside, diminishing effort to the
upside, the price gives me an absolute

performance that I need. It goes up. It
doesn't go down.

So I might buy more.

They might be buying more on...

some kind of catalyst.

Maybe they are waiting for this catalyst
and that's what creates this type of

movement right here.

Anticipation, but it's more with the
bullish bias built in into the price

action.

And then when this catalyst happens,
they add more effort and that pushes the

price up with a lot of momentum.

So we're seeing a lot of momentum here.

And then after such momentum, there is
usually a continuation to the upside.

Okay, then let's look at the bearish
feather.

Kind of the same concept, right? So, and
we could look into maybe like feather

as being this whole thing, right? So
we're making lower lows, lower

highs in this area, or in a smaller area
right here.

A major bias to the downside.

A counter move.

And I would prefer here to have more
demand signature, but there it was.

There was an increase in the demand
signature right here.

And then after that,

there is a move to the level of the
support.

Please notice for bearish feathers,
there's gonna be support.

For bullish feather, there's gonna be a
resistance.

And we are kind of hovering around this
area.

We're still making slightly lower highs
and lower lows on a very short -term

basis. And once we are

Once the force is going to be
introduced, and we're going to say that

those people who bought in, and they
were buyers in the

bearish feather situation, they're going
to give up at some point. They're going

to capitulate.

And this capitulation after the feather
is going to produce increased volume

signature.

increased momentum, increased velocity
to the downside.

And then obviously the price is going to
react also a lot to the downside.

I'm going to have all of this increased
result to the downside characteristics.

All right.

I'm thinking about what I've missed
here, you know, any substantial pieces

I might have missed. So let's just think
together.

What are the questions? What are the
comments? Because this is not an easy

concept. It looks easy, but sometimes I
feel like even I myself am not

identifying it correctly with a lot of
consistency.

And the reason why is because sometimes
the volume signature is going to

increase and it's not going to look like
feather because there is like a lot of

increase in the volume signature.

So we usually talk about the feather as
something being light as a feather.

And it still moves the price down. So
that ease of movement type of thing.

Okay, so some comments patterns.

Okay, Adam, I'll have to look into that.

From Nilesh, how should we trade further
to initiate the position?

Okay, very good question.

So let's develop, you know, maybe like
different scenarios, right? So our

position here in Apple, and this was
2015 -16 trading range, so you're going

identify this high as a major sign of
strength.

point number one as a backing up action
going into point number five so this is

just a trading range of the backing up
action here so how would we be thinking

about opening the position because of
the first reaction and the increased

supply on the backing up action we might
be thinking about uh establishing the

position at point number two on the
reversal so somewhere here this could be

point of entry number one

then looking at the feather itself, and
I think this is the value of that

question, how do we trade it?

If we understand that feather by itself
is a test of supply

at the resistance level,

then we know that we could buy the test.

So we could find some spots to buy here.

One, two.

And then if we're thinking about what
should happen next, if there's going to

a late capitulation of short traders in
a bullish feather and they're just going

to capitulate, let's say, on the
catalyst or on the breakout, all of the

that they're going to provide is going
to become a market order to buy.

and therefore supply is going to absorb
even more.

More. If that's the case, If there is
more supply that has been observed, and

not only at the lower price levels, but
at the higher price level, what do you

think is going to be a long -term bias
to this?

Most likely it's going to continue,
right?

Continuation.

And if the long -term bias is a
continuation, then think about a point

Could we think about a point of entry
right here in terms of...

add into the position.

And I think we can because let's say on
this catalyst, on this momentum

catalyst, we are also going to have a
test.

And that test usually comes within the
next two days. By the way, it was really

interesting how we talked about this in
this course, right?

Big momentum push on a lot of volume was
the gap.

usually on catalyst earnings.

And then the next two days, we want to
look at the test.

And Linda was talking about the same
pattern. And she considers this one of

most reliable patterns. If your test is
successful, if you don't have the bodies

or the tails of the testing days
violating the low

of the gap day, and they don't go too
much into the gap, most likely there's

going to be some kind of continuation.

And look how nicely, you know, you would
have this straight from 125 to the

first change of character bar to 147, so
that's 20 bucks, or

it's going to translate into what, about
18 % move, something like that,

around maybe 18, 20%. And then you're
making this 20 %

in... one, two, three, three and a half
months.

So you have to think in three and a half
months, 20 % annualized, it's going to

be different.

So this is a good swing trade. And
especially if you've been entering this

position before, you know, like at point
number one, two, three, and four. So

you could potentially scale in into the
position.

And look how nicely it's just on the
edges of short -term

oversold conditions. What do I mean by
that?

I believe this was below, yes.

So look at this.

All of our entries are clearly close to
the

oversold.

except for the momentum breakout right
here.

But the momentum breakout entry is going
to suggest a strength of the

continuation. So therefore, we're still
relatively in the not such a risky

place.

All right, so what else?

Joe is asking, for the bearish feather,
where did the CO get out?

Well, CO got out in many spots, Joe.

we're talking about a late institutional
capitulation here so and by the way ceo

could be getting out here as well and at
this point the ceo still has a

profitable position that's number one
and secondly we cannot call it ceo

because we would be thinking that ceo is
going to distribute the stock at the

higher level so maybe somewhere here
where ceo is distributing off

the top

Maybe here on the way up, on the way up,
on the way down. So this is CO.

And then the rest is just institutional
trend followers that are gonna

capitulate here.

So this is early institutional
capitulation.

So this is smartest money.

this is smart money why is it smart well
because they get

out at the last opportunity before the
collapse uh and therefore they give

themselves an opportunity you know to
still stay in the position if this is

going to be a reaccumulation and then
the late capitulation is just going to

not as smart right not as

smart And I don't necessarily kind of
like this definition, you know, smart or

not smart. It's just a little bit, I
feel like some people could

look at this as a little bit, you know,
domain value, you know, for certain

types of market participants. But I know
that you guys understand what I'm

saying here.

So the smartness of the money depends on
where they get in, where they get out.

But at the same time, there are so many
different variations on how institutions

behave.

We don't even know completely what are
the motives, intentions of some of the

institutions being in the position that
is going down or shorting in the

position that is going up. What if they
have some kind of spread trade, right?

So meaning that they have...

two highly correlated stocks.

One of them they bought and another one
they sold.

And this could be here an example with
Goldman Sachs where somebody might be

buying Goldman Sachs and don't mind the
Goldman Sachs going down, but at the

same time selling another stock in the
same group because it just outperforms

the relative basis.

Obviously in this case it should be vice
versa.

This was actually a trade that I've
conducted back then, what, in 2018 in

Goldman Sachs.

Let me just capture this.

So the trade was conducted here.

The entry was somewhere here. I don't
remember exactly, but I remember that it

was before the break.

And I was consulting an institution at
the time, so the trade was

done with that institution.

And it was a profitable trade, but it
was executed incorrectly.

What do I mean by that? I mean,
obviously selection was correct. The

entry was correct.

Check. Point of entry.

Check. We used the, I think it was
actually a cash position, so

they were boring, and this was a good
stock to

borrow because this stock usually has a
lot of liquidity, so a good

institutional, easy, what's the term
there,

easy collateral stock.

that could be used in this situation and
the exit from this trade was somewhere

i don't recall exactly i think in this
area here

or even earlier here

So we haven't even experienced a
terminal climactic action.

And I was kind of a little bit
disappointed how execution has been done

exit. I mean, obviously, for a small
swing, that's fine.

But the bias was still to the downside,
and we just experienced a major sign of

strength. So we had this first
capitulation that meant that there is

likely is going to be a continuation.

could have stayed in this trading range
and then continued to the downside.

I believe the stock went down after
that.

So execution and specifically exit on
the outside

was really poor.

So it's very interesting how you could
have

the knowledge, but you might not have
the skill.

You might develop the skill of visual
recognition on the chart of what you

but it doesn't mean that you could
execute correctly.

Even if you know how to execute
correctly, you might be bound by the

opportunities that is being given to
you.

I mean, obviously, the market in 2018 in
comparison to 2017 are two different

animals.

So opportunities in the market play,
availability of opportunities also play

big role.

And sometimes we don't learn how to
recognize this opportunity.

But even if you can recognize the
opportunity again, it doesn't mean that

mentally you might technically execute
it correctly, but mentally you might not

execute it correctly.

And even then, when you...

can go through all of those steps and
you are at the level of the advanced

understanding of not just trading but
yourself,

you still can fail to leverage this

opportunity.

And with advanced students, you know,
this is a common mistake.

Sometimes you see an opportunity, you
recognize, you have the knowledge and

skill to act on that, and then it
becomes a wasted opportunity because

it was not properly leveraged based on
the contextual risk that was

present at that time.

So it's a process, and this course is
just a first step in

this process.

And I'm still working myself on this.
Believe me, guys. I'm extremely honest

with all of you always because I believe
that if you're not honest with yourself

as a trader, you're most likely going to
fail. So you have to expose yourself.

You have to be vulnerable.

You have to be uncomfortable constantly
in order for you to adjust. Always make

that adjustment.

And then only that.

will bring you to the next level.

So that was kind of like my disappointed
on the actions of that hedge fund at

that time.

Okay, so.

Okay, now I should say in Apple chart,
the upward movement from February to

April also looks like a feather. If no,
is it because it's forming after leaving

the trading range?

February, April.

I see this one right here. Well, we have
to have some kind of reference to the,

obviously the resistance, and there is a
long -term resistance here for Apple

that we've seen.

you know, off the 2015 high, I believe.

Yes.

So you could think that, yeah, the price
kind of like does this. I would

probably go to the weekly chart just to
confirm that.

I would say that this is just like an
uptrend.

It's more established. There is no
grinding into the resistance area.

It's more of a freer move to the upside.

So probably just based on that, maybe I
would not exactly say this, but

if you see it like that, that's totally
fine.

What are the consequences of that? Well,
we need to see some kind of momentum

move. Well, here it is. It comes on the
breakout, so that seems to be in

compliance. But again,

something where the bias is established
and you have a big counter move first.

And then you have this vertical
absorption.

Here, what is the long -term bias up?

Was there a counter move?

Not necessarily.

So from that perspective, maybe not.

Okay, Doug. Yeah, we'll talk about this
maybe later on.

You know, I'll have to have more
examples of this.

All right, great. Let's go to the next
one.

Okay, well, 20 to 5.

Let's talk about urgent demand. That's
another volume case study that we have.

So usually demand, and we've talked
about the ice cream story.

So demand usually is not going to be
extremely pronounced.

after the absorption of the supply.

Why? Well, because think about what
happens with the absorption, let's say,

the selling climax.

So demand increases a lot here.

Supply increases as well.

So that stops the price from moving
down. On the automatic rally, demand is

still increasing.

Supply is decreasing.

On the secondary test, supply is
increasing relative to what we've seen

latest rally right here.

But decreases, so increases short term,
decreases long term.

And then at the same time, demand is
increasing short term.

So there are some buyers that are coming
in and getting some value at the low.

But at the same time, demand is lower
than it was on

selling climax and automatic rally.

Then we go into phase B, same happens
again, demand is diminishing,

supply is diminishing, locally supply is
increasing, demand is

increasing, that pushes the price up
again, and then demand is decreasing

more, and that pushes the price into a
spring.

At this spring, supply is increasing,
demand is increasing even more. That's

absorption on the way down.

And then after that, in phase D, demand
could either

be low and the price still will go up.

And that is a function of how supply has
been gradually diminishing.

throughout all of these areas right
here.

So sometimes supply has been absorbed,
supply is absorbed at

this point so much that even dimension
demand could push the price up.

But in some cases, that picture is going
to be different.

In some cases, we're going to have a lot
of inactivity throughout the whole

structure so apple here shows that uh
for uh what about nine months or so

we with we see um in institutional
inactivity

and there is a reason for that

there is a long -term reason for that
and that long -term reason you will have

to look at the chart since 2001

and just to kind of see what that reason
is on the long -term chart. But on a

short -term chart here, we're seeing how
institutions are buying here,

institutions are buying here.

All of this is on the way down.

There is no buying whatsoever,

at least of the consistent institutional
buying, until we probably come

to this area right here.

and we've seen that there is a stop in
demand that comes in at this point, and

as the price tries to commit into the
spring action, there is one close below

that support level.

We see how the volume signature has
increased drastically, and that is a

point, so therefore demand has commenced
in a significant way, and it's a stop

in demand, and it's absorption on the
way down.

So that we've studied. We've studied the
absorption throughout phases. We've

studied the absorption on the way down.

Now, we also studied a feather.

And a feather was a counter move

and then a grinding out action, price
action,

with higher highs, higher lows.

And this would be seen more on the
intraday.

And then both supply and demand are
diminished.

And it comes to the area of the
resistance.

And at this point, you know, we could be
expecting if the effort is going to

come, it's going to produce such a huge
momentum.

Why? Well, because supply has been
absorbed so much.

And therefore, when demand comes in like
this, on

the way up, When supply is in strong
hands, there is nothing stopping

the price from moving in such a quick
way.

And another thought here on the urgent
institutional demand.

Think about the word in here, urgent.

What does it mean?

Why are they so urgently trying to get
in into this position.

And please note, they're getting on the
way in, on the way up.

They are not, at this point, they're not
getting on the way down.

It's been done before, right? Here and
then at the sprint situation.

Here they're just like, I don't care, I
just want to be in this position.

I need to be in this position because I
see so much value in this position going

forward.

It's going to be a leadership stock.

So that urgent institutional demand,
usually in phase D, is

going to identify to us a timing of
uptrend emergence.

And we know that behind it are going to
be institutions and not weak hands.

And usually these type of stocks, if you
go and you visually backtest a lot of

this type of breakouts in Phase D, and
if you find a lot of institutional

signature in Phase D that pushes the
price like this with a lot of momentum,

bringing it above the levels of the
resistance, then you could

make a deduction here that it's not only
going to be a leadership stock.

but that the trend is going to be
sustainable for quite some time.

Because institutions don't buy for a
couple of weeks, a couple of months. No,

they hold on to their positions based on
the requirements that they have. And

one of them is to have long -term tax
advantages, have low

turnover ratio within their portfolio.

and obviously with an intent to
outperform the market, so they have to

leaders. They cannot pick just the
stocks that are going to underperform.

So based on all of this, when you see
this type of volume signature in Phase

you should be thinking about all of
those things.

And therefore, this type of the position
might be more of a long -term position

rather than a swing position.

All right, let's see if we have any
comments, questions.

Eric, I'm sorry, I don't quite
understand the question.

Okay, if nothing stops the demand.

Due to their accumulation, why backing
up action appears instead of going up?

Oh, I see. Okay, so maybe I'm grasping
this. Okay, so maybe the question is, if

there is so much momentum here, right,
because of institutional buy,

then why, you know, it doesn't go up but

goes into the backing up action?

Well, I think it's a structural question
here, right? Because think about how

supply is being observed.

So supply is being observed on the way
down, on the way down, on the way down.

So supply needs to be observed at the
specific levels.

And because there are so many market
participants,

emotional memory of where they
established the position, where they

win or the loss are going to be
remembered.

And obviously at the points of the
resistance, this is where that memory is

going to act out again.

Or we could state it in a different way.
We could say that because of how

humans develop systems for the market,
we could anticipate

that in the area of the short -term
overbought condition, there's going to

some selling.

Selling is going to come from mean
reversion trade

professionals.

The selling is going to come from short
-term trend followers.

get in right here they're gonna get out
somewhere here or on the way down at the

first sign of deterioration um and um

who else would be selling here at this
point

um public would not be selling public
would be excited getting in ceo is

in um institutional trend followers that
are long -term institutional trend

followers are just gonna hold on and
just wait to see how this position or

reaction is going to unfold.

So these are the predominant two groups
at this point that might be selling.

So they're going to increase the level
of supply at this level of the price.

And that increase of the supply and
selling is going to produce what? It's

to produce a stop in action and a short
-term reaction.

And therefore, this short -term reaction
is going to develop a backing up

action.

Yeah, Eric, is that what we wanted to
hear, right? So momentum, obviously, if

the buying is just continuous,
continuous, continuous, then we would be

anticipating a continuation like this.

But not in a lot of cases we see that. I
mean, this is more

something that would be a unique
situation. And I would say that in

liquidity stocks.

That's a possibility where big
institutions are not available

and smaller players could manipulate the
stock more freer. And

I would say that the low liquidity
stocks and the way how sometimes they

run up so much. In a lot of cases, this
reminds me of the stock campaigns

that Wyckoff himself

was describing in the course and in his
books and in his letters and magazine of

Wall Street.

And people like Jesse Livermore, J .P.
Morgan, James

Keen, and other big traders at the time
were conducting as

campaigns. They could take the stock,
buy out.

the majority of the supply and mark up
the price this way.

So on this action, we are learning this
in the

modern world, and sometimes it's really
hard to see on highly liquid stocks.

But it's extremely easy to see on
illiquid stocks.

And therefore, illiquid stocks could be
manipulated more.

Okay, great.

Okay, we should probably go from here.

Okay, so really quick now, Ash, and
let's not have any more questions on

really want to jump into the exercise.
If we got into the position between

February and March of 2003, with that
being a phase C

assumption, should we book a loss on a
spring and then initiate new?

your option after spring is confirmed.

So the question is around like here. So
let's say that we're thinking that this

is phase C, which we might at that
point.

This could be a point of entry.

This could be a point of entry.

So two, one.

So I'm kind of gonna do this in the way
of

Well, actually, it doesn't really
matter. So let's just quickly answer

question. So what do we do? Well, first
of all, where is our stop loss? Our stop

loss is going to be somewhere here.

So we would be hit if we're just using
the stop loss.

We probably would be thinking more of
getting out of this position even

before we are being hit.

Where? Well, as the price develops some
kind of structure and there is an

element of a time stop loss, within a
certain period

of time, my position is still
unprofitable and it doesn't work.

So this is two, two and a half months.

Would you be getting out of this
position or not?

So you could have the exit just based on
the time stop loss and time

characteristics. That's number one.

Secondly, we could get out and we could
just have a loss.

And this loss would be only, let's say,
half of

our position size.

Why? Well, because we only have... two
entries and we usually

would scale in in four segments right so
um even if it's a loss uh it's

only one half of the position size of
course there is a third decision here if

we're recognizing that this day had a
very unusual characteristic

of increasing downward spread on extreme
volume signature.

And if we analyze this bar, and we're
gonna say that this is a potential

then we might keep this position on,
even with the bar that comes next, right

here, because supply is diminishing,
result is diminishing as well, and then

have a high -low test.

So that could be a solution number
three, but you have to be an extremely

comfortable with your analysis and with
the bias that you're giving this stock.

So my preference is probably gonna be
something like this.

If I got in, let's say right here and
then here, at some point, I'm gonna say

my stop loss is gonna be somewhere here.

And partially I'm going to get out of
this position. So close, let's say, one

fourth.

And then it still will be exposed, but
not as much.

And then hopefully I will go through
this. And then obviously, even if I take

loss, My points of entry, just based on
what we just went through, are going to

be here, here, here, this bar, and then
we go into

this bar, this bar, this bar, this

bar, and so on and so forth. So again,
look at how we are accumulating this

position. By the way, we've done so many
campaign exercises.

at the Wyckoff Practicum course.

And I'm showing you exactly the reasons
of where we would be getting it, why we

would be getting in here, and so on and
so forth.

So this would be the sequence of
entries, possible entries.

And every time we enter, we want to
enter on the point of no return. What

it mean?

This is where the price does not come
back to this level.

Maybe it just came back somewhere here,
but everything else.

It's just the price does not return.

And that's just an element of the risk
control just based on how the structure

develops and where you enter itself.

All right, guys.

Let's go away from this.

And let's just see how much we're going
to do. So I'm thinking that maybe we'll

stay until six today.

We'll see.

All right, a volunteer.

And you have, actually, first, which bar
did we stop

at? I think that we've revealed this
whole chart, right?

Is that what we did?

So you have to remind me. Have we
discussed 52 to 58?

Okay, so I don't quite understand, guys.
Have we discussed 52 and 58?

Yes? Okay, so we've discussed that.

Have we really?

I think with Adam, we have stopped
somewhere here on 52.

All right.

Yeah, I think that we've discussed all
of this, and then we've stopped.

So let me discuss this, but I know that
I've revealed this right here.

So let me discuss 52 to 58, and then I
want to have a volunteer so that

we would start the next segment.

So let's look really quickly at 50 and
51.

We said that after the secondary test,
which was somewhat successful, look at

the levels of the supply here.

And look at where the price is
rebounding relative to the height of the

They're kind of rebounding off the one
half of that range, of that height of

that range.

So that suggested that we're going to
have an upthrust.

And the upthrust is usually an element
in phase B.

So there was a build -in trade right
here that would get us above 42.

And then at the first signs of the
deterioration, we're going to be looking

sell if this is a very short swing
trade.

And we see those signs of deterioration
in the diminution spread signature of

the 46, in the supply tail, in the
increased effort that doesn't produce

the same result as 45.

So therefore, right here somewhere, we
will be getting out. After that, 47.

develops a change of character this is a
small trading range on the intraday

basis we just don't see it on the daily
but this is the first bar since the low

of 44 that suggests that we are done
this is a confirmation and we go into

reaction and look at the reaction that
we have um the supply

increases and we were we were talking
about first emergence of the supply how

Change is gradual.

And think about this statement. Why
change is gradual in the markets?

it's very violent, right? And everything
changes very quick. Like the market

that we had in December, January.

We were in such a bearish sentiment and
then quickly that sentiment changes.

But even with that quickness, we still
had a week or two.

where we could have guessed that the
change is taking place and we could have

seen the signs of the demand coming in
into the market.

Well, here this is the opposite.

A change comes gradually at point number
45 because we see that the volume

signature has increased.

So what does it mean? It has some
suggestion that supply has come here.

yet the result is still favorable, so
that supply is small and does not

a lot of the result to the downside.

Then at 46, that supply has increased.

How do we know this? Well, the volume
signature has increased by itself,

number one, so supply has increased.

And at the same time, the result to the
upside has diminished.

So this means that on the more supply,
we're producing

more of the stopping action and more
reaction within the context of this

bullish upswing from 44 to 46.

So we see how from 45 to 46 supply
increases.

Then at 48, we're seeing that the volume
goes down.

And that suggests that

Demand by itself is deteriorating. And
we see how even if

supply is going down as well, we see
that the

close is lower than at 46, that the tail
at 48

to the downside, the supply tail, is
more than at 46.

So that gives us an understanding that
on diminishing supply, we are producing

better result to the downside. So there
is some kind of ease of movement built

in into that bar.

And obviously, looking at the
intentions, intention behind 45 was to

overcome the high of 42. We did that.
Intention of 46 was to overcome the high

of 45.

We did that.

and we committed at the close above.

Intention behind 48 was to overcome the
resistance at 46

and commit above it, and yet we don't do
that. Instead, we are closing below

the close of 46.

So that shows us the timing of when the
price is ready to go down because the

effort and the result at this point are
somewhat synced.

And in the practicum, I'm gonna show you
and we're gonna have couple of

exercises on synchronicity between the
effort and the result.

And that defines the beginning of the
reaction.

As the reaction starts, we see that
supply is present and then on the next

we see that supply is present but demand
is coming in.

volume increases, and yet the result is
better than the previous bar, what does

it mean? It means that demand is there.

Demand is present.

And we see that also from the tail, from
close to close.

Look at this close relative to 49 close,
and look at 49 and 50. They're almost

at the same level. So demand is
definitely there.

And if demand is there, The first thing
is just to stop the price from moving

further down. And this means that
absorption was happening on the way

down.

And now we're going to go into some kind
of testing.

And the testing supply is going to
locally increase at the level of the

And we see those testing attempts.

Number one.

number two, number three, number four,
number five, number six.

Quite a lot of tests here.

And the last two bars, I have in the
price characteristic of

a feather.

And I'm sure that on the intraday you
could see this. So we're coming into the

short -term resistance right here, and
look how the...

Supply and demand signature are
diminishing on the reaction.

There is some kind of grinding out
action into the resistance.

So we know that after the feather, what
are we going to have? We're going to

have some kind of momentum move, and
that goes into 52.

Now, right away, I'm thinking here that
52 is probably going to be

analogous to 45 and 46 if I combine
these two bars together.

So look at that. Does that look the same
or almost the same?

Doesn't that have the same intention of
overcoming the resistance at

46 and moving further up?

Yeah, so let's compare those.

So we're going to compare 52 and 45 and
46.

And here, obviously right away a
question is going to be should we

volume signature cumulatively or should
we compare

it just uh you know on absolute basis
and we could do both uh in this

case i mean obviously we know that
cumulatively there's going to be more

right here to push the price up less
effort here but I would use probably

an absolute value.

That just tells me that the increase in
the volume signature, which is one of

the highest increases since the selling
climax itself, is most likely carrying a

lot of supply.

So there is some supply increase.

So I know that there's going to be a
gradual change.

That's going to come. That's possibly
going to come at some point. Where is

confirmation of this idea?

Well, the first confirmation is just in
the bar number 52 itself.

Even though it looks bullish, and this
is where amateurs are going to make a

mistake, and this is the whole game for
institutions.

Amateurs are getting excited.

Weak hands are getting excited at 52.

It looks bullish by the conventional
technical analysis. Look at the volume

signature. Does the volume confirms the
price action?

Yes.

The volume goes up.

The price goes up. Volume confirms the
price.

A little bit erroneous statement in this
class because the volume needs to

confirm not necessarily just how bullish
the bar is.

It needs also to confirm a commitment
for this bar. What was the commitment,

the intention?

Was the commitment above 46, the high of
46? Do we do that?

No.

So we're seeing an increase in supply
that stops the 52 bar from

committing above the resistance.

Bullish or bearish?

Probably bearish.

Just because supply emerges and it has
the capacity to stop the

price from going further up.

So that's the first sign of supply.

emergence in this area.

Then the next confirmation is gonna be
at 53.

So 53, look at the level of the supply.

The level of the supply is increasing
and then we are producing

a relatively big supply bar to the low
and

I would be thinking that this acts, if
52 acts as a bind climax, 53 acts as a

change of character and automatic
reaction.

Kind of reminds me of 46 as a bind
climax and then 47 as an automatic

reaction. So again, we are comparing

these bars of these two areas using the

analogs. And we are seeing that the 53
change of

character, a change of character at 53
is more bearish

than the change of character at

47.

Multiple conclusions can come up out of
this.

We have not overcome the resistance at
46 .48.

We stopped.

Then we tried to overcome. We gapped up
on 53 and then instantly went down.

And that change of character is so much
more than at 47.

So what kind of deductions could we have
here? Even at that point, we could say

that it's more bearish because there is
more supply.

and there is more result to the
downside.

So we know that if we had a reaction
from 46 to 50, most likely

the next reaction that we're going to
have is not just going to be to this

level. It's probably going to extend.

And where would it extend to? Well, what
are our targets? So the low of 44, the

low of 40 and 41.

So this is our target zone.

And here with the target zone, we would
be thinking that if this is an

overbought condition for this target,
then this is going to be an oversold

condition.

And we would be thinking that this is a
good trade for us. So we would be

looking for an opportunity to open the
position here.

Now there is something wrong about...
Bar number 53, if we're thinking

establishing the position right away.

What is wrong?

Well, we see that on a short -term
basis, we have a tail that is a demand

So this demand tail suggests that short
-term, we're going to have some kind of

attempt to rally at this point.

Plus, think about the momentum on 52.

We still have not deteriorated that
momentum yet.

So that confirms that on a short -term
basis, the rally might happen.

So we just need to see. And if the rally
is going to develop, we're probably

looking at the trading range like we had
at 46, 48.

So next bar, 54, is a very interesting
bar because this is an analogous bar

to 52.

Look at the effort at 54 in comparison
to 52.

It's the same.

Yet, what could we say about the result
of 52 relative to the result

at, I'm sorry, 54 relative to the result
at 52?

Well, we see that the upspread is
definitely diminishing.

We see that the close to spread

is deteriorating as well. We are seeing
a tail here on this bar where we didn't

have any tails at the top of the spread
at 52.

So that suggests some kind of supply or
deterioration of the demand.

And with the volume signature, most
likely increase of the supply.

So we even thinking that there is more
supply

at 54 than at 52,

just because of how result is being
shown to us.

We also look at the close to close.

And we are seeing that definitely in the
case of 52,

there is more progression from close to
close.

So again, deterioration. And then the
intention was obviously the same.

The same as the bar number 46.

The same as the bar number 45.

The same as the bar number 52.

The same as the bar number 53.

The intent is to commit above the level
of the resistance.

And we still cannot do that. And now
commitment line is slightly higher even.

But even if we use 46 as a commitment
line, we're closing below it.

So therefore, no, intention was not
fulfilled.

So all of this is extremely bearish, and
the result of bar number 54 is

deteriorating after bar number 52.

So now we know that most likely we're
going to have some kind of reaction.

There is still some momentum on bar
number 54. We might assume that we are

the trading range at this point. We
would be looking at the phase analysis

so on and so forth. And then bar 55
comes.

So if we said that 54 is more bearish
than 52, then 55 is

much more bearish than any of these two
bars.

Why? Well, because the effort is almost
the same or just slightly below.

just slightly below or equals the
previous efforts here.

And yet the result is so much smaller.

We don't have the same type of spread.

It's very condensed, diminished.

We are not closing above the high of the
54

bar.

And that suggests that the intention was
not fulfilled, and that's bearish by

itself. So this 55 is a much more
bearish bar than 52 and 53.

And therefore, again, change happens
gradually.

And the reason why it happens gradually
is because there is no way that the CEO

or professionals could unload their
positions instantly.

If they do, they're going to...

influence the price in such a way that
we're going to see more of this type of

movement out of this place.

Here at the top, they're trying to sell
in such a way that would not move the

price significantly down before they get
rid of the stock.

And then what comes next?

Next, 56 has a deteriorating supply
signature.

And that's again...

gonna be something confusing to a lot of
amateur traders. Why?

Well, because first of all, they're not
gonna see supply at 52.

They're gonna miss increased supply at
54.

They're gonna miss supply at 55.

And then when the down bar happens and
they see that okay, well, maybe

there is a decrease in supply, and it's
still within the context of the uptrend.

We're close to this long -term support,
so I should get in here, or I should

add. And obviously, they will be
mistaken, because we know that all of

not, well, up bars, contain supply

signature.

in the volume signature.

So therefore, what is 56 then?

Because now that we're thinking what has
happened, we're seeing supply,

supply, supply, supply, and then lower
supply.

And yet what happens?

we are actually committing at the close
of the 56 below the level of

the bar of 55, which was the last
attempt to commit to the upside.

So we have not experienced this yet.

Look at this bar right here, 52.

Do we have a close below?

No.

Look at this bar, 53.

Do we have a close below? No.

54, no.

55, so I'm only going through the bars
that had some supply signature in it.

Yes, for the first time we have that.

But it happens on the diminishing supply
signature, and yet intention

has been satisfied and fulfilled, and
therefore

this looks like a timing tool for us to
consider

that this is when the move is gonna
start.

And by itself, with this commitment to
the downside on diminution supply

signature, this bar is an ease of
movement bar.

And that's how we would view it. Could
we open the position here? Yes,

absolutely. We would be thinking about
opening the position here.

And then we would be thinking we're
probably waiting for some kind of LPSY

backing up type of action.

maybe of a more manageable major sign of
weakness, which comes at

57, especially on the intraday level.

You will have to look at this more as a
trading range right here,

from 52 to 58.

So if 57 is a sign of weakness, then 58
is an LPSY, less point of

supply. so there are quite a few places
here that we would open the position or

we can open the position first bar at 57
you know still somewhat vibrant but

still look at the levels of the supply
it's still there so all of those bars

is just basically selling and uh the
first bar is

uh

active, aggressive to the upside.

So we should be expecting some kind of
retest.

So retest is coming like this.

And this would be our last point of
supply. So we could open the position

somewhere here.

And then as we break out to the
downside, this level is also could be

for opening the position. So three
places that we could do this.

Obviously, we could also do this on bar
number 55.

And the reason why we could do this is
because within the longer term

structure and some of you who sent me
the homeworks, you guys did a really

job because you were thinking that this
is our trading right trade here. It's

just up sloping.

And then this is phase A, test in B,
test in B, C.

And therefore, we could have a trade
here.

Okay, I don't mind that.

and I don't mind that trade at all. This
is a good trade.

I just want us to understand this.

How does it happen?

How do we compare on the analog basis
what is happening in the

second area compared to the first area,
on the SWIN18 compared to SWIN16?

All right, so if we're in this position,
how would we...

handle it how would we manage it well
let's assume that we are fully invested

already in this position 58 bar is
really good for us because it still

shows that supply is increasing on the
way down so we are feeling really well

um and you know there is a suggestion to
add right here which we would

And then look at how the price moves to
the downside, the characteristics.

Dimension supply signature, and as we
come close to our target zone, we are

starting to experience some kind of
buying as the oversold zone

acts more as a value zone right here.

So there is some buying.

around 59 .60, and then the price
continues to the downside and comes

the oversold condition, below 40 and 41
on increased volume signature.

So right away here, we would be
thinking, what are we doing here?

Are we experiencing a distribution, a
continuation of the distribution that

we have had, or could we possibly

be thinking about the trading range and
maybe more of the accumulation type of

action. So with that, guys, I want to
see who would like to volunteer

to go through the next segment with me.
So just say yes, and hopefully somebody

who has not done this before.

And we'll go for maybe 20, 25 minutes
after this.

I'm waiting, waiting, still waiting,
still nobody is saying yes.

Now I'm curious about why nobody is
saying yes.

What are your thoughts inside of your
head? Why are you not stepping in?

This is an excellent opportunity to
advance your knowledge.

Yes, it's uncomfortable.

I get this.

You don't want to do this. I get this.

But that's the only way.

All right, let's go to Doug.

Some motivational speech for you.

Hey, Doug.

Hey, how are you doing?

Good. I can't hear you really well.
Could you be closer to the microphone,

please? Sure.

How's that?

Much better. Much better, Doug.

All right. So I stopped the analysis at
around 61, and I said that there

are... probably a couple of scenarios
where either looking at the distribution

of this is just a first move or like a
second big move to the downside.

And the second scenario, maybe we're in
the trading range and we need to define

the bias of this trade range.

Let me ask you a more general question.

How would you approach this puzzle? How
would you approach this problem?

What are the first things?

answering those questions.

And basically the question is, are you
bullish or are you bearish at this

How would you think about it? I want to
understand the logic of

this thought so that we would either
say, yes, this is good, or we would

this logic. So what are you thinking?

Point 61, although it is a bullish bar
and it's finishing near the top

on its close, it's still, in terms of
the recent activity,

it hasn't really accomplished very much
yet.

There is some demand. I guess the other
factor that I'd look at is there is a

fairly big... Doug?

I lost you.

Sorry, I hit the button.

Yeah, so on 61, the extenuating factor
is there's a pretty big demand tail

coming in on 61.

But, again, its close is really not
really

moving too far up than the two previous.

bearish bars.

It hasn't really accomplished a whole
lot there.

Okay, so therefore the bias?

The bias to me is still bearish. Still
bearish. Okay, so let me ask you another

question.

It's kind of like a continuation
question.

For the bearish bias, what do we have to
see from the price and the volume

signature as well?

to confirm this assumption.

So what would be kind of like the next,
how would the price structure unfold

next if this is a bear scenario?

Well, there is, you know, that bar at 61
has one of the highest volume

signatures, which indicates there's
still a fair amount of supply that is

present.

Okay. But I'm asking you, if you're
thinking about the bearish bias,

how would the structure develop after
this?

Would it go down right away? Would it
consolidate?

What should happen here and why?

Okay, just looking at it, although that
bar at 61, again,

has, as I said, some...

demand tail it's the the level of
activity which makes me think as it goes

forward yes there will be a reaction but
how strong that reaction will be uh it

doesn't look like it would be very
strong so you mean up to 62 up to 62

that swing what is that swing 20 we're
calling it Okay, so the reaction to the

upside, okay.

Right. Okay. So there is likely, because
there has been some stopping action by

bar 61, but with the large volume
signature, it makes it a little bit

questionable of how far that any reverse
rally is going to rise.

Speculate. I'm trying to extract this
information from you.

Speculate as to what's going to happen
after 62.

I'm speculating that it is going to
resume its downward trend.

Okay, great. And that's kind of like
what I wanted to hear.

So therefore, if this is the case, if
the price is going to continue to the

downside from 62 and just going to go
down, then how would we label

61?

in the relationship to the 40, 42, 44,
55?

Could we label this whole thing?

You could label it, I guess, as a
spring.

Hold on a second. Are we talking about
the bullish scenario or a bearish

scenario?

Yeah, I guess, or a sign of weakness, I
guess, would be probably more

appropriate in a distribution. Okay,
let's review really quickly. So if we're

talking about a distribution, and in
this case, the original distribution is

right here at the top.

Right. And this is going to be
considered by us as a redistribution. So

redistribution is going to look like
this.

Right. A salient climax, which is going
to be intermediate salient climax, not

terminal, not final.

Secondary test, phase A.

Phase B, up thrust into phase C.

Major sign of weakness.

LPSY, and then a continuation to the
downside. I want you to label this whole

range.

Okay, so.

The way I was sort of looking at it is
61 is your sign of weakness.

62 would be the LPSY. Okay.

I won't do everything.

You won't.

And we're going back through there, then
up.

We're looking at 55, then would be the
upthrust. Okay.

Phase?

That would be phase C.

Yeah. And then you have prior to that
your secondary tests.

Do phase A first.

Oh, okay.

Yeah,

so that would be your sales climax
coming up.

42 would be your automatic reaction.

And, yeah, and then I was going to say
that you have your secondary test, which

would end your Phase A.

Okay. So see how simple that is, Doug?
Right. So Phase C, define Phase C,

define Phase A.

Everything in between is B.

You don't have to think about what's in
B here unless I'm asking you here, like

identify 46, 48.

So just a small shortcut for you.

Okay. So, yeah, it looks.

So here is a schematic, here is how it
looks.

Now, let's talk about characteristics.

So I want to extract from you the
information on the major sign of

in LPSY.

Okay, so major sign of weakness,
obviously in phase D,

are gonna have what type of the
characteristics?

It's going to have broken the support.

Okay, but in which way?

Because we could break support with the
spring as well. And our conversation

here is going to be more about this.

Major sign of weakness or a spring,
right? So

something like this.

In both cases, we will go below the
support level. So I want to establish

level of commitment, price commitment,
that major sign of weakness will have in

comparison to a spring.

Yeah, just looking at this chart, I
mean, one of the characteristics on the

spring would be that it does, which is
happening here, is it doesn't last very

long.

below the support, and there is a change
of character. Okay, so you're kind of

jumping forward.

I understand your logic there, but I
want us to stay on this thought for now

because that might, you know, I see that
you understand this, but I want others

also to understand as well. So major
sign of weakness is going to come down

which way in comparison to the spring?
You said that commitment of the spring

going to be...

Let's just call it temporary.

Yeah, I guess perhaps what you're saying
there is that you

have the commitment is to the downside.

To the close, would that be? Yes. By the
commitment, we are looking at the

close. Right. And we usually would like
to see that commitment, right? So let's

talk about the commitment.

That's okay if we're reviewing this,
guys, because we need to. Okay, so

commitment. How would we measure the
commitment?

This is a temporary commitment, and the
price just commits

with one close.

This is going to have a progressive
commitment to the

downside.

where we have multiple closes that are
below the levels of short

term commitment between the bars here.

So three closes.

So this is more of the temporary
commitment.

And this is, and then another one, a bar
like this. So imagine a bar like this.

This is more of the attempt to commit.

So it tries to commit on the intraday
level. We see this from the tail of the

bar, but it doesn't close below the
support.

Next bar, more permanent, more kind of
like significant commitment. At least

close below, but then it goes up.

More permanent commitment where we have
multiple closes.

And not only that, the closes to the
downside are showing some progression.

as they close lower and lower and lower.

So this is just on the commitment
itself.

But let's come back to the major sign of
weakness.

So you said that with this spring, we
are going to have somewhat of a

commitment. Maybe one close.

Maybe this is an attempt to commit to
the downside.

Now, what kind of commitment to the
downside would we have with the major

of weakness?

Well, it's a longer duration.

Okay, so stays... It stays below the
level of support for a

longer duration.

Support longer.

And this usually is going to mean that
you might have multiple closes.

Right.

Which I guess in this case you have
three, as it looks.

Well, we're only talking about the
progression of the commitment. If we

up bars in between these three closes
here on the commitment, we're still

to count one, two, and three. Why?
Because those are the most important

us below the support.

Are we staying below the support? And
are we progressing lower below the

support?

So let's say multiple closes, but the
idea that you said that staying below

support longer is the correct one.

Because if we're going to have multiple
closes below that would suggest that we

are staying below that price, that
support level.

Okay, so what are the characteristics?
Don't think about this right now. Don't

compare this. Don't think about this
screen. Don't think about the major sign

weakness. Let me teach you.

what is the next characteristic that we
would be looking at on the major sign of

weakness that would tell us that, yeah,
this is a major sign of weakness and not

necessarily a sprint.

And I'm going to give you a hint here.

I want you to look at the
characteristics of the move to the

61.

What would be the characteristic of a
major sign of weakness as the price

down?

Would it be accelerating to the
downside?

But I guess that applies also to a
spring.

But there might be a slight distinction
there.

Look at 37 to about 39, right? So this
is a sign of weakness. You could use

as an analog here in your comparison. So
what does this spread do?

Okay, so the spread is increasing.

Yes, increasing relative to what we've
seen, let's say, 33 to 35.

Right, which is happening in this
particular case also.

Okay, where exactly?

What are you comparing it to? So let's
look first.

Hold on. Don't rush.

This is very valuable.

What spread are you looking at downward
spread from 55 to 61?

If you would average all of the downward
spreads in this area, what do you think

the size of the downward spread would
be?

It looks like it would be around the
size of the major sign of weakness bar.

Like this one right here?

Yeah. Yeah, probably will be something
like this, right?

Right. Would you say?

Right, right. So this would be an
average down bar.

Okay, so is that threatening?

Is that threatening?

Is that as threatening as the downward
bars from 37 to 40?

No. Is it the same size as...

43, 49, and 53.

No.

Okay, so then what other characteristics
do we need for the major sign of

weakness here to show us that indeed
this is a major sign of weakness? We

it's in the spread, but also it should
be in the volume signature, right?

So we see how the volume starts to
increase here. And this is slightly

different. This is more, you know, comes
with an ease of movement. And even if

we said ease of movement here at 56,
look how different this is of movement

the distribution information here from
33 to 37.

It's definitely a larger.

A lot more volatility and a larger
spread in those bars.

Yeah. If we would compare two swings, we
would compare a swing from 37 to 40

with the swing from 55 to 61.

Which one is more bearish and which one
is more bullish?

Or let me rephrase this. Which one is
more bearish and which one is less

bearish?

well, definitely the 37 to 40, what is
that, 41, is more

bearish. Yeah. So we want basically to
see the volume increase on the major

of weakness. Why? Because we want to see
selling, increase in selling.

Do we see a substantial increase in
selling in this area?

So look at, let's say,

58 as the bar that does have some
selling.

Which bar else here do you see a
substantial selling?

I'm going to be extremely detailed here
because I want you guys to get this,

and, Doc, I want you to see this as
well.

56, does it have a lot of selling?

No, it doesn't. Okay.

First downward bar after 57, this one
right here, does it have a lot of

No, it's small again.

Okay, so 58 we discussed. Yes, there is
some selling.

Okay. And then next bar to that.

Yeah, same thing. It's relatively small.

What's the intention behind this bar?

The intention would be to go beyond bar
58, which it did.

It's to the downside.

Well, we see that there is an attempt to
rally here.

So in reality, this volume signature is
showing us an increase in the demand.

And the demand comes because of this bar
right here. This is where they bought

in before.

So someone's thinking, I'm going to do
the same. I'm going to buy at this

because this is an area of the support,
and then the price is going to go up.

They're lucky for a moment there that
the price goes up, and then

it's being sold into them again.

So we can't really say that this is a
lot of selling. Some buying is behind

as well. Okay, what about the next three
bars or the next four down bars?

Yeah, they are.

The volume is down. I was looking at it
from that intermediate bar 2 after

58. There's an increase in volume
happening up to 61.

Don't go away from me. Don't go away
from me. Just stay with me. Stay with

Because there are so many details, if
we're going to just side note, we're

to lose the logic here. So looking at
this volume signature, is there a lot of

selling on the way down as we go down?

Probably not.

Yeah. Probably not. Then we go into the
59 to 60 area. There are attempts to

rally. So some demand starts to occur
here.

So here is a function of the demand. And
we're still failing. But are we failing

on the increased supply that's coming
in?

Not at this point.

Demand is increasing and the volume
signature locally increased.

But it's not as much as what...

selling we have had before.

So selling is going down.

So we kind of see through the
progression of this reaction that the

actually going down. So now let's
combine everything.

And again, just kind of stay with me.

We've said that we need to see what's
going to happen with the commitment

the support.

We see only one close below.

And then the price recovers.

And recovers relatively quick, right?
Then we said that a major sign of

is going to have the characteristics
where the volume is increasing and

therefore supply is increasing on the
way down.

Plus, the down spread is showing some
kind of

also element of the increase of the
result.

to the downside.

Do we have?

Yeah, we don't have that.

We don't have that.

Okay. So if we don't have that, then
it's probably not a sign of weakness, at

least for now.

At least we need to confirm this.

Then probably we're thinking that this
could be a potential spring.

Okay. So now, again, we're not done.

So guys, don't think that we've defined
this.

Doug, let's talk about the spring.

What kind of structure the spring would
have around the support? So we are

committing to the downside, and then
what should happen after the spring?

It should, as the name implies, it
should spring. There should be a

Okay, so we have that, so that's the
first confirmation. The price

commits below the support, has some kind
of demand signature on both of the

bars, and the price comes back into the
trading range. So we are confirming a

couple of things here. Number one,

short commitment, temporary commitment
to the downside.

Number two, emergence of demand.

Number three, coming back into the
trading range. Trading range. Number

what should happen after that comeback?

It should test.

Test.

So we are waiting for a test to happen.
If test happens, this is going to be

another confirmation that this was a
spring. What is the next one?

After that?

Yes.

then it should rise through the trading
range to some sort of sign of strength.

This commitment below this local
resistance that is being created between

below the spring and below the test,
this high right here, I'm going to give

name to that because this is such an
important localized high right here. If

have a local breakout of that, It's
going to act as a confirmation,

final confirmation that this was a
spring.

Let's kind of like stay in this space a
little bit. Let's observe all of this.

Okay. So we are thinking that does not
look like

a major sign of weakness.

We might still be mistaken.

If this is the spring, give us the test.
Test number one is there, temporary

commitment. Test number two is there,
demand is present, and there is

on the way down there.

The test number three, the price comes
back above the support level and comes

back into the trading range. We still
don't have test number four.

which is the test itself, and we don't
have the test number five, which is the

local breakout above the resistance
level, which probably will be somewhere

here.

So this is what we are looking at. If we
have this, the breakout,

this is going to confirm the bias to the
upside, at least a

short -term bias.

By the way, really quick question, Doug.

If this confirms, actually two
questions.

If the breakout confirms that this was a
spring, where is the target for that

trade? That's number one.

The target for the trade would be up at
50, well, in the area of 46, 48,

53. Okay, great. So this is our target
number one.

If this is a spring, then what is the
rally? How would we label the rally?

How would you label the rally?

Think about spring, phase C.

Oh, it'd be phase D, yes. Phase D.

Yeah. And this rally would be labeled
as?

Major, well, major sign of strength or
possible major sign of strength. Major

sign of strength.

Where in phase C on a spring, then the
next thing

that's going to happen is phase D and a
major sign of strength.

So our target is not necessarily just on
the boundaries of the resistance here

of 46, 48, 53, 55.

Because what is the definition of the
major sign of strength?

That it goes above the trading range,
closes above.

The trading range.

Closest above the trading range
boundaries.

It didn't make a commitment above
resistance.

It makes a commitment above resistance.

Right, exactly.

So the major sign of strength in
comparison to all of the upthrust that

before would travel through the trading
range starting with, you know, at the

loss of phase C.

would commit above the resistance
cluster that was created in

phases A and B, and then would come back
into the area of that resistance. Now

that is going to act as a support.

So we have a target number two as well
somewhere here. So two targets. So that

was the question number one.

Secondly, if that were to unfold, where
would we open a position?

You'd be opening a position after that
test.

After the test?

The first test.

Where else?

Okay, so number one.

Right, well, up at the backing up action
that will hopefully occur.

You mean right here?

Yes. Okay, but before that, are there
any other places?

I guess perhaps after it.

It passes the level of 62 you might
enter?

Absolutely. This breakout acts as a
confirmation, as we said, right? Right.

this confirmation equals just a point of
entry for us. Why wouldn't we get busy

here with this trade at this point?
Because if we're thinking that target

and target two are so far away, it's a
really good swing trade.

Even if we are wrong and this is not a
major sign of strength.

and it's going to become an up for us
like we've experienced before.

It's still a really good trade because
we have a lot of distance here.

This was a very quick trade. We probably
might not even consider this. This

trade was quick and also we might not
consider it because within the

contextual structure of where we are,
phase B, we're not necessarily that

about this. But this was a good trade.

And then this could be a good trait.

So these are the two swing traits within
the context of the structure.

And then when we are in this position,
and if the major sign of

strength characteristics are going to
unfold, like what we've done with the

major sign of weakness comparison to the
sprain with dog, we're going to do the

same process when we're going to look at
that rally. And we're going to say, are

there characteristics?

of a major sign of strength as the price
moves up?

Are there other definitional
characteristics of the major sign of

the price approaches the resistance?

Is there any supply that is starting to
emerge in this place?

And if it does, what's the rate of
absorption for that supply in this

level?

And then we'll go through the same
process that we've done at 61 with the

sign of weakness at the spring.

So therefore, on the way up, we do have
quite a few opportunities to establish

this position.

The test itself could be our first point
of entry. The breakout above 62 could

be a second point of entry.

Any type of significant bars to the
upside as a sign of strength bar

could be also.

another point of entry.

So we could potentially have maybe like
two, three points of entry here. That's

number one. We definitely want to slow
down as we're approaching the resistance

because we don't know if supply is going
to come or not.

We'd rather wait, as Doug has said, for
the backing up action or a confirmation

of that.

So that's going to be kind of like our
strategy.

Okay. Yes, sir.

Between 61 and 62, what sort of threw me
off is the declining volume signature,

and that's what made me think that it
was

not a spring.

Yeah.

Okay, well, let's definitely address
this, and then we have one more point I

want to show you guys, you know, where
we are with that, and that's going to be

your homework.

We're definitely going to go much faster
next time. Doc, don't think that this

is you. Everything that you and I have
done is fantastic.

That's great. Thank you very much.

Yeah, because you brought up correct
thoughts, and we, you know,

correct in a way of your thoughts
produced correct questions.

And it was great how we went through all
of this because

the logic was presented.

So we could be mistaken, guys.

And it's not a huge mistake to be

mistaken in our analysis. It's a huge
mistake not to analyze it and then not

adjust ourselves in the logic.

And that's exactly what we've done here.

But let's come back to the question that
Doug is asking.

The volume signature is diminishing.

So therefore, what is happening with the
supply?

The supply is diminishing. What is
happening with the demand?

The demand would either be the same or
is diminishing somewhat. Actually, it

would have to be increasing a little
bit, otherwise it wouldn't go up.

Okay, so this is where our analytical
issue is lying.

So could we have this situation?

Could price go up on diminishing demand?

Yes, if supply is exhausted.

Yeah, if supply is poor or exhausted. Is
supply poor

or exhausted or diminishing here?

Yeah, it's diminishing, right? It's
poor.

Demand is diminishing too.

But yet, what is the price doing?

Price is going up. This is what we
discussed last week, I guess. Yes, yes,

yes. Remember that chart with Home
Depot?

Remember the ice cream story?

Yes, great story.

So ice cream story is all about
diminishing supply, diminishing demand,

the price is going up.

So kind of the same here.

But there are two concepts here.

So the ice cream concept is all in how
the price goes up and how the volume

the supply and the demand are going
down.

But the one that precedes it, and we
didn't go through this a lot, was bar

number 61 and bar before that. On these
two bars, we see that the volume has

emerged. And it's only temporarily that
the price went down. So the question

here is, how could the volume signature
increase so much? How could supply

increase so much? And yet, only one
temporary commitment to the downside,

then the next bar, it tries to come
back.

So we know that with this increased
volume signature, we're probably

about the increase of the demand. So
therefore, we're thinking about

on the way down. That is happening.

Wow. Great example.

So then...

We are observing the supply on the way
down, and then supply is exhausted, it's

diminishing, and demand is diminishing
only because it has come here.

It's sufficient.

There is no more need for additional
demand, at least at this point.

Unless supply emerges, demand might come
back and emerge again, if the CEO is

thinking that this is a good value for
me here, and this is a good selection.

And at 62, that doesn't happen, does it?

The supply doesn't increase
tremendously.

No, there's nothing. So if we would be
considering this as a test, we probably

would say it's a successful test.

The test is happening above the support.

The test is happening as a high or low.

We obviously need to reverse that.

We had a short -term high or high right
here.

And supply is...

One of the lowest supply signatures on
this chart.

And one of the lowest signatures since
the selling climax.

So it looks like a good test at this
point, at least for now.

So, Doug, that's the main point for you,
just, you know, on a kind of like

personal level, right?

And personal, I mean, like for you on an
individual level.

The price might advance.

when demand is diminishing, and that
would be the function of exhausted

And we definitely want to combine that
concept with the absorption on the way

down that we see from this volume
signature right here. Then also add the

of the structural analysis,
characteristics of the major sign of

comparison to a spring.

And that kind of brings me – I'm going
to make a note. I'm going to make a

for maybe next cycle where major sign of
weakness is compared to a spring, and

then upthrust is compared to a sign of
strength.

And I think that could be a better
explanation.

What else, Doug?

It's all contextual, isn't it?

It is, yeah.

Of course, yeah. The context is always
going to be a layer for us. So we're

going to have the layer of
interpretation of the bars, volume bars

bars. We're going to have the layer of
the context in terms of labeling. We're

going to also have the context of swing
analysis like we did from 55 to 61

compared to 37 to 41.

There's going to be also the layer of...

characteristics of the specific WCAG
events.

So the comparison, right? So what, how
it should look like. And that's why I'm

saying to you guys that all of the
material that we've learned, you know,

the first months, you gotta review, you
gotta go back there, you gotta pull out.

from your library of slides, you know,
that slide on major sign of weakness and

a sprain. You know, what are the
differences? You know, how do I

know, interpret it here and so on and so
forth.

Okay, great.

Doug, one more thing here. Let's see
what happens next.

Okay, so here we're going to start next
time with this slide, but what I want

to, talk to you quickly here is

actually let me just pose this as a
question for the homework. And obviously

homework, guys, is just to watch this
segment again of the exercise, the

exercise segment.

Rewatch it and make notes. Send those to
me.

But the question, the homework question
is going to be this.

Bar number, I'm extremely interested in
bar number 64 and 65.

Those are the breakout bars.

Are we entering the position on these
bars or not?

So let's make this a homework.

And this is where we're going to stop
today.

Would you be entering on these two bars,
on the breakout bars? Because our

strategy was a sprint, a test,

and we are buying here on the breakout.

So the question is, would we be buyers
on bar number 64 and bar number 65?

Doug, again, that was a really good job.

And I commend you for stepping in and
being in that

maybe uncomfortable zone, but going
through this and learning and staying

the logic of it and kind of like
finishing this. So really good job.

Thanks a lot. That was great.

Okay.

All right, guys, this is it for today.
Don't forget the homework.

Definitely we're going to continue in
the next class.

I think we're going to have less of the
theoretical material in the next class.

I want to finish this exercise.

If you can believe I have 30 more slides
on this, 30 plus slides on this, so at

some point we're going to go really
fast.

A question here from Nilesh. Could you
please upload power slides for this

exercise?

So usually we provide you guys with,
with what, with the PDF.

Is there a difference for you on eyelash
between PDF and the power slide?

You know, I could definitely do that.
You mean the homework power slide?

Okay, yeah, I could do that. I could do
that.

I probably should do this in a slightly
different way, but yeah, I could

definitely see how it's easier than the
PDF.

I'm just thinking about all of these
numbers because in the PDF it's

but I'll probably just copy -paste it
and still paste it into the PowerPoint.

So yeah, thank you.

All right, guys, I'll see you next week.
Good class, good job.

We're moving along, so let's just finish
it next week. Thank you, guys, and bye

-bye.