Original subtitles

Hello, everyone. Today is November 26th, and this is our session number 12 of

the Wyckoff Trading Practicum course.

We have four sessions left, so I kind of like how the course has

evolved. I mean, obviously, we're paying a lot of attention lately to the bias

game. Rightfully so. I mean, it all starts there with the bias.

How do we interpret it? You know, how do we get to that point?

of being comfortable.

I think as a group, we've made a really, really great big

progress because, you know, once

I started asking you guys, you know, to be accountable to

what you have for your bias game and all of you are sending me your, you know,

your percent or

you know, the number.

So I see that you guys serious about this. So it's great.

And then obviously that required me to be a little bit more detailed and

in the way how to explain this.

So I still feel like we're still residing in that space and that's fine

That's totally fine. That's what the practicum is about, to practice.

We are practicing after all.

In the announcements, and this is very important for this class because you

are more advanced than WTC members, students.

I'm going to talk about the long -term campaigns in December.

And this is the subject that we obviously discuss here in this class a

know, in the context of some kind of exercise or some kind of trade.

So we're seeing a lot of...

price cycle type of charts that I give you.

So the key is going to be there to understand kind of like deeply

how all of our trading is rooted into the price cycle, into that long

-term campaign, and what are the best places for us to actually swing around

swing trade around it.

I also will be talking about sustainability of the trends.

I think this is the subject that, you know, is extremely important.

This subject also leads to, again, the selection on the swing trade, you know,

where we're taking it and which part of the structure and so on and so forth. So

there are quite a few topics there that are more advanced. So therefore, for

you, this is a highly appropriate material.

And registration is open for the part two of the WTC, the practicum, for next

semester. I'm expecting that some of you are going to continue just as some of

you have continued from the previous semester. We have a lot of alumni, you

know, in this class from different cycles. And the reason why is because,

once a week.

You could devote this time to focus just on practice, especially if

your life is kind of hectic and you want to have that structure. Every Tuesday

you know this is the class, like you're watching that video each Tuesday or

maybe over the weekend, and you have some kind of structure to study and to

acquire more skill.

It's helpful if you do this just once a week because if you don't do that and

you're just listening to TV, reading articles, that's definitely not enough.

want to practice. We want to take the chart. We want to look at the chart,

analyze, and then post -analyze our mistakes.

Unfortunately, that's a long process, but with that comes the quality of the

analysis.

do today obviously a bias game as i mentioned anatomy of the trade some q

a's market update and then um exercise number eight i believe

and then we are on bias not on the selection as usual

everything that we've talked in this classes is for educational purposes only

all right so in here is the bias game um

Majority of you actually, I would say like in the 90s, I think we

are, maybe we had maybe like one, maybe two.

I don't recall exactly, but this one was somewhat easy for you guys as a group.

I don't know exactly what it is, but let's just go

through this, I guess.

As the last time we started going through the

structure of the analysis, what is it that we want to do

initially?

So we don't want to be caught up in the initial self -talk that we have, or this

is accumulation or a distribution.

But at the same time, as I'm reading your emails, some of you are saying

actually like the general look first, and for me to kind of gauge as to what

I get in response from my subconscious.

I think that's totally fine.

Somebody was commenting that this is a flag, a bearish flag, so I see that

away. And I think that's really good. And then you apply your Wyckoff tape

reading over this, and you confirm it or not.

Having said this, don't make the final judgment yet and try to still

go through the Wyckoff story from left to right.

That will bring the whole logic into the point of where we are on the last bar.

I really like the analysis and I thought I needed to show this maybe next

time. uh from eric um eric is showing kind of like different

phases in different colors so for instance this is a phase this is a phase

this is a phase and we kind of see how you know what what he means by that

um so for instance something like like this so uptrend consolidation

uptrend then downswing

And then the last one, attempt to go up, right? So an attempt to go up. And then

you start creating this story from one phase to another, from one period to

another. All right, well, uptrend.

What do we see in this uptrend?

Volume is expanding.

Price is expanding.

Looks very bullish.

That's the story.

We don't have to go into a lot of details here because we know what has

happened. We see, you know, characteristics. We make a note of those

characteristics because we will be comparing, you know, this rally

with the rallies that are going to come later.

Let's look at the reaccumulation, how it starts. There is no

volume whatsoever.

No selling.

That's suggestive even in phase A and B of a reaccumulation.

And then once it go higher and then higher again, you

kind of see how more of the

availability of the supply moves the price up.

It's not that demand is very active, although in some instances it... it is

supply comes in right away so there is this demand supply

type of relationship until supplies finally being exhausted in phase c

and then after that the new regime starts the new section

the new environment and we've seen that demand is still active

into this first move up.

Supply comes, produces somewhat of the aggressive reaction and we kind of might

be thinking, what is this? Is this a change of character or is this just a

preliminary supply?

So the price overcomes resistance on

multiple closes.

So that's a suggestive steal of bullishness that we see. The only thing

we're seeing is now a little bit of the divergence between the effort, which is

diminishing relative to the previous rally, and the result, where we have the

diminishing thrust, specifically up thrust.

This is a momentum tool that Wyckoff used himself on charts.

Significant high, significant high. How much progress do we have from one high

to another?

And there is much less over progress than let's say between high number one

two.

So that's how Wyckoff would be looking at this. Of course, don't forget

log scale here.

But you can think in terms of the percent. You don't have to think in

the price.

Percent actually makes also a lot of sense, even sometimes even more.

All right, so what happens next?

So somewhere here we see that maybe a precondition for a reaction. We said

the effort diminishes and we don't have a lot of result to the upside.

In itself, this is not necessarily a signal. It acts as a precondition to the

signal. So what would be the signal itself?

I think any type of sign of weakness action

would act as a signal itself, and then a continuation

of this downtrend will act as a confirmation.

So we probably would be thinking here about

this trend, maybe even this one

right here.

So there is a couple of places where the trend fails.

And that happens after this precondition.

So this failure has a little bit more relevance to us than, let's say, maybe

some previous attempts.

Once we go below into the sign of weakness right here, then, you know, we

definitely see this as a signal.

This is the signal that this uptrend is done. At the minimum, we're going to

have a trading range, and at the maximum, we could have just, you know, a

hypodermic action to the downside.

It kind of looks a little bit hypodermic. Yes, speculation on the way

speculation, urgency to sell on the way down.

As the price goes down, what we want to see is we want to observe different

fragments of the reaction.

So obviously this first reaction that is going below the levels of the

preliminary supply, let's say, and later we could label this more as a buying

climax, by the way.

with an upthrust of the distribution right here.

And then this would be a major sign of weakness and a major LPSY.

Or we could say that we're looking at this whole formation,

big formation.

And then we're thinking preliminary supply.

Bind climax.

Automatic reaction, secondary test.

Then secondary tests as minus sign of weaknesses in

phase B.

And then what's interesting with this picture is that every time we're trying

go up,

This rally, this rally right here, this rally right here.

We're not reaching this high.

So if we're thinking that this is the distribution, then we're thinking about

the TP formation.

TP formation really quickly.

Let's go through the elements of the TP formation just to repeat that.

Speculation on the way up.

Then urgent selling by CO

in phases A and

early B.

And then inactivity

by the CO later.

It brings us to the area where the volume generally will go down, supply

and demand will go down.

The rallies will never touch the resistance that was created by the

climax.

So buying climax won't be tested.

Also, majority of the volume signature

is

going to be in that phase A, phase B.

The resolution of the apex formation,

which basically forms in phase B to C,

is going to be increasing volume signature and also breakdown.

This will be institutional capitulation and

those are usually going to be institutional trend followers.

This is where the trend is going to fail in the in a major way.

So these are the attributes of the TP formation, you know, how it starts, how

starts to develop.

Again, there is a lot of urgency by institutions to sell on the way down.

And we kind of could see this in this bar, a lot of it.

Although there is a lot of buying in this bar, you know, this.

But somebody is actively selling even at this lower prices. So it's very

interesting how supply has increased so much.

This big bar will not be just complete demand or complete

supply.

This type of bar will always contain both.

and in a lot of quantities.

So we could assume that there is a lot of supply here. So even at this lower

prices, they are selling after the gap.

So they want to get rid of this really quick.

So there is some urgency to do that.

Obviously, somebody is buying into the oversold condition just for this rally.

And then again, consistent selling, selling again, selling

into...

into the climactic actions as well.

So there is quite a lot of selling that is happening and it's increasing on the

way down.

And it produces a meaningful reaction.

All of our gains that we have had before, they're all gone.

So this is a significant move to the downside. On the percentage basis, we're

looking at 50 % decline or so.

So we are in the downtrend at this point of time.

If the bias right now is down, then this is how we're approaching this area

right here.

So what is it that we are looking for?

Well, we are looking at probably a slow confirmation, something like this.

We are seeing how there is a very clearly defined up thrust.

And it came on an increased volume signature, so that tells us that there

increase of supply here.

And what happens after that? The price actually goes down, goes through the

whole trading range.

and then commits to the downside in the meaningful way on

one, two, three, four, four progressive closes to the

downside.

And then the price tries to rally, and it rallies exactly into the area of the

resistance that acted before the slope and support.

So this is where we would find LPSY.

Any type of breakdown after that, we would welcome too short.

Because there is a little bit of the momentum to the upside, you want

to wait for the test, and then your entry is just basically through 50.

that fails on the last attempt to retest, so a bar just close below

or a break to the downside bar,

Or you might be thinking, you know, a breakout of this line right here or even

break of this line right here. All of this becomes a zone where you could

initiate your positions to the downside.

And at this point, you're probably thinking, you know, well, how do you

about what supply is available or what could happen after this? Like, what

be the character with which the price is going to move?

Again, I refer to the story of the bias.

We have that urgent selling here by the CEO.

We have some value selling into the highs by the value investors as well.

And then after that, there is a bunch of selling into the strength, right? So

for instance, here we have this selling.

Then here we have this selling.

And then after this, probably on earnings.

we have a gap so there is some selling selling selling selling selling

so um as we look at the attempts to go up

there is definitely some selling that is happening so um that does not allow the

price to go up significantly and it stops it at some points that were very

important before and the latest rally is extremely weak there is if

there is an increase in the effort it doesn't really takes us even above the

that we have here so looks weaker next rally looks weaker uh

and if we're gonna fail again tactics are just gonna be uh to open as the

starts to commit to the downside and probably to open fast why because again

This type of formation that we talked about, this TP formation that concludes

with Apex, suggests that some of the ITFs are still in the position.

They did not leave this position, and that's why we have some bullish -looking

higher lows and sometimes local higher highs.

So that confuses people because on the technical basis, imagine all of the

systems are giving the signal that this is a breakout.

So a lot of people are going in into this position, especially somewhere here

a much more major breakout, and then this is where they meet institutional

supply.

So if there is still some of the institutions that are trapped in this

Once the price is going to start moving down, the price is going to

accelerate.

So let's just see if that happens.

And the volume signature, specifically supply, has to increase because

capitulation is going to happen.

If this is not going to happen, if supply is not going to increase, but the

price still goes down, then we will see more of the ease of movement.

where they just sold everything, and then a smaller supply moves the price

easily to the downside.

One way or another, giving up this position is probably going to be very

fast for institutions, so we're still going to see some kind of momentum to

downside. Let's see what happens.

There is definitely some acceleration, I would say probably more to the end

here, although the gap also is a big event, you know, a huge event. But, you

know, and see how the volume is actually not, yeah, so that ease of movement

happens, right? So I think that second interpretation was

correct. It's more about they have sold in this area right here.

So under the weight of inactivity here, and we see how volatility condenses

here, then it's just an ease of movement to the downside.

This is what I think is happening with the market right now.

We have just an ease of movement after all of the supply has been observed.

And if some of the supply temporarily comes in on profit taking, it's quickly

being observed. But we'll look into this.

Okay, let's see what the Twitter said.

Accumulation, 52%. I think, again, you know, it's just a pattern, a

structural pattern where we have higher highs, higher lows, and that diminished

volatility.

Because the volume signature goes like this, that's what confuses people.

But you have to take into the context of where you are right now.

What is the context? The context is the downtrend.

So at this point, you're going to still think of the rallies as

attempts to overcome that context.

Today, also in preparation for the session, I was going through some of the

charts, and I've seen a pattern like this.

And it was, and then I realized it kind of looked the same.

So what is that pattern? You know, what might be the confusion here?

Going into phase B, there is a lot of strengths.

So imagine if we're just like looking at the chart somewhere here, and let's say

on this breakout, how are we commenting about the bias?

We're probably thinking that, well, supply has diminished, there is some

strength, we're gonna probably break this high and go up from here. And maybe

even a first initial target is gonna be somewhere here.

We should try to do.

So initial trade here should be okay, but then an overall bias obviously would

be identified incorrectly.

So the key was, actually the key is a little bit later

on. So then what happens next is very interesting. We have a

higher low, which could be suggestive of what? This reaction we would be

comparing to this reaction, and we would be thinking here, well, result is

diminution, right?

And then how's selling behaving?

Selling, selling, selling again.

So it goes up, effort increases, result diminishes.

And we would be thinking at that point still bullish.

And here we're kind of being caught up also in the character.

There is more of the momentum to the downside on the previous reaction.

than on the current reaction.

So we would be thinking that we're gonna have a rally.

So the key to this was this.

We wanted to see if we could have a test first.

Because this is diminishing supply signature, we are expecting the rally.

And we want the rally to have, you know, kind of like ABC structure here.

So ABC.

But then after that, we want to see a continuation, meaning that a

would be a bar acting as a significant bar and commitment above

this reaction, most recent high.

Then this would become a bullish pattern right here.

But as the pattern fails, then it becomes extremely bearish.

So just an observation that I was just going through the chart today.

All right, next bias game.

What do you guys think?

Accumulation or distribution?

And I'm going to confuse you here, so I want your answers.

So think about this for maybe like 20 seconds, and then let me know.

All right.

What do you guys think?

All right. Maybe one more.

Interesting.

Very interesting. Okay.

Only one answer came from you guys, and that this is an accumulation.

Do you know that the contrarian opinion would be to go against this accumulation

opinion, right? So that this is a distribution.

All right, guys. Well, first of all, the answer is going to come

out. on twitter on friday so you can catch up with the solution to this game

friday if you're unwilling to wait until tuesday as usual i'm waiting for your

homework emails on the bias i want you to still now go through what

we do exactly with the vertical chart and that is we want to segment

this and think about what is happening there And all of the information about

the price movement is here, right? We know what this chart is, so I would just

almost insist, go column by column. I want you to get a feel

for the PNF, how the price moves.

And you will see in certain moments where momentum starts to develop, where

momentum starts to fade, where supply comes in.

And, you know, how supply influences the price, then where demand comes in,

where, you know, demand starts to influence the price.

There's going to be a question today about synchronicity. You know, P &F

lot of those concepts, like synchronicity, where there is a

upside, where there is a synchronicity to the downside.

And if you want to use the effort versus resolve concepts, look at the volume

signature.

That's probably my favorite view of the PNF. It's with the volume because the

columns condense a lot of price action of vertical bars.

So you have a concentration of price movement in one column.

that produces a more meaningful volume signature.

And then I also would like you to think about this question.

What is going on with the volume signature, overall volume signature from

beginning of the chart to the end of the chart?

I mean, I'm definitely seeing that the price is, you know, from the first

column to the last column, the price has increased.

I understand that.

Then why is the volume signature decreasing?

So I want the answer to that.

All right, guys.

That's going to be a fun one because we usually don't do the PNF and

we could definitely do this. And this is just another tool for us to

understand how the price moves.

All right, let's look at the markets.

Let's look at the markets.

We could see that, again, on all of the comments that I've been making

on Twitter, so if you want my market commentary, which I will try

to avoid not to do this week, just want to...

get my mind off the market and just in general just rest.

But we are breaking a

resistance line.

And not only that, we're committing above it.

And we're doing this on the lesser effort.

So that's just an ease of movement that is happening.

have to observe is the areas where supply comes in and then it creates some

of condition where there is a very much short -term volatility

and that supply is being actively observed and quickly

the price goes away from that area.

So I don't think that the trade, and Mitri is here, I was watching his trade

you know on twitter i don't think that the trade on volatility is actually a

trade for now if anything you know when

we look at volatility let's say you look at the volatility what do we want to

see in volatility we want to see

All right, yeah, it's okay. Let's do this.

Look at the volatility.

Yeah, I know that you exited because there was no reason to hold on to that

after the initial break to the downside and the next bar, which was kind of like

a test.

So I thought that you might have.

But look at how volatility shows the environment for us, right?

Until we have something more significant, like this bar right here,

right here, this bar right here, you know, we're probably not going to see,

know, a meaningful correction of like, you know, like 7%, 10%.

So that's not going to happen. And this is just an environment of the uptrend.

When did this happen before? I was just...

you know thinking what would be that analog for us and i

thought that maybe i found something close so you guys tell me

what you think of this texture

to me it just feels the same way the

way how the price moves

Yeah, here it is

Just

want to want you to see both

It's kind of like grinding up.

Goes up, has some kind of small supply, goes into a smaller trading range. Goes

up, has some kind of small reaction.

But it's not like this reaction is very significant.

And that's kind of like the course with which the price was going up in 1995.

And I'm thinking that we are having something of a similar sort.

where there is a lot of disbelief that the price will go up right now.

Like everybody's talking about, yeah, it's bullish, bullish, bullish, but

just like, oh, maybe we're going to have a reaction. And maybe we will. Maybe we

will have something more like this, where we are having an upthrust, and

we're going into maybe another upthrust, another test, and then we have some

kind of reaction.

That reaction should not be as deep, but... you know it can happen it can

but at the same time think that we could have this type of action

just going up and up and up and notice where it you know

started it started at the end of the uh last quarter in december we had

the same thing happening last year at the time below here we are

starting a little bit earlier in october um and uh but we still could

think about the analog uh the price here is making the new high

around february much somewhere here so this is one two

two months about so this is exactly where we are making a new high

And it's around the new high that we're having some kind of hesitation. And then

again, a breakout out of that. Because think about what people were thinking

here at this point of time when it's making the new high,

right? They're thinking, white coffins are thinking, sign of strength.

What should follow? A backup action.

Okay. Well, a backing up action, so let's say that maybe this is the end of

sign of strength, not this one.

So this whole move right here. A backing up action should develop, should go

somewhere here,

might have some kind of duration behind it, and then it just does this.

Nothing else.

And it's all built on the sentiment that Still, the economy is not improving,

you know, although nobody really is kind of like, you know, if you look at the

fundamentals of this economy, 70 % consumer -based, and if you look at the

consumer indicators, unemployment is, you know, at the very, very low

number right now, and we're still not seeing any objects

in unemployment.

it's going down.

So until that type of environment for consumers is going to be present, we're

probably going to have that type of move where there are some worries on the

government side, maybe some on the corporate side with earnings, but the

consumer is extremely strong.

And that consumer is kind of like carrying us out of this structure.

But slowly, with a lot of attempts to profit take, which lead to nowhere but

small reactions.

Something like that.

And then we go into the spring with this type of action, into the

new year first and then into a spring.

So I'm thinking that, you know, could we possibly have this type of character,

which that just travels like that.

So that's just a very quick observation on the price itself, on the character

with which it moves.

So everything is still extremely bullish for the markets. Russell, as you guys

have seen, started to outperform.

I like this breakout.

We've talked about it in WMD. My comment was that this horizontal structure

right here is so different than what we've seen before.

that this suggests some kind of outperformance and then it happens right

out of the gate.

And also acts as a confirmation that this bull rally

is valid and it's not a fake.

Let's quickly look at oil. So oil update was that we

are...

Still long -term bullish since our call somewhere here.

And short -term, we want to see the price hold on to

these levels around 58 and then start committing above 59.

If this happens, then we're quickly going to go to 62 and meet some supply

which is going to be a major test.

So that would be in line with kind of like this rally in the markets as well.

This laborious rally, but still with some bullish bias.

Bitcoin bringing this up because now we kind of see the resolution of the call,

you know, after this big rally up.

So our call was that some supply came in right here in the context of the

downtrend. So at the resistance line. So this is most likely not a sign of

strength.

And somewhere here, it's just been starting to being confirmed. Usually in

type of the scenarios, the first movement is going to be grinding down

lot of volume signature and then acceleration into the support with the

It happened exactly that way.

All right.

Oil, I'm sorry, gold.

is a little bit tricky.

And some news are coming out, I think.

Yeah,

look at this.

Yeah, so pre -holiday maybe activity.

I don't think that gold has a definitive edge yet at this point of time.

I think if the market is going to move up,

there is probably going to be more of

like smaller moves, the gold that we might observe.

after this initial huge momentum buy.

So there might be more of the consolidating action, at least

So I'm not really trying to

do any trading in gold at this point of time. I'm trying to find the spot

where it's going to be much more clear what's going to happen.

So I'm willing to...

maybe even miss some of the moves even though i still have the long -term

position in gold in general but i'm not actively trading gold at this point

and what else okay

i think that's it all right so this is for the that's it for the market update

let's go to some questions from

chris when i read a chart when you read the chart how much weight do you give to

reading likely market participant moves or just uh read what has

happened then who could who could have provided this footprint or just roar

price and volume all right have you ever looked

into synchronization indicator

As it moves in and out of phase with price.

Okay, so kind of like two questions here. Let's answer the second question

first. Synchronization. So synchronization between effort and the

And we've talked about this. We did a couple of bias games where we tried to

find that synchronization.

Between effort and the result, I thought that was very successful, and you guys

really liked it.

So then we took this one step further, and in the November special,

I've shown you guys how to measure

the ease of movement. So

we would define the velocity of price movement.

as a, on a measure, on a unit of effort.

So for those of you who are interested in this, you could, you know,

you could purchase the November special, you know, the

secret sauce is there.

We're going to develop this a little bit more and we're going to add the result

to that. So hopefully.

we're gonna develop this new indicator for us that we're gonna use.

And then the second question, what do we look at, market participants?

So what we call a Wyckoff story is a combination

of observations and deductions.

So under the observations, you're gonna...

see the increased volume signature and you're going to see specific events

the big interest is going to participate and then our deductions

about those places are going to be about their motives if

we are saying if effort did this and result did that

then the ceo most likely did this

And then we are saying, could we find a confirmation of that?

So the simplest example of this would be, well, if we're seeing elements

of accumulation through the trading range, where we're seeing elements of

absorption, urgent demand, or non -urgent demand, and still

the price thuds.

building an uptrend, then that acts as a confirmation and our deduction about

the CO is that CO has accumulated a position and that the price will go up.

it's both.

We are converting our observation of technical patterns

into the deductions to what market participants are doing.

All right, good questions.

Let's look at the anatomy of the trade.

So one of the comments that I received, I think it was Sharon, I

think Sharon said that the stock was picked up correctly.

And I wanted to comment on that, by the way.

I wanted to comment on that a little bit.

Remember our first stock or the second stock?

So it was the renewable stock.

sun power right so remember the structure where we picked up that stock

around six dollars and i'm just gonna try to draw it like from my memory

all right something like this and then we have this trading range and

somewhere here on this bar we're picking this up okay and now look

at we're picking up uh trading view

So we're picking up after an uptrend. We see a stop in action.

So we're kind of in the trading range.

And then within this trading range, we have, we are identifying this area. So

this is a short -term oversold in the kind of like more or less, what is this,

February to about, yeah, so maybe like some kind of a potential reaccumulation

right here.

Is there a difference, positional, structural difference where these

two stocks have been picked up?

Even if both of them would fail, there is probably more probability for the

trading desk because it has stopped going up and was consolidating

and also

It had some short -term oversold condition going from 280 to 180.

That's a significant drop.

Whereas here, we are at the top and out of the speculative round right here.

So I just wanted to bring this to your attention.

The question here from Marvin is, is this a feather?

Right here.

Yes. And I was hoping that you guys are going to see this because during the

week, I was actually thinking about opening a position in a trading desk.

And it just kind of got away from me with some other positions that

I thought that they were better. But my expectation was that after this

absorption, vertical absorption of supply, we could see how...

supply is so low and whatever supply is coming in, it's being absorbed and the

price gradually is being moved up.

So that suggests that when demand is going to come, it's going to push the

quickly. And I was thinking about the position on Monday where I would be

opening weekly options that would be closing on Friday, either of this week

next week.

Why? Because if the momentum is going to be fast, then Monday, Tuesday,

Wednesday, probably going to have that momentum move, and that's exactly how it

happened. So those weekly options would be a really good trade up to a feather

after this type of a scenario.

And I think that's where, you know, mistake last time as a class mistake was

made, because we were in this pattern already, so we should have seen that

absorption was already happening.

and our anticipation of the reaction was incorrect.

It's anticipation of the feather that we should have had at some point, which

came a little bit late.

But still, I think that the original positions that we've

opened, all of them were on this big bar. So this is where we are, and I

this is where we are in terms of the price.

today a couple of up bars that we have had um what does this suggest guys

i mean like looking at where we are right now so hold on a second yeah this

where we are uh what are we doing here i mean like without with the position our

point of entry was on this bar

what are we doing guys

Are we keeping it? Are we keeping and then scaling out some?

Are we exiting completely?

All right, tightening our stop.

Cell one half.

Keep and move stop loss up.

All right. Well, why don't we start again? What's the intention for our

mean, what do we anticipate here? Are we anticipating, let's say, less than a

month run into the resistance and then that's it?

Is that the trade for us?

Or are we waiting for something like... at the end of 2018 into, let's say,

at least March or May or even further up, like

in June and July, that type of rally.

What are we anticipating here?

Should overcome previous resistance and show sign of strength.

Yes, so if that's the case, if we are waiting for the price to overcome this

resistance and to show some kind of major sign of strength, then why would

closing the position here?

Or even selling half of it?

I mean, if our conviction is very strong that this is now a potential...

I mean, we're looking probably at this whole range right here.

By the way, look at phase B.

This is so great.

This is phase B showing a lot of strength.

I'd say that we probably are gonna

Hit the resistance first at 280 when I overcome I'm gonna have reaction

somewhere here And I think that we still need to hold on to this because if this

is gonna be an outperformer Then it might actually go up right away might

even wait for anything Having said this I

think it would be prudent to take something around this area like 280 300

because

We might have a reaction here.

And then 300, it's kind of like this place where it would attract a lot of

attention to the stock.

So a lot of the mean reversion traders are going to short the stock just based

on the momentum that's already here.

If we're going to have a small reaction like this, what do you think is going to

be the next move?

Turn insane up.

Okay. Yes, why

Why

would we expect a continuation and

you know the breakout right here

We are in an uptrend because supply has been observed. Strength of the previous

move. Yes, I would take this last one, strength of the previous move.

Look at this move. I mean, this is such a strong momentum. What do you think is

going to happen when some supply comes in?

Demand is still extremely active, extremely strong.

So the momentum is going to carry the stock above this.

which is kind of like the initial attempt to react.

So there is no reason to sell on the initial reaction here when it comes,

especially if we see that the character of the result is gonna be minimal.

If the character of the result is expanding, then it would be a concern.

For the short term swing traders,

For those of you whose horizon is, let's say, from two to three days

to, let's say, up to four weeks

type of swing traders, then this is a good way to

start scaling out, but probably scaling out on the premise that you

want to staircase this trade

most aggressive stop loss is going to be just below the low of the previous bar

and you would want to close below not necessarily the price penetration of

flow right so you want to see the actual close and then once the

price goes to 280 and 300 you want to go into the intraday and

time it there so you want to create that trend

and make sure that was the first signs of the reversal you're getting out. So

this last bar is reversed, let's say tomorrow, then you're out.

For the long -term position trader, this is just an icing on the cake.

We're kind of happy that, yes, great selection, great takeoff, but would

the price give us another opportunity to get in into the position?

at the lower prices um and you know it might not uh give us a big opportunity

you know so we just have to see all right uh what else here oh

another question from arvin looking at the volume i only can

visualize ceo's signature from 2005 to 2010.

While CO seems absent from 2015 to today.

If I look at the volume X times price, does it tell a different story of the CO

activity? And I think that we just went through this in the WTC. I don't know if

I actually talked about it here in the practicum.

So I would go even further, Arvind, and I would say that the actual accumulation

in Apple has started in 1996.

And then it was concluded somewhere here in

2013.

So we had a trading range from 1996

to 2003.

was the major sign of strength in 98, 99.

Then we had a lot of buying in 2001,

2003 trading range.

And then we had buying on the way up from 2003 to 2013.

It's crazy to think that Apple is that type of stock that has...

institutional accumulation that happens over a decade.

And it's not only in the trading ranges, but it's actually on the way up in the

uptrend. But that's the type of the stock that Apple is.

Their product line is just so vast and their revenue is so huge that

institutions

cannot get into this position enough in just one year.

As they have more and more resources, they're still accumulating this position

because they know that Apple is going to produce more products. They're going to

influence more markets.

And we have a lot of those type of companies, Microsoft, Amazon, Walmart,

Visa, MasterCard.

Those are systematic stocks.

If you take those companies away from our society, we're going to feel some

of hole is going to be created

because they provide a lot of value to us.

So you can't accumulate this position in one year.

As a money manager, your resources are going to come in the next 10, 20 years.

as new customers are going to come. So you're still going to invest in those

secular type of stocks.

So their major accumulation has happened during that period.

And then COO is inactive.

What does it do? It just holds the supply of this stock in its portfolio

and it does nothing.

Why? Well, because The stock is just going up and up and up, and you have to

have Apple, you have to have Microsoft, you have to have Walmart, you have

to have Amazon, you have to have Google, you have to have Facebook, and so on

and so forth, those type of stocks.

that are going to have some short -term volatility for sure, but those present

major, major secular, cyclical opportunities for many managers.

Again, something that we'll talk a lot during the December special on the long

-term campaign.

Thank you, Arvind. That was a good observation.

All right. And a question from Simon here.

I found the bias game exercise drills that you did in session 11 webinar

incredibly useful, especially when students volunteer to talk through the

action, coupled with the rhetorical questions that you posed during the

analysis. Would it be possible at all to do more of these exercises, please, and

potentially add where we can take a point of entry and or point of access?

Well, yes, absolutely.

So we'll do exactly that.

Okay, hold on a second.

So Dmitry is saying that I've missed out Arvind's main question. Okay, which is

this one right here.

Any roll -off for the volume and price?

If that... That's the question, but I mean, we kind of know, right? So without

increasing the supply, the price could go up.

So that's an ice cream story where a supply goes down and the price is moving

up. Was that the one, Mitri?

Yeah, well, the CEO is an absent and supply is not being presented by the

That's why the volume signature is so low.

But because that supply is not being presented, the price is still going up.

So basically that's the technicality of that.

All right. Well, yes, we definitely can do this. So let's do this.

Let's do the bias game again.

And maybe today we'll go until around five or so.

But I want to go through this a little bit quicker. So let's try to do as many

as we can.

I'm going to give you guys maybe a minute or so. I want you to be

about this. So let's do two minutes, okay?

And then just go through this exercise, through this chart, and make as many

observations as possible.

Go through the left to the right, you know, create the story.

And then, like, in two minutes, I'm going to ask you what you think about

bias and why.

Also think about why, right?

All right, guys, let's see what you think about this structure.

Is this an accumulation or a distribution?

Okay, so, Dmitry, are you saying that this is a distribution?

Just let me know. Okay.

Okay, I see. All right.

okay all right last call okay so

all of you are saying that this is a distribution let's see the answer and

was a city group in actually very very interesting time 2007

2008 and look at this you know huge huge move to

the downside that has happened after that.

It's a little bit hard, I think, to see the chart here because we see how the

volume signature expands so much.

But let's go to the previous chart and let's now talk, now that we know the

bias, let's talk about what we're seeing here, maybe something that we've

missed. All right, so...

We are seeing some kind of trigger range here prior to the last run.

We are seeing some climactic action behind it.

The price has a lot of spread increase gaps.

There finally comes some volume signature that we didn't think

was homogeneous with the previous volume signature. We even would

be suspecting that, you know, This is either ETF or this is

just a huge large cap stock.

Why is that? Well, from the volume signature, we see that the volume does

change too much from day to day.

So there is this homogeneous behavior in the volume.

It's the same.

And only extremes are occurring

at the specifics.

And usually that type of volume behavior is going to be associated with

either ETFs or ledge caps.

So we're seeing some abnormality in the volume signature, volume spikes on the

way up.

And that is suggestive of some supply on the climactic run. We're thinking,

okay, maybe this is the buying climax.

some small substructure here that is suggestive that the bind climax

has been made and

that we are ready to go

down for the potential automatic reaction.

Just a combination of how the big structure starts to unfold with an

of the big structure and then a smaller element that is acting as a cause

to the automatic reaction effect.

And the reason why I'm talking about smaller substructures here is because

this structure, by itself is too large, too big

for us to think about.

This chart is not very visible, but it's easier to think in terms

of the substructures here and then just kind of connect them together.

So we're seeing that all of those substructures are small causalities for

moves that follow.

So therefore,

We're just connecting those moves and we're now kind of like seeing more of

structure that we are supposed to see.

And what do we see? We're seeing a little bit of the downsloping structure

the lower high, with the lower low, another lower low here,

you know, relative to the previous low or relative to the previous support area

right here.

We're also seeing how All of the result to the upside where we had so much

excitement, that was negated really quickly on the way down, and the effort

increased to the downside. So definitely some selling that comes after the last

speculation. The rally to the upside, again, does not have necessarily a

big increase in the volume signature, smaller result.

and has some kind of supply that's coming in into what becomes a

resistance there.

Again, to decipher this rally, it's this smaller structure here that

would give us the clues.

And then I think what comes next becomes extremely important because we

saw a deterioration of the up bars on the automatic.

reaction right away all of the profits were gone supply has increased and then

we saw the confirmation of that down down bias on the way up on the rally and

said that the result was mediocre and there were some elements of the supply

then it has failed and as it fails and the institution starts to capitulate

position uh already um you know uh as almost kind of like a late

capitulation, not the general capitulation yet, but late capitulation,

how that volume signature increases.

And that produces a lower low, which is a much bigger result relative to the

previous reaction.

So that confirms the bearish bias and kind of increases also the probability

the continuation because we see that now that synchronicity is you know is

playing out we're seeing how uh effort is increasing because volume is

increasing and we're seeing how result is increasing because the distance of

downswing is increasing and the spread is increasing itself um so then the

latest structure that we need to decipher is only in the relationship to

has happened prior

on the rallies.

And we've seen that the more horizontal attempt to rally is gonna fail just

because there is so much pressure now to the downside.

You also could see from the volume signature increasing the supply as we

more increase of the result to the downside as well.

You could also go and specifically try to identify

the points of the potential reversal, right? Or the points of the supply close

to the resistance.

We see how there is a really good rally first.

Second rally has a little bit more supply behind it. Then third rally on

bar, we definitely see some supply.

Price reacts down right away off the high.

Next bar, and we're still reacting to the downside.

And then the next bar.

as well would have that supply signature as well.

So there is some selling into this trend and our tactic here would be very

simple. We want to catch the breakout of this apex formation as a confirmation

of that trade to the downside.

We're thinking that this is LPSY and we would be expecting some kind of general

capitulation that usually should produce acceleration.

as everyone's going to capitulate.

All right, and that's kind of how it happens. Right away out

of the gate, out of the apex formation, we see increase in

the supply, and then here is that late capitulation by institutions, and then

see in general and general capitulation again in 2008.

where everyone capitulates.

All right.

Questions?

All right, guys.

Again, same assignment, couple of minutes. Think about this and

let me know what you think about this structure, accumulation or distribution.

All right, guys.

So what do you think?

Okay. All right. So answer's already here. Okay. Or just write it down if you

have not submitted your answer yet.

All right.

And that's it. All right. So let's look at what it was.

that was an accumulation and we kind of see how we went into this

apex formation so let's come back to the original view and i think it's very

useful when you are playing this exercise right by yourself so let's say

you're looking at the trading range and then you created your work of story you

created your definition of the bias then um

looking at what happens next.

And with that in mind now, now that you know what the bias is, come back and try

to analyze and try to see it from the perspective of that bias.

So what is it exactly that you see here that would lead you to the conclusion

that that was accumulation and not the distribution?

Maybe one thing, maybe two things. What is it that you're seeing, guys, here?

Why is this an accumulation?

Decreased supply across the structure.

Big supply bars, but no result to the downside.

So we're looking at this decreasing volume signature right here.

And then at the same time, what do we see with the price?

We are looking at the apex formation.

We might be thinking that, could this be a TP formation?

Well, if this is a TP formation, let's say we're having a buying climax

somewhere here, and this is our phase A, then we usually would not see the highs

overcoming that buying climax high.

And here we definitely have that.

I think the confusion here, you know, for somebody who would be thinking that

distribution comes from lower highs, that is quite a few.

And then also, let's say that volume signature where demand goes down and the

price does not go up, that also could be confusing.

What else could we see? Result to the downside diminishes, yes.

Higher lows created no selling off the top.

Very good.

And then higher lows. Okay, great.

What else? What if we would just look at this trading range in terms of some

kind of segments, right? So maybe like segment one, segment two,

segment three, segment four. What could we see here

in those segments?

volatility goes down.

So we kind of like, even if we don't see the volume signature, right?

Even if we don't see the volume signature, we see how volatility is

every time there is a reaction.

We might probably say the same about The rallies as well, we could say, well,

the rallies are also diminishing in terms of the result. They're not as big.

But even on the latest rallies, we still see some bars that

have momentum behind them.

On the way down here, we have probably one bar that deserves our attention.

The other two are...

for somewhat mediocre.

But just generally, we kind of see how we're starting with a lot of volatility

here, and then it's less, and it's less, and it's less, and it's on

the background where volume came in, volume came in, and then nothing

So it's almost like they exchanged the shares, and then they are doing nothing

that brings us to the...

non -volatile environment and we would be expecting just a continuation from

here.

Really interesting backing up action.

Why is this backing up action interesting?

Well, because out of the apex, we're not gonna expect a major sign of strength,

right? We might be saying that maybe this was a major sign of strength, but

would have this kind of like a smaller breakout, and then a smaller backing up

action. A smaller backing up action after the apex is a very common

and horizontal nature only suggests that there's going to be some momentum out

of the gate, and we see that, and we see that also for the intermediate

timeframe as well.

All right.

Questions?

Ah,

points of entry.

Yeah, so let's talk about that. Where would we be entering?

So this bar right here suggests that we have to wait for the retest.

So somewhere here after we probably either this bar

or this bar is right here, this.

Because this is an apex, this bar as well, and then this bar right here, and

this one.

So let me just do this again.

This, this, this, this, this, and this.

All of those are going to be good points of entry for different reasons.

And again, you know, we didn't come in into the position on this bar because it

was a little bit too volatile. We needed some kind of testing that came later on

as a high or low.

All right.

Again.

Let's do this again.

I'm going to give you a minute or so.

Think about this.

And maybe we'll do this in a different way.

Okay, so think about this.

All right, guys, what do you think? Is this an accumulation or a distribution?

Let's look at your answers.

All right, and we are mixed here.

Okay, so kind of like what maybe I was expecting.

So, excuse me.

We're going to do this together.

So we're going to do this in a different way.

So let's have a volunteer.

And then we're going to go through the logic in a different way, right? So

going to talk this through.

So say yes, and I'll unmute you.

Hi, Dimitri.

Hey, Ramon. What's up?

I'm doing well. How about yourself?

Doing good. Doing good. Thank you.

Well, listen, you know, do whatever is needed with the website.

You know, you want to check this out, you know, and just like go do it.

You know, ask Nancy, you know, what needs to be done. And I'll be really

you know, to take on any help that we can. Hopefully we'll launch it in like

a week or so, 10 days before the Christmas.

I'll follow up with her. Yeah. And thank you guys for all of your support.

You know, everybody's anticipating.

We're working really hard. We're taking a little bit of a break this week just

because it's just been really, really hectic with, you

know, with the website and other things.

But we really appreciate all of your thoughts about this and help. So thank

All right, Mitri. So let's start from, first of all, what do you think this is?

Well, I was mixed, but... Okay, so if you're mixed... Hold on, hold on, hold

No, no, no.

This is really good. If you're mixed, right? So let's just think about what we

should do then.

If we are not sure about what this bias is, then we are like 50 -50, right?

So we just need to find either a confirmation or a failure of one bias

another. So let's start from Leif.

to right and let's see where it's going to bring us at the end of the chart so

at the beginning of the uh of the chart on the left so the first maybe what like

five columns an uptrend uptrend okay right

to the left there right by the arrow

somewhere here yeah somewhere there And we kind of probably could say that we

have some structure here because we're seeing that the climactic volume

came on this bar.

So it's almost like we have a previous high as a preliminary supply, and then

have a climactic stop in action, and then it materializes into the

distributional range.

As you could see, guys, there are so many spots like this.

I mean, if I would be thinking about how the price moves generally and where

climactic action actually occurs, the actual definition of the buying climax

is somewhat incorrect in the way how it could unfold.

In a lot of cases, we have a buying climax that produces first initial

stopping action, and then there is a trading range, kind of like a

distributional range.

And it repeats over and over again. Look at this.

Same here.

So climactic volume came right here on this bar, somewhere here.

It doesn't really come later on, right?

So distribution.

So Eric is saying it's like a residual momentum upside of the supply has been

presented. Yeah, so we've talked about this concept,

right?

two forces, supply increase and demand increase.

Demand increases on weak hands, supply increases on strong hands.

And here is this collision which becomes the buy -in climax.

Now demand might be stronger, so after such collision we still could have that

residual momentum.

And it's usually gonna have that upsloping structure, so this is what

seeing here.

In the small distributional patterns especially, those could be indicative of

some kind of reaccumulation pattern where we first initially seen the

and then we see the rally.

Reaction and then we see some kind of attempt to rally.

So just an element of the, a piece of the accumulation that could

happen prior.

prior to the reaction.

Okay, well, Dmitry, what about the character with which the price moves up?

What can we say?

Looks like a pretty healthy upswing move.

Okay.

What else? Let's just observe as much as we can, and let's just stay here as

much as we can.

Do we see different segments, maybe, to this whole rally?

Yeah, so starting about mid -June, we start seeing pullbacks start to occur.

So maybe like this area right here, right?

Right. Okay, so different texture from, let's say, segment one.

Then we see that segment three, which is basically two segments,

buying climax and then that distributional range.

And we've talked about this.

I've shown you guys this characterization of the uptrend. We have

bind first.

And this is where the volume could increase, where the spread is going to

increase. Momentum, velocity both increases.

And then after that, there is some profit taken.

And this segment we're calling the vertical absorption.

profit taking happens, supply increases locally.

And through the buying, the vertical absorption happens in this area.

So we're seeing how supply is being observed on the momentum first.

Then in the vertical absorption, supply is going even lower.

So then by the time the speculation happens, supply is in strong hands.

And when that happens, That's why the buying climax and speculative way

this way.

All right. Well, what is the bias then, Dmitry, on this rally?

At this point, I would say it's to the upside.

Okay, great.

Then the next segment, we are seeing probably, you know, we are going to look

into maybe like this action right here.

And let's divide it into two segments too.

the reaction itself, and then the trading range.

So reaction, what is the bias on the reaction?

Well, it's locally to the downside, but then it meets some sort of

demand at the 32, 33 level.

Dmitry, I guess here I want to ask you maybe a question in a slightly different

way. Is this reaction a bullish -like reaction or a bearish reaction, meaning

that is this just a reaction in the uptrend, or is this a reaction that is

developing the downtrend characteristics?

Well, it definitely seems like a change of behavior.

Which is suggestive of a trading range.

Yeah. But we want to kind of gauge on the deduction

gear here as to, well, if this is a change of character and it goes into a

trading range, does it look still bullish or bearish? I mean, for

do we negate all of the gains that we have built on the last rally?

No. Do we have the effort that is such a great bearish

effort that produces a great bearish result?

No. No. So still at this point, we would be thinking this way. We would be

thinking a change of character, definitely, which is going to lead us to

trading range.

But the character of this reaction.

is still somewhat bullish.

Even though supply has occurred, supply has come in,

we're still thinking that this is gonna resolve itself in a bullish way.

All right, do we have some kind of causality for that? And is there a

confirmation of the price and volume action that this causality could resolve

itself in a bullish way?

So for the,

For the larger part of the duration of the trading range, I see that the price

has hopped up onto the upper side of it. Is this a strength in itself?

It feels like a strength, yeah.

Yeah, so it's strong, and that's on the background of supply going down.

So this looks like... elements of the reaccumulation so we're seeing strong

uptrend uh change of character that has um bullish characteristics where

maybe there is some selling but you know then demand is coming in and then

throughout the whole trading range structure supply diminishes and

we are at the much stronger place suggestive of the rally From here, if we

rally, we're probably going to rally above the buying climax high, which we

when we go into the up thrust.

On the rally, is this a good rally for us?

Does this rally confirm the up bias that

we've created so far?

Yes.

Okay, yes. We are committing.

Kind of like in multiple ways, right? So maybe some way here, here, maybe

attempts here. Not necessarily that much.

We have a slight increase in the volume signature.

Not necessarily too much came out of this rally,

but it acts, the character of this rally still suggests bullish behavior.

If we're seeing some supply that's coming in,

We want to see how that supply is going to behave, right, how the price is going

to behave, price reaction to that supply.

What is it? So what is the reaction of the price to the supply that might have

come?

It hits previous resistance, which is now support.

Yeah, and kind of stays in this trading range in this area.

Non -aggressive, in my opinion. I'm sorry?

At this point, I would still have an upside bias.

Yeah, absolutely.

So there is nothing damaging, and we're even thinking about maybe like a new

uptrend right here that is underway.

So this could be construed by us as even some kind of oversold condition,

temporary oversold condition.

We're thinking that this could be a point of entry for us.

Something like this also is going to attract us to that.

And then suddenly supply comes in right here.

So then how do we interpret this?

Well, it's another react.

We have a reaction here.

It is.

It seems to be the price moves down more than the previous reaction,

the previous two reactions, that one and the one to the

left of the beginning of the trading. Yeah, right there.

So at that point, I wouldn't call it a

bearish bias because it still hasn't overcome to the downside.

It's still just hitting that support level.

So, yeah, at number three, I'd still think it's to the upside, but

I would be cautious.

This is definitely, this is where the texture has changed, right? So we've

in one texture, which was kind of like this momentum up move.

went to another texture where we are seeing that that momentum is gone there

is nothing there and there is some resistance to the price uh movement to

upside and we are observing this on the increased volume signature now what's

interesting is that it does deteriorate the momentum but it doesn't

deteriorate the structure yet

to the upside until probably second reaction and third reaction.

This is where you start kind of like questioning is, you know, that supply

is coming in. We're seeing supply increase for sure.

And we're seeing that temporary, you know, on the local basis, we're starting

have lower lows, lower lows, lower highs.

So therefore there is some deterioration right here. We need to understand what

kind of result we have on this deterioration. So what is the result?

We are trying to commit to the downside on reaction number three and then we are

coming back.

So right here when we are coming back, when we are overcoming, let's say this

high right here on this bar, this acts as a confirmation that we went through

the period of vulnerability.

We were thinking about the bias to the upside.

And then there were some signs in the volume signature and how the price

to react that suggested that if this is going to resolve to the downside, now is

the time to do so.

And yet it did not resolve itself to the downside. It tried to do that, but it

didn't.

And then it confirmed that still the bias is going to be to the upside, at

at this point of time.

Okay, well, Dmitry, then I would be thinking that

we are still biased to the upside up to this point.

So then what happens with the last reaction?

The last reaction is the largest reaction in the chart.

and I do see some supply coming in towards the end of the

reaction, although I could also see that as potential demand.

But, yeah, so it's a large reaction, but it hasn't overcome

the previous support.

So it hasn't broken that support.

At this point, I would be thinking, is this part of a larger structure phase C

as a second point of fear?

Okay, so what would give you that kind of like confirmation

that with information that we see, not the information that will come, with

what we see, judge the market by its own action?

What would be the confirmation that indeed this is an accumulation?

The only thing at this point after that large reaction is the fact that it

hasn't broken that support level.

What about the character with which the price moves to the downside?

It does move pretty quickly down.

Okay. But I see the previous reactions are pretty

quick too, and this one kind of had to struggle at first, then broke down. Hold

on a second. Let's define the quickness then. If you're judging something

against something, so which reactions are quick reactions, you know, like in

this whole formation, so that we would... Yeah, so like right in

okay so probably this is the fastest right yeah which the price moves down

this as well okay so what do we see

here let's say in the first move to the downside this this is

actually this distributional kind of like a range substructure here so this

the first leg to the downside second

And then third. So in the first leg, what do we see? Do we see the same speed

with which the price moves down?

Yes. Well, a little bit, yeah. Pretty quick.

But probably, I mean, like, is it quicker than... Oh, no, sorry. I was

at that. The last part of number one. No, the overall of number one is pretty

slow compared to the previous reactions.

In yellow.

And then it happens on what kind of supply?

Minimal supply.

Yeah. So here we had an ease of movement.

Supply was low and, you know, here supply was increasing and here

supply was increasing.

Here supply is not increasing. Okay, well, what about number two? How about

velocity? Like if we would compare this portion.

of the reaction to this velocity right here, what can we say?

It's not as fast as the October velocity, but it's not

pretty either.

It's still, I see local supply increasing there.

Dramatically? Not dramatically, no. Not dramatically, so we're not increasing

that much.

from let's say what we've seen here and the selling is not as intense

it does go below the support of 37 38 what do we

make of that i mean we are creating a lower low relative to the previous low

but think about phase c

right this local low will

be breaking some of the lows in phase B and potentially also in phase A as well.

So it looks like there is an attempt to spring, an attempt to commit to the

downside below this flow right here.

And we failed to do so, but we committed below 78 and 38.

So if we're doing that, we need to see some kind of like, you know,

capitulation.

where institutions are capitulating below this demand level right here.

And here is our capitulation. So this comes on these two bars right here.

Let me just do this.

These two bars, that's our capitulation.

Does this look like an urgent selling by institutions where they're getting rid

of their position?

No. Probably not. We probably would be expecting capitulation looking more like

this.

That's how it would happen. There would be some urgency, and they would be

selling, and the price would be moving.

This is more like some demand is coming in.

Yeah.

That large supply signature right there where you drew the line, I think

that's the bar that opened below the previous bar but closed higher.

So it has the white body, but it's still red. It shows that the effort to the

downside is increasing, but the result to the downside is decreasing.

And then what happens after that with the supply?

And supply diminishes from there.

Yeah, so there are additional reactions here, and supply is diminishing.

We have a slight increase in the volume signature.

We might not be very comfortable here with, let's say, an entry

itself. We might be also questioning the bias.

But as we go through this whole story, we're seeing that the bias is to the

upside, and then here is the hesitation.

But when we look at the character with which the price moves to the downside,

don't see a lot of selling.

And we don't see a lot of selling in the spread either.

And we know that phase C could potentially be a low low low. It could

potentially be below the previous levels of the support in phase B.

And the fact that it was not able to overcome a potential phase A low

and became a higher low in this larger structure then suggests that it could

be and attempt to stop at this point, create some kind of range,

and then resume its attempt to retest the previous

high. So this could be our assumption at this point.

We could create different type of scenarios confirming those assumptions.

could say overcoming 35 .5, I'm a buyer. Overcoming 37, I'm a

buyer.

then any type of sign of strength bars into 40, I'm a buyer.

And then let's say if your bias is still not...

Excuse me, guys.

If your bias is still kind of like undetermined, you can say, okay, well,

going to have a very strong commitment to the downside...

then, you know, especially below this level, like 31, 32, then I'm probably...

Sorry,

guys.

So if we would be seeing more of the commitment to the downside, we might not

taking a trade at this point.

Because we might be a little bit too late to the downside.

So if you're in doubt, obviously you want to strategize here and just build

everything on tactics.

But I want you to develop the skill of identifying the bias before you actually

go into contemplating tactics.

Tactics should be even more of a kind of like confirmatory tool. Yeah, tactics

are confirming that this is the timing right now to... get in into the position

um but by the character we should be thinking that

this is an accumulation all right let's see what has happened and we're looking

at has and we were somewhere here

this was of course a little bit trickier you know i should have probably

included this area right here but i wanted you to look through this

What else did we say about the character?

Well, we didn't really say as to how it's gonna go up, but we said that we

probably gonna be bars here, we're probably gonna be bars here, we're

gonna be bars on any type of sign of strength bars, like this one right here,

maybe this was one as well.

So somewhere in this area, we would be buying on the way up.

Again, look at the structure of the move. We have three components.

The first kind of like momentum buying off the bottom. The second one that has

that profit taking that comes in and just pushes the price to react, react,

react, react.

So more of the vertical absorption, sometimes horizontal.

And then once supply has been observed, then we go into the speculative phase.

All right, Mitri, questions?

Any questions?

If you go to the last slide.

So I followed everything to a T up until that last large reaction. I'm having

trouble wrapping my head around. Like I understand how you broke it up into

three segments.

Right. But segment number two gives me anxiety.

And to be frank.

When I see that and I see, you know, that volume signature compared to the

previous reaction in phase B there, that quick reaction down,

that seems to have similar, yeah, that seems to have similar volume signature.

So can you deconstruct that a little bit again? Yeah, absolutely.

And it's a little bit tricky, yeah.

off the top of my head, where we might have the same type of signatures and it

would resolve itself in more downward movement.

So we still need to figure out, you know, how do we actually kind of like

resolve this.

But the key here is in the character.

So we even need to see, like we're seeing that result, there is commitment

one result, there is no commitment below second result.

So we are...

thinking about the second result here, but the comment about committing below

is actually valid.

So we need to understand what is the character of that commitment, what does

bring?

So there is not a lot of distributional character on the way up as kind of like

a value cell, and then as the momentum cell, and then on the way down as well.

and even whatever volume comes in right here, we don't see a lot of

selling. So if we're saying that there is no institutional selling, we

are thinking that the previous bias is still correct.

And then we have some situations, and

in W2C we're... we've talked about this, where let's say institutions might be

extremely active in phase A and B, and then in phase late

B and C, they're going to be inactive.

We could have situations where they're going to be extremely active in phase B,

and then they're going to have a local capitulation into phase C, and then they

move to the upside.

So these are the two scenarios that we're looking at in terms of how

institutions are participating.

And we're seeing that their participation predominantly was at the

the trading range.

And then going into the later portions, they are only starting to participate at

the value zone right here. This is where they saw the value before.

So I would say probably just carefully examining, you know, and comparing.

And even though it looks like, you know, it's almost the same, if we would take,

Mitri, let's say the average down spread, right? So we would average all

down spreads.

And we would compare to the average down spread right here.

I bet you that probably the average spread here is going to go down.

Average true range.

It's going to go slightly down than here.

Would you say?

Yeah, very possibly, yeah.

Do you recommend using average true range if you're in a situation like this

where you did your warehouse?

I'm doing it right now, right? So let's just look at the stock at this point of

time, 2006.

And we're going to look at the average range. I'm not looking at the indicator

because you could see this in price.

And by the way, look at how it kind of repeats this pattern again.

So if we're thinking that this is an accumulation, this whole range, right?

Look at the climactic action and then what do we see in phase B? It kind of

behaves in such way that suggests that Well, not necessarily that there is a

of strength, but look at phase C.

Phase C has this drop that you probably would say this is the same type

of drop that gives me that confusion because it commits below certain levels

the support, does not necessarily have like a big increased supply signature.

It's more kind of like local. So what happens here? They bought in here.

value investors, ITFs were coming in on this rally and then they were giving up

here, they were giving up here.

Then they started coming back into this rally and then they started giving up

here. So it's the process of where value investors are kind of, you know,

bullying, you know, those momentum investors, right? So they are basically,

you know,

buying at the extremes and that gives them the confidence to hold

on to the position where ITFs are getting in and then they're burned out

position not going anywhere and they have to give up that position. That

produced liquidity events again and this is where value comes in and buys again.

So it's almost like ITFs are better be behaving somewhere after phase c when

they bind phase a on the oversold and that creates phase b usually it resolves

in the late capitulation uh you know in phase b and into phase c and that's how

the structure is being created i mean like the fundamental question is like

Why do we have the trading range like this? Why do we have that high -low?

Why do we have that reaction here? Why do we have that quick recovery?

Why do we have this climactic run?

Why do we have the quick recovery right here? Why is the price kind of

consolidates right here?

All of this is just comprised into the actual behavior of market participants

when we're thinking about the strategies that they use. So value, value.

Trend followers giving up on trend following, giving up on trend following,

now they're going to come back here and momentum is going to increase.

And that's how the structure is being created.

But let's look at ATR.

And let's take 21 days.

and let's go to 2006 right so we were somewhere here 2006

and

we wanted to look at what rel is dmitry oh we wanted to look at the down move

right yeah yeah okay well here it is i already see it

Excellent, good question.

So here you kind of could think about momentum and the velocity as you look at

the ATR.

So we were looking into this area right here, and we were saying that the

momentum has diminished, velocity has, well, the velocity

could actually, no, velocity also diminished.

And that's because the spread started to diminish.

Well, visually, it's kind of hard because Mitri was saying, well, it looks

somewhat the same. So you could use visual tools like ATR, all of the other

indicators. I mean, we are just trying to develop more of the visual context

our interpretation.

So I'm kind of always thinking, like, if I would average all of the downspreads

here and here, they probably would be different. This probably would be

diminished.

So we're seeing in the ATR how the numbers for the average true range

are going down.

Whereas on this reaction, they were actually going up as they were going up

on this reaction as well.

So you could kind of try doing that.

Yeah, that seems very useful.

And look at the next environment here.

Again, this is something that is suggestive of not an urgent

way to get out of the structure. So it's more like supply has been observed

and in strong hands, but because ATR is not increasing, it doesn't suggest, you

know, a very aggressive buying and, you know, very aggressive upswing.

All right, great.

Let me see what other questions we have. Mitri, thank you so much.

Thank you.

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

It makes sense if you think of the automatic reaction as a CO

value zone, Eric is saying.

Yes.

You could definitely do this and you might be thinking, okay, well, where is

actual buying has happened?

So I'm seeing that this was a big bar, this was a big bar, and the bar after

that. Also, there is a bunch of bars here that are suggestive of

buying. So this is what we would do.

Okay, we would identify all of those and then we would say, okay, let's look at

where they are.

So probably all of this, this, this, this, this.

So somewhere here, here is our value zone.

So every time the price comes to that value zone, rebounds, rebounds,

rebounds.

And then it goes into the always sold condition.

And here on the previous attempt, we had a lot of buying that has happened.

In this area right here, there is really not a lot of buying because selling has

been depressed.

So there is just a little bit of buying that stops the price from moving further

down and it should recover from here.

And that recovery, and see like the recovery to 38.

39 i would expect to be uh somewhat quick maybe with like some of the tests

quick and then after that um that's an interesting

question usually i would be thinking that the price would actually go faster

here it's interesting that it doesn't go fast

Yeah, it's not as fast as I would think it would go.

All right, well, this is a question for another class and another topic.

I'm confusing the increase in volume probably over the last 10 days.

Okay, so this one right here.

or so as effort to go up with no result to the upside. Should we be looking at

that as increased supply with no result to the downside?

We're probably going to be looking at this area right here as kind

of like a full structure, right? So here is where the most dangerous supply

potentially has come. What happens after that? Diminishing supply

characteristic. If we have an increase,

effort to push the price down than what is happening in the last 10 days.

Well, we are dropping to the downside, but do we make a commitment to the

downside? No.

So we need to look at both. Obviously, we can't ignore the rallies

when we are discussing all of this. So you would be right, Eric, to say that

rallies here are not that impressive. So therefore, we would be saying, yeah.

We are thinking accumulation, but we need signs of the confirmation, which

be this, which would be this, and which would be this, something like that. And

then we are acting upon those.

But definitely we want to develop the bias prior to that, and that's why

sometimes these are tricky.

And we make them tricky because we want you to think about the bias and not

necessarily the last bar.

All right.

I think that's it. I think that's it for today, guys.

Let's just stop here.

And I think that we should go away a little bit from the buys next time.

Let's stop thinking about other things.

I will look into our materials as to what else I wanted to present to you

in terms of the knowledge.

And we'll see what kind of skill building exercises we can have around

concepts.

Also, for the last session, let's start accumulating any questions that you

might have for me, and we could go through a lot of questions in the last

session.

All right, well, with that, for those of you who are in the States, happy

Thanksgiving. I'm sorry, happy Thanksgiving.

Still on the Halloween.

And for those of you who are around the world, we'll see you next week on

Tuesday as usual.

Thank you guys so much.

And don't forget, no WMD tomorrow.

You should have received an email. This is our, you know, one of the breaks per

year that we take around the Thanksgiving. So please keep this in

Have a wonderful end of the week, and I'll see you next Tuesday. Bye -bye.