Original subtitles

Hello, everyone. Today is September 24th, and this is our third session of

Wyckoff Trading Practicum course. I like the direction that we're going.

I like all of the discussions that we have. I like a lot of elements that we

have now in the class, just so many different segments, and it allows us to

think about the market analysis from different points of view.

I see you, Rick.

Nice. Yeah, nice. Let's go. Let's go. Yeah. So let's continue with that pace.

I'm going to try to put in more of the theoretical material, something more

advanced, something new. We're going to discuss the trends.

We're going to talk about, you know, more in -depth volume and price

And there are quite a few topics that, you know, I still would like to discuss.

But this is a lot of.

you know, experimentation through the exercises that we have. So that's

really great. I'm really pleased with the class.

Quick announcements.

WMD promotion is going to start on the 25th, which is tomorrow.

October special with myself and John is going to start on October 10th. That one

definitely do not miss, especially at this level.

Today, we're going to quickly go through the bias game.

We're going to look at the markets because there was a big, big change

And then we're going to look at the anatomy of the trade through the market

prism as well.

We're going to cover some of the Q &As.

I would love to ask you to put, if you guys have a Q &A.

And a lot of you are putting those on slides, which is fine.

Just mention in your email that I have a question in the slides. So make sure

that, you know, you're going to catch that. On some of the slides, I actually

not see the question, even though you guys, you know, tell me that there is a

question. And I see more comments than questions.

So please make sure that you do comment and specify, you know, in big letters

that this is the question.

So that would be great.

And then we're going to come back to our significant bar analysis, something

that we started last week.

This is something that we need to go into more depth.

So we'll talk about the stop losses and next class, you know, we'll devote some

time on stop losses and risk control.

You know, what seems to be very rudimentary, but at the same time, it's

important. So I want to make sure that you guys have this.

All right, what I wanted to look at, obviously

everything that we discuss here is for educational purposes.

I'll stop the recording and read the disclaimer.

Okay, let's talk about the bias game. I thought this one was difficult.

And we are studying this pattern a lot, and by we, I mean all of our students in

our community, and I'm studying this pattern a lot. And this is the pattern

where, if you look at the whole thing, you kind of could see that there are

three major volume signatures, or maybe four, where we have

one segment, and it seems like this is one texture.

Then we have a second segment, and then we have a third segment, and then the

fourth segment.

So I want you to, at this level, at a more advanced level, I want you to think

in terms of textures.

What do you see? How does the story unfold?

How does the story of the texture of the price and the volume unfold?

So let's go through this.

So we are having an uptrend right here, even though not shown, but we assume

that the bias is to the upside. Why? Well, because there is this formation

here, and that formation seems where the first initial supply has occurred.

It didn't produce a huge movement to the downside.

So we are suspecting that this could be a reaccumulation at this point. So we're

looking at this point for the elements of reaccumulation in this trading range,

right? Because a change of character would suggest that we are going to go

the trading range. And because we were in the previous buys, because we don't

see a lot of selling, and it doesn't produce a lot of movement to the

relative to the previous run, and I wish we would have a little bit more of the

beginning of this upswing.

But that trading range.

Our first assumption is the reaccumulation.

Can we find the evidence of this reaccumulation? Absolutely.

So look at this segment right here.

Effort to the downside increases.

What about the result?

Decrease, right? So with that, we're going to say this is bullish.

And now we're going to compare this supply to whatever supply came earlier.

still feels like it's a little bit early.

into the trading range for us to make, you know, a timing,

to make up the timing when the price is going to get out of the trading range.

This looks like an up thrust, so we're probably in phase A here, phase B, and

then we are just basically looking at the reactions.

Okay, so less supply, still bullish.

Then we go to the support level, and look what it does.

Volatility increases, but...

Relative to the previous places where we had that volatility increase and volume

increase, it's actually not the biggest volume signature.

I mean, if anything, we probably are going to say that the volume in general

went down.

And then we have one bar and second bar that are reversal bars and a spring bar.

Again, you know, something that... I'll just come back in a second to this

point, but the test, the test of the springs, let's discuss that.

And then after that, we are going up. So we've completed the reaccumulation in

phase C, a lot of points of entry for us on the spring itself because it's a

spring number three.

And then we are going in this laborious manner where supply does not increase,

but the price goes up on lower supply.

And we usually would identify this type of movement as a feather movement.

So it's where both demand and supply are going down. And not necessarily in this

case where we see that demand is consistent. So that suggests that, you

there is some buying behind it. So still some vertical absorption of remaining

supply.

So that's great. Okay.

Then we go into the speculative run. So let's see the character of this

speculative run.

How would we make a judgment of that? Okay, well, we want to look at the

signature as well. It seems like demand is healthy, supporting the run, suggest

a continuation.

This bar right here on the spread analysis reminds me of this bar. So two

bars where supply comes in.

And by the way, you know, you would be thinking like the first time.

when that supply comes in it's a very natural place of where it should come in

because this is where supply at this level has occurred so we are testing

supply this is something slightly high this was an all -time high so here we're

just using the vsa uh volume and spread analysis where the reason attempt to go

down and there are multiple attempts one two three four so this is a reaction

and the last point right here acts as a phase C type of point, right? On the

intraday, you will see that phase C intraday, intraday phase C.

And it's gonna have some volatility because it was trying to push the price

down.

It doesn't, so that suggests strength and continuation for the time being, for

the short time being. And then, look at this two volume spike. So these are the

largest volume signatures.

So therefore, we are thinking that it contains that supply, increase of the

supply. So from here, we are basically saying, okay, we saw supply at this

right here.

We saw it here.

And then on the way up, we're starting to see some supply. So for instance,

here, here, here.

What does it produce?

So as you could see, As we go through this chart, the main thing is just to

creating this story, keep telling you this Wyckoff story, what we call Wyckoff

story, right? So what is the Wyckoff story? We are, you know, narrating this

Wyckoff story right now.

Okay, supply came in first in November, you know, in this area right here, did

not produce a significant move to the downside, produced a sprint situation

where the price went up.

Next time supply comes in, this time supply is really heavy.

What does it produce?

Okay, well, it produces the testing, and that test is a low or high, so we know

that we're probably gonna fail here into the reaction.

Where to?

Well, here is our level of where we should fall.

This actually would be a nice trade.

here a short -term trade just to catch that increased volatility, short -term

volatility. We see that now supply not only is the value

selling supply.

So value selling supply.

And usually when the value selling supply, so like a value investor sells,

usually sells into a strength.

So that's kind of like not a very good sign for us. It still could be an early

sign that we might have a reaccumulation

and we should have some kind of reaccumulation rotational pattern.

What does it mean? It means that

some institutions are seeing overvalued position in the stock at this point of

time and they are selling like a value investor.

And some of them are actually coming in and they still see the value way, way up

higher and they are buying.

And that's what produces that rotational reaccumulation.

Rotational reaccumulation, the volatility of that is always going to be

somewhere at the beginning of the reaccumulation. So this is not

what you've been taught before.

Because usually our conventional teaching goes about the volatility being

phase C, as kind of like this last point of volatility.

And that might come. But in a lot of cases, I mean, a true rotational

reaccumulation is going to happen in phase A and early

phase B.

And the reason why it happens, again, is because big investors, big companies,

big institutional accounts, they need liquidity.

They need even more liquidity than the value.

Now that I'm thinking about this, you know, of kind of like what would be a

priority because they need big positions.

So they're willing.

to open up the position, let's say somewhere in the middle of the price

because they see that the future value is still somewhere there, up there,

you know, somewhere way, way higher.

So for them, it doesn't really matter whether they get in into the position in

phase A at the first one -third of the trading range or in the last part of the

trading range.

It's dangerous about the last part of the trading range is that there's going

be a low liquidity.

And therefore, they will not be able to get in into the position or they will be

getting into the position and marking up the price. And that's not what they

want.

They do not want to mark up the price out of the reaccumulation on the way

They want to buy it in the reaccumulation, and sometimes the only

they can do this is during the liquidity event in phases A and early B.

We'll study this more.

Okay, well, let's continue. So here is our supply.

So now we want to make sure that that

supply is being absorbed.

There is no absorption and there is a lot of consistency of selling here on

way down.

So all of this sell, sell, sell.

And now we are waiting because now we have a new zone where we know that the

composite operator has sold.

We need to confirm that or we need to see the absorption of

that supply.

at this level. Okay, well let's see if we have it. It seems that the

subsequent movement to the downside here has limited progression to the

downside and also the volume signature is diminishing.

So this would mean that supply also diminished and would suggest that we

anticipate the rally.

When we're gonna anticipate this rally, what we wanna see is the character of

the rally.

Is the character bullish or bearish?

What would be bullish characteristics?

Well, we definitely want to see the expansion of the spread, which would be

confirmed with the increase of the demand, decrease of the supply on the

reactions, and more importantly, the intention of this whole rally,

actually here, intention.

is gonna be to overcome the previous buying climax high.

All right, let's see if we do this.

Well, first of all, intention has failed, so that raises the big concern

There is no continuation of the trend, and kind of here we already know.

out of the change of character, that that's it, we're in the new environment,

are in the trading range.

So from that perspective, we want the price to commit to the upside after some

elements of reaccumulation right here.

But at the same time, we understand that we might be in the trading range.

So now we just need to see, would we see this selling again that came, you know,

as a values selling at that point.

uh value supply so to say all right so uh we definitely could see

this is so confusing because there are

some down days and then the volume signature is actually up

all right well let me correct this guys next time i'm glad that i

caught this

All right, so we are seeing a lot of interesting volume signatures starting

this bar, and I believe this is this kind of like this Morningstar bar, or

hopefully I'm calling it correctly, the Morningstar or

something like this.

Okay, and look at all of these bars right here.

What do you guys see in those bars and in the volume signature?

It's pretty heavy.

And at this point, we don't have to have a lot of supply to move the price

around this level. Why? Well, because we know that if a true distribution has

happened, so like this is a value distribution, right?

Some value investor is distributing.

So they sold.

What do they do now during this failure?

They become inactive.

at least for some time, that's what brings this picture, this reaccumulation

right here.

They sold and then they stopped selling. And look when they are inactive,

what happens with the price?

It's almost like there is no other force in the market that would go in at this

low and significantly change the direction of the price without the CEO,

the big money.

So it drifts because CO is not interested. It's out. It just kind of

its position, maybe scaled out, and now it's waiting. And then the price starts

to go up. Why? Because there is no more selling.

There is no more buying either.

This is a very poor rally here that we see. Demand is very low on this run

here. And then volume signature becomes really high in the later portion.

this run so with that inability to commit to the upside about the buying

climax resistance this volume increase is going to be interpreted by us as

institutional presence if institutions are present at this point of

time at this point of the resistance and considering what has happened before

we're probably thinking that they're selling and therefore the bias at this

point

might be down for us.

But as we go through the Wyckoff story, I want you to see that switch between

the bias, right?

So we had the bias to the upside.

Let me just kind of point this out.

Okay, we had the bias to the upside.

After the change of character, we still...

staying with the bias to the upside.

There was not a big change of character, right?

Throughout the whole trading range, confirming the up bias.

Throughout the rally, confirming the up bias.

Here, we are still in the up bias, but with the question as to what's going to

be the character of the next change of character.

Okay, and here we're seeing that the change of character was larger.

Supply came, was heavier.

So we want to see on the next rally either confirmation of the up bias or a

bias. We see how supply comes in, and we are confirming that this is a down

bias. Now, with this down bias, we're not done.

Because what if it changes again?

I mean, like what if selling comes, supply is being observed, and then, you

know, demand comes in and just pushes the price up?

So we need to figure out the rest of the story going to the right of June and to

confirm or to see the failure of this down bias.

All right, well, let's do that.

What happens afterwards?

Well, we saw the supply coming in on all of these bars in this area.

Then what happens next?

A couple of attempts to rally, failure.

Failure. And then again, we see how now a more

limited supply moving the price easier

to the downside.

Diminishing supply characteristics produces more result to the downside.

What is it?

It's an ease of movement. It's when the price starts to move on lesser supply or

on lesser demand, depending on the buyers.

We do not require as much supply as before to move the

price even more than we moved before.

So if you can't catch that supply distinction, then think about demand.

Think about in reverse.

If demand is present and this is a reaccumulation, wouldn't we have some

more pronounced stopping action that would not lead to the new

low in the trading range?

Probably we would, right? Or at least we would have some kind of diminished

characteristics of the supply, which we had here, and we would be expecting

a rally from here.

Okay, well, very interesting. Let's look at that diminished supply

characteristics. So the rally has started here if we're going to use this

when supply was, you know, somewhat at this level

right here.

So as the price goes down, let's see, we are somewhere here at this level,

right?

So here is that last selling that we could analog.

less selling that we could analog, something like that.

What kind of rally do we have here?

Nothing very serious. Does not even, you know, just comes to the point of

selling there where they sold before.

And then again, it just being sold with less supply, but still.

So we can't produce a really good rally.

So that is another failure.

And that is slightly different from what we've seen before.

And then there is a continuation of that reaction,

and the price goes to the previous support level. But look again at the

signature.

So the volume is actually diminishing, suggesting that both supply is

diminishing and demand is diminishing.

So how the heck would we be figuring this out?

And I think this is where a lot of the mistakes are being made.

And I see this from your homework. By the way, thank you for sending quite a

of homeworks, both Monday and Tuesday classes are just like insane with

this cycle.

So I'm receiving probably around, you know, 60 to 70 % of

participants in the class that are sending the homework. So which is great.

could see where the class is, where you are individually. And I know that.

This is a common mistake.

And again, I think that the mistake comes from our generalization, and that

comes from technical analysis in general, and I think that also comes in

how we were taught.

Because we're basically being told this.

If the volume signature goes down, that's bullish.

All right, well, absolutely, I would agree with this.

But I would agree with this in the context of the structure that we're in,

the context of how the volume was distributed in that structure before.

Not necessarily, I don't want to just look at this.

This does not give me any clues as to the bias.

And that's why there are a lot of mistakes like this.

Volume is going down.

Supply is going down.

This means that it's bullish.

But what has happened prior to that?

What is the story that led to this?

Okay, well, we told this story before, so we know that supply has come in and

they sold off the top right here, which is also an institutional way, a value

institutional way of selling into the strength and distributing their position

like this.

But if we just look at this area right here, at least you should raise a

question, what is happening with the demand?

If this is an accumulation, how would demand act?

Would demand increase or decrease?

And also, how would the price act?

Would the price go up or would the price go down?

And we just don't see any demand on this rally or on

this rally either.

And we are still within the confines of the downtrend that started from the

latest high.

So we can't really see a change of character in the demand.

And therefore, we are still assuming that the previous bias that we said was

changed from up to down stays.

And therefore, this is a distribution.

Let's go through the questions now.

After the bind climax, that comes from Simon, where is the automatic rally and

secondary test?

I'm finding it difficult to locate.

Okay, so bind climax, and then we are going to be thinking of the

first reaction as a change of character reaction, and the law of that reaction

is going to be the automatic reaction.

Then we would be looking for...

a change in the swing, right? So why is significant bar reversal is so

important? Because it identifies the swings for us where we see reversals.

So I'm just kind of approximating here.

Here are the swing.

So something like this.

And again, I'm just trying to approximate here, just visualizing this

quick.

Okay, so these are the swings.

So therefore, it's important for us to define that first swing that is going to

be a change of character, and then place the automatic reaction blow at the end

of that swing and see where that swing is going to change, where it's going to

reverse. here or here and therefore our labeling is going to be such that

the first swing low is going to be an automatic reaction low excuse me

and then um the next high of the next rally is going to be a secondary test

that's how we would define usually uh not a

big deal

When we look at all of this, let's practice again, buy -in climax.

Where is our swing?

Here is our swing.

Automatic reaction, where is the next swing? So the last bar to commit was

one. Here is the high.

We have two commitments to the upside, so we know that this is the next swing.

So this would be a secondary test, and this is our phase A.

And we've done this here as well.

All right, next question from Dmitry.

As a high -level view of thinking here, and I love those, can we simply observe

the drastic amount of selling at the top of the trading range while observing

minimum buying at the bottom of the range?

This would start our distribution bias, then dive into the details.

Is this a good way to start the analysis of the trading range?

Yeah, absolutely. I love this, Dmitry. So let's go through this.

So Dmitry is just basically saying...

why not look at the top of the range and we usually, you know, that definition

of the institutional selling zone or institutional buy zone, right? So

we see how the volume signature is concentrated here on the bars that are

at the resistance or off that resistance, right? So somewhere here,

here, all of those.

Here we go.

So in every time, you know, we go into the zone at least twice, right? So here

is where the selling is the most pronounced.

So we know that the majority of institutions are here in this volume

As the price stops and moves down, stops and moves down, we know that the

increased effort by institutions to sell starts to produce the synchronicity

with the price, with the result.

So therefore, yeah, we would be thinking that this is a buy is down.

Another idea from Dimitri is, well, what about the demand?

What if demand picks up? And by the way, look at how demand picks up right here,

around this area. So let's identify these bars.

And I think that this is where for us by coefficients, there is a lot of danger.

Okay, let me just define this.

Yeah, I think these are the two, yeah.

Now I need to redo this whole volume signature, it's very confusing, so I'm

gonna tell my content team to change that.

Okay, so what is happening here? And by the way, Not only that, I mean, like if

we take this idea from Mitri, and we've talked about this in the previous cycles

and in WTC.

So think about the value zone where institutions are selling or buying.

And that value zone actually changes, right? So it shifts.

We saw, you know, some buying around these levels here, here, here,

here, and then a bunch of bars here.

This is... All was buying.

Look at where they are buying again. At least there is an attempt to buy.

And coming back to Dmitry's point, there is no demand signature.

There is only supply signature. So that would be another way of looking at this.

So thank you, Dmitry. But look at the value zone at the beginning of 2018, and

then look at where they're trying to buy.

And it doesn't produce a lot of buying.

Even if we would be comparing two analogs, let's say this rally, and we

would be thinking like, oh, maybe there is a selling climax here, like we

experienced here.

And look at these rallies.

They are so different than what we're seeing in this area. So the quality of

rallies, or rather the response of the price towards the

demand that is coming in.

is different.

It is not going up or rallying as much as

it did in the late 2017.

And that's the biggest difference.

And that suggests that there is some selling that goes in as the price goes

So it just confirms and also allows us to think about another point of entry

here around this area. And obviously this is an LPSY.

Another question, can you explain the concept of identification of phase C on

single bar intraday, please?

Okay, so we are probably talking about this bar right here, just because this

a spring and phase C.

Okay, the intraday for this bar is going to be such that we had a close of the

previous down bar, and then we had a gap up at the open.

And most likely, there is still a continuation of the momentum from the

day, which was down. So therefore, we are going down intraday, and then we are

going up and closing slightly above.

So this selling was produced by the prior day's momentum.

We saw this bar right here, and it was going.

and it had some increase in the volume signature.

And then demand comes in and pushes us up.

So that just basically defines the change

of balance between sellers and buyers.

And for the second time, after this bar right here, it defines the winning by

the buyers.

And we are doing this for the second time, and now instead of going into the

reaction here, we are actually creeping up.

And as we do that, we are not doing this on the high volume signature, meaning

that supply is really low at this point.

So they just basically consumed whatever supply was left here by weak hands.

And that absorption

does not allow the price further to go down and the price drifts up.

Usually out of this feather situation where we have vertical absorption, we're

going to have a momentum. This is a very good options play that I usually would

do.

Okay.

Okay, last point and we're going to move on.

Just to follow up on the last point you made, who is the big buyer?

They are to create such a high demand signature at the failed rally attempt in

September labeled major sign of weakness. That's a good question, Mitri.

so we're talking about this volume signature and this spot, right? So let's

think really quickly, who are buyers here?

Well, first of all, let's define them as institutional and non -institutional

type.

Right away, instantly, we're thinking institutions.

Why? Well, because retail is not going to produce such a high volume signature.

I mean, look at the number of shares here. I mean, like, is retail trading in

and 100 million, you know, trenches?

No.

So this is a collection of institutions that are being caught on the wrong side

of the trade. So these institutional hands are actually weak hands.

Could the institutions be on the wrong side of the trade?

Again, something that I want you to change in your thinking, because usually

we're saying that institutions are smart money.

No, not the truth.

There are a lot of institutions that are making a lot of mistakes, and I work

with those because...

They're the same type of people as us.

The only difference between them and us is that their nine -to -five job is

actually to look at the markets, analyze them to make the best decision with the

knowledge and skill that they have.

And they make mistakes.

Warren Buffett makes mistakes.

I mean, you could look at his whole history of investing and, you know, you

find so many mistakes.

The latest one that I remember just off the top of my head is his trade in IBM

where he basically was wrong and his movement out of the

stock produced a huge gap. That was a mistake. Was he an institutional

buyer?

Yes. Was he strong hands? No.

Not on that trade. He was not a composite operator on that trade. We do

consider not smart money to be a composite operator.

And actually, I'm kind of bringing a new definition of the composite operator,

what this is.

Composite operator is the collection of smart institutional money

that are hurting.

on the same trade on the right side of the trade.

Everyone else is weak hands.

And then composite operator is going to be, you know, derived

or composed rather from multiple institutions.

with different investment styles. Some of them are going to be value investors.

Some of them are going to be growth investors.

Some of them are going to be momentum investors. Some of them are going to be

just professionals that are doing mean reversion trades and momentum trades,

kind of like that high frequency trades.

And if they are on the correct side of the trade, they are part of the

operator.

So coming back to Dmitry's question, who is actually...

So bold to come in right here. And for what reason? Well, we've defined that

those are institutions.

Those are weak hands.

Now let's talk about their reasons of why. Why would they come in? I mean,

what's the logic there?

Because we look at the same spots, we look at the same positions, and we would

be thinking here, is this a sprain or a major sign of weakness?

And it looks like a sprain, right? Because there is that, again, in

diminishing volume characteristic into the potential phase C, and then suddenly

we're picking up the volatility right there, meaning that somebody's buying.

see that buying.

So why would they be buying here?

Well, they see some value, right? Because when we think about weak hands,

what is the weak hands value?

In the whole price cycle, we would be anticipating that weak hands are going

start... actively investing at about one half of the trend.

And they're going to be buyers on the way up and they're going to be enjoying

it. They're going to be having a lot of profits. Now think about 2017.

Think about 1999.

Think about 2007 as those kind of like years where

we have that last climactic run into a big, big cycle and

Weak hands are just enjoying that because there is a lot of profit.

pick seems to be working.

Those are the times when you should be making lots and tons and tons of money.

My 2017 was a really good year.

1999 was a good year.

2007, I don't recall completely and exactly, was not extremely active with

trading at that time.

But those two were just great, phenomenal, because of that speculation.

And we kind of see that from this leg to the upside.

So what happens next?

Once they have the profits and we go into the distribution, the reason why

distribution happens is because weak hands are getting excited.

And with that excitement, they are creating liquidity for big hands to

Again, this word liquidity.

It is so important to understand how institutions are creating liquidity

the trend at which spots.

Again, they are not necessarily will be buying on the way down. That's not their

desire. They want to sell on the way up into this trend where there is a lot of

liquidity and a lot of value.

So here is a sell, here is a sell.

Now, weak hands, when they see this,

short -term value after such a big, prolonged leadership move,

they're going to come in and they're going to start buying.

So there is some buying here by weak hands, and there is some buying here by

weak hands again.

And those are institutional hands, and they're going to fail, and they're going

to start capitulating those positions somewhere here and then somewhere here.

So this is late capitulation.

All right, great questions.

And again, I think the So those are great questions. Why? Because I think

we understand the material better with this group. So these are much more

complex questions.

All right, guys.

Next chart for you. Next bias game.

So look at this chart and then analyze it. This is your homework.

I want to encourage you.

to analyze this chart before you look for the solution.

All right, so don't try to find the solution before you analyze it. And

send me your first version of this analysis, not the one that you look at

All right, this is the homework, so let's do it. It's very interesting.

Yeah, this is going to be a lot of fun. All right.

Okay, let's look at the markets. And I need a volunteer.

So just say, yes, I just want to go through the markets with you. I think

very important for us, you know, to kind of see what's going on.

And then we'll talk about the SunPower. Hi, Eric. How are you doing?

Are you there, Eric?

Hello, hello, hello. Speak up.

You there? I can hear the background noise.

All right, Eric.

All right, so some technical difficulties. Anyone else?

Anyone else really quickly want to go through the markets with me?

Just share your thoughts. Just tell me what you guys see.

No? No takers? All right.

All right, so let's look at all of the markets, and we have S

&P, NASDAQ, Russell, the Dow.

Hello? Yeah, there we go.

Yeah, sorry, I just had to find the switch over from the speakers to the

headset. no worries no worries okay so when we look at all of the markets they

kind of look the same right so we are trying to get above the resistance line

right here and we basically so how would you interpret this eric

uh well there's some synchronicity i guess everything's kind of

seems to be behaving in in unison And when you say synchronicity, you're

probably referring to the synchronicity between these four instruments, right,

that reflect the show on the market.

I was thinking more even synchronicity between what? Synchronicity between the

effort and the results.

So when we look at today's bar, do we have that?

Yes, we have increased effort.

over yesterday uh or sorry if you go back two days you see in a lot of cases

uh an analog bar and uh more more uh volume and more results so more effort

results yeah yeah so that would suggest automatically what what should happen

next we have a synchronicity of movement are we in the

reaction are we in the rally are we going to continue this reaction

We haven't seen any stopping action yet. So we're coming off the top and the

volume is increasing.

So to me, that suggests that we're not necessarily done yet.

Okay, great, great answer. Because see what Eric just said. He said, I don't

any stopping action.

That would be a prelude to a trading range and to the change of bias,

change of bias. And we don't see that yet.

There is a little bit of a demand tail on all of them, so we should recognize

that.

But we also recognize that the main force today in the markets was to the

downside, not to the upside.

And I like how Eric actually noticed the previous bar that showed that, right?

So like this bar right here, slight increase in the volume signature, but

of movement, and now it's even easier movement.

Again, this bar right here, and then an easier movement again.

So we are seeing how on all of the averages, supply came in, started

to move the price down.

I'm sorry. And today, we see that ease of movement even more expand.

So the price moves to the downside even easier.

So in the question here, as Eric has mentioned, is, well, when are we going

stop, right? Because we're still long -term trend to the upside.

Our intermediate trend is a big trading range. And our short -term trend now is

this reversal. And we kind of see this was the last commitment bar to the

upside.

And my assumption was that we're going to see the new high, all -time high

September now I'm kind of you know doubting that that we're gonna do that

least in September and you know the reversal happens once we

violate the law of the last institutional commitment to the upside

did today and we've done this on well we can't really

Look into this. This was the last of those. That's a question I had, Roman,

I'm looking at the SPY.

Yeah.

And, you know, we came out of that August trading range.

We, I guess, technically made a new high.

Well, kind of. I mean, like we made a new high relative to, let's say, like

low, right, and this high. But this is not a higher high, right?

You're just saying, like, we made a new high here. Okay.

Yeah, we ticked above it.

Did we?

Well, I guess it depends what instrument you're looking at.

Are you looking, like, at cash?

I'm just using the SPY.

The SPY, okay.

Okay, I'll stick to looking at your chart. So we didn't make the new high.

So, you know, to some extent, maybe you say, okay.

Are we going to see a little bit of it? Because we have been in a little bit of

a trading range for the last couple of weeks, right?

Or a week and a half anyway.

And saying, okay, are we going to see a bit of backing up action here? But today

was pretty severe.

And we came right back down to the top of the August trading range we were in.

I wonder what analog also we can use here in terms of the bars, right?

you've talked about today's bar.

When you think about the analogs, think about the same action, right? The

reaction to the downside. Well, we have it here.

Yeah, at the end of July.

At the end of July, right. So we also, as you said, a trading range. So this

right here, right? This is the bar where we had.

that ease of movement to the downside.

So I think I'm identifying it correctly, this bar right here. And then compare

those.

So what do we see? We see that there is slightly more supply that's coming in.

And that's what's so disturbing after the lower high.

Because usually that's a distributional pattern.

The rally is fading on low momentum.

And then, we have a lower high and then we have a supply coming in. So it's kind

of almost like a perfect conventional reversal after the momentum

is done on the lower demand signature.

And then look at how these two analogs are playing with each other. First of

all, we are starting lower.

Secondly, the close is much better today for the bears than it was back then.

and then the volume signature actually increased.

So if we are going to have a continuation of the current reaction the

did at the beginning of August, we actually could expect that it's going to

below this level.

And I think this is where a big capitulation could be happening.

I think that the bullish case scenario now with this reversal is most likely

we're just in the trading range.

and then we're just coming back, and then we're just doing this.

This is something that we've talked about in the WMD sessions, you know, in

sessions here as well, because we said that after the huge rally, we had that

change of character, then we had a move up, then we had that volatility of this

reaction right here, small trading range, we got up, and we were saying

we're probably in some kind of upsloping structure.

So it would not be surprising if we could get back to the support and then

consolidate again. So this would be a bullish pattern and then a continuation.

This would also make a lot of sense because going into the end of the year,

there are a lot of events.

Brexit, China, Iran is extremely important right now. I think that we are

paying less attention to a situation with Iran than we pay attention with

obviously.

China influences, the relationship with China influences the market the most.

But imagine if Iran is kind of playing these geopolitical games like North

did a couple of years ago.

So they are irritating the other countries with their actions

and that could produce a reaction, let's say, from the U .S. That reaction

could be a military reaction.

And therefore, we kind of see how they are sending more troops into that region

just because of that reason.

That could derail us. And I also think that a very, very strong stance by the U

.S. government on China tariffs could derail us as well and could have a very,

very quick shakeout type of action.

To your point there, too, I think the theme is going to be a lot of

maybe choppiness as these things come in and out of the news.

And I think it wasn't Trump's position that there's not going to be any partial

deals along the way. It's kind of like we're going to do it or we're not.

So that can make us susceptible to the ups and downs. By this kind of

stand, it's either a deal or no deal at all. And I think the

market does not like it. The market likes more like,

Well, we have, in a month, we have a meeting, and the market is kind of

waiting, but there is more bullishness when it waits for those type of

announcements.

And if the HR is going to say, like, yeah, we can't just basically, for the

whole year plus, we can't really come up with a good solution on tariffs, then

what's going to happen with the market? Everybody's just going to sell, sell,

sell, and the capitulation will be really fast.

What about other markets? Those are very interesting. So we've talked about in

the last class about the Bitcoin.

And I said that this is very reminiscent of what has happened in 2018 -19.

We had the same pattern. And out of that pattern, there was a very quick

momentum move to the downside.

Happened today.

So that's great.

Then we've talked about oil, and we're following the oil in the WTC class. So

this is the anatomy of the trade for that particular class, oil.

We were discussing positions that were opened here, here.

We scaled out here, and we were seeing it, and it's hard to see here, but more

of the trading range as well. So it kind of supports also the market trading

range views, oil is.

Okay, and then what do you think about gold, Eric?

Well, gold went up again today with silver, so the metals,

there seems to be demand there. It's increasing.

Yeah, still increasing and supporting the view that we're in the reaction for

the market.

Where did we have some selling?

Here is your supply, so here is the profit taken.

Then there is some supply here and some supply here.

And then this is the largest supply that came.

And then there is a diminution supply characteristic.

So they sold here and then there is no more selling.

So whoever sold here, and I was actually one of them, not selling

my long campaign position.

but hedging against it and trying to catch this momentum on the change of

character, which I did. And then looking at how supply has diminished,

closing the hedge somewhere here,

holding the long -term campaign, because there is really

not a lot of changes here, like long -term changes. We don't see anything of

this sort.

and then just add into the position just slightly here.

And that's kind of like the campaign move.

Okay, and the last one is the VIX, VXX.

So here, you know, we just kind of like confirming that volatility increases,

especially today, and we could expect, I mean, like if there is a rally, you

know, in VIX, we probably would be expecting it to 30, and depending on

reaction itself.

All right. Is that

right, Roman? It's a question in terms of the VIX value, in terms of what value

kind of indicates complacency versus bullishness versus bearishness?

Well, the way how I'm looking at this at VIX or VXX, I'm usually looking

for the short -term volatility events.

Usually those trades come on this type of reaction.

So for instance, I had a trade somewhere here, you know, was supposed

to go to the downside, and I was coming in into the VIX right here,

VXX.

So it just reminds me of the same situation.

This is a hedge for institutions against short -term volatility in general.

And by that, you could gauge as to what is the short -term bias that they have.

And when you see that institutional volume has increased, because again,

people cannot trade that much. And that effort is being translated into

the result.

which is increasing, kind of the same here, right? So we could be earlier.

So you could start thinking opposite to the index and just say, okay, if the

VXX or VX has room to go, and it seems like institutions are piling in

into this trade, especially if tomorrow we're going to have a ball like this,

that would be the best for the...

bears, then this is a good visual for us as

to what could come next.

Could we expect more volatility?

And it seems like, yeah, there are some hedges that were put out in the last

three days or so.

Eric, what else?

What else? Sorry, is there a question?

Yeah, what other thoughts, comments do you have?

Anything else on the markets?

No, I just kind of wonder what tipped things over today.

Well, I was watching Trump's address at the UN, and obviously this is such a

small thing. Why would it derail the markets?

I think that... markets were waiting for something, right? So we kind of see

that in the momentum.

We don't see a lot of buying in this area as the price goes up.

So therefore, what are they waiting for? For some kind of resolution, for some

kind of clearance on the direction of where, let's say, the story with China

going to go.

And as I'm listening today to President Trump,

He goes through many of the subjects and topics that we discuss in the

classroom.

And I was particularly listening to his stand on China and on Iran.

China came first, and he said that, and you quoted it correctly, Eric.

It's either no deal at all, or it's going to be a fair deal to... to the US.

So this means that both countries will have to compromise and they still cannot

find that compromise.

So that was a really heavy type of statement.

Now, when I watch this type of news, I also watch the tape.

I want to correspond what he says with how the market reacts to what he says.

So during that statement on China, the market the Dow went down from 60 plus

70 to about plus 10, plus 20, plus 30. So there was some selling on that.

So market is still sensitive on the intraday basis to those type of news.

So that just tells me, okay, this is what the market is waiting for, like a

positive resolution.

And then Iran was also a very big statement because he basically kind of

conveyed

The U .S. is very strong.

If somebody does not play by the rules, then we're going to go in and correct

that. And that means that with a country like Iran, I'm afraid that it could be

also militarily.

And this is where the danger for the markets is, I think, you know, China and

Iran right now.

What do you think about that, Eric?

Yeah, it makes sense.

There hasn't been much action in the last week or so, and you saw the volume

going down, which is not exactly the profile you want to see when you're

to be breaking out to new highs.

And I guess today was kind of like a little bit of a tipping point, right?

Yeah.

Well, a lot of you guys are mentioning, what about the backing up action here to

this trading range?

Yeah, we might.

We might have that. I think that we should look at the whole structure, and

not showing the whole structure here.

I think after this big rally that we had, which was a sign of strength, and

this first change of character, then we had the upthrust, then this big

volatility event, and we are somewhere here.

So if we look at this picture as...

This is the backing up action. I think we would be wrong in our labeling. I

think that we should look at this whole formation right here and label it as

bind climax, automatic rally, secondary test, our phase A, and now we are

in phase B.

How does phase B behave?

Well, usually very volatile on both sides, up and down, up and down.

So I would not be surprised to see...

if in phase b it would go to the support level um and you know um another

analog here which i'm a little bit scared to even bring up you know to your

attention but you guys can handle it okay so i'm looking at also

2007.

Let me do SPX, right? So SPX, okay.

And in 2007,

this is the area that is kind of

concerning because we had a local volatility with the upthrust action.

And now this move to the downside could be kind of slow.

So let's look at 2007, what happened there.

We see how the initial volatility has come in and produced the

price movement.

That was quite significant.

And then look at the next rally.

So the volume goes down, demand goes down. So this is the weekend's rally.

And it resulted into the upthrust. So the most recent rally did not result

the upthrust.

But look what happens next.

We have that type of bar like today's bar that comes exactly

into this, what we might think, a backing up position, right?

And then there is some movement to the upside. So that tail that we saw today

might actually kind of indicate that we might have an attempt to rally.

But the failure on the low or high would suggest a continuation.

And then, you know, look at the structure with the way how it moves to

downside. So it's laborious.

It's very confusing.

We would have with this laborious move, this type of bars where, you know, they

go up and we're thinking, well, maybe this is a spring.

Or maybe there is a spring somewhere here.

So I will be looking into this a lot.

just to see what potentially we could do. Because think about this.

What were people thinking at this spot, like on this box right here?

Indeed, this is a backing up action.

So for those of you who are thinking this is a backing up action, and this is

one of my scenarios, not necessarily a backing up action. I'm more thinking

a much bigger trading range that is going like this, and then we get out of

this. But if it fails and we have this failure right here, then we would have

rethink the whole thing and the bias as well.

All right, Eric. Well, thank you so much. That was great.

Thanks, Roman.

All right.

Okay, so muted.

All right, great.

Let's go through our anatomy of the trait. Oh, I should change here in CB.

Okay, so from Corey, we're looking at the sun power.

From Corey, he's saying that he opened position right

after when the spring happened at day number two. So somewhere here, let me

indicate this. So I'm thinking here.

But I closed the position.

At day number four, so one, two, three, four, right?

Corey, just let me know if I'm showing this correctly.

No worries, Simon.

Since I saw the bearish in -gallop bar at day number three, I see. This is what

produced that confusion. Okay.

With increased supply, I suggest next move maybe to another down movement to

the...

Okay. I think my mistake was there was not follow -up of the bearish engulf

which was a bullish sign.

I agree with that.

Yeah. So supply has occurred on this bar.

I would also be thinking, Corey, here, I mean, the first thought that comes to

my head, you know, this bar right here is we have to compare it to everything

else, what we've seen before.

on the supply side, right? So for instance, this area right here, these

bars, then these two bars, then these three bars.

Because it seems like this is the movement in the latest

identical kind of like texture.

We see that there is a lot of volatility.

It's a different texture here. This is a different texture, right? So we see how

Price moves down, but not aggressively.

Price tries to rally, but not aggressively.

And what do we see with the supply?

We see that there is three days of selling, two days of selling, two days

selling, and then one day of selling.

What does it produce as a result?

This type of move, this type of move, this type of move, and then this

type of move. What is the smallest move here as a reaction?

This one.

So this is the smallest result on smallest supply.

And therefore, I would concur with you that, you know, you have to make a

judgment. What was the character of that bearish engulfing bar?

Did it produce enough movement to the downside for us to say that, yes,

going to be a continuation?

Another way to approach this query was,

Well, if you went it on this bar, where is your stop loss?

Probably somewhere here.

This is where it would be.

So then just wait.

Wait, do not go in.

I'm sorry, do not close the position until your sprint has failed.

So it's just an early exit on anticipation of the change of

the change of the bias.

And think about the bias. Like, what is the bias for us here? I mean, obviously,

we're meeting a lot of supply. We'll talk about this in a second. This whole

phase A area is very volatile. But then what happens next? Look again into the

texture of this area. What can you say?

How does the price move?

Does it move very aggressively to the downside?

Or is it laborious where selling happens, but then there is not a lot of

to the downside?

It feels to me like that, you know, like that type of the result.

So therefore, we are thinking that the bias is that we should have some kind of

rally. So this sprain makes a lot of sense.

And this reaction was just a tilt.

So with the tilt, wait, and then come in into that position.

All right, let's go to the next observation. This comes from Ronnie. And

great work.

Really, I mean.

The stuff that you sent me as a homework on this particular stock, and I've been

thinking about this.

This is probably the type of the stock that we should have in all of the

classes. I mean, like different type of the stock. So we're trading oil on

Monday. We're trading SunPower on Tuesday.

And then we're trading Navadir on Thursday.

So that's kind of like the plan.

The next step would be just trading something on Twitter. But I'm still

in classrooms how we could do this you know effectively so i think that a stock

that is moving that is popular is the one that we should have in in classes

although oil and nova deer are actually quite decent so ronnie is giving us here

the pnf counts uh and i love the counting here um so let's

let's look at the counts okay so first count from the spring

to the next level of the supply where it's gonna come. So I would say that

probably the next significant level is somewhere here.

But there are different phases here. And Ronnie, I would just be thinking in

terms of those phases, right? So where is supply is coming in?

Here, here, and here.

All of those three spots are identifying the tops and then identifying

the reaction

that has supply signature behind it so therefore our segments smaller segments

are going to be one two three and then four

well you've took the one that is from the spring all the way to

the next level of the supply and then we're going to have this so uh we are at

this level right so 16 bucks very natural for us to stop

have some profit taken at this point.

And it looks like a very logical place to have that sign of strength

and backing up action.

I see that we have high objectives.

So my objectives were somewhere above 20, like around 24.

So it falls right into your targets, which is great.

Ask a little bit of the confirmation for me.

I have not counted all of the PNF of the whole range, and I hope that you've

done this correctly because this is a low -priced stock here, so therefore

counting methods could be slightly different.

Probably the easiest would be to establish a user -defined box size.

All right, so if we hit a target here,

Now we would be thinking about the labeling, right? So we have a sprint, we

a sign of strength, and we have a backing up action.

I want you to think about this as a question.

For the trading range that has lasted, so let's say that this is the whole

trading range, that has lasted more than two years, how quick the backing up

action should be?

What do you guys think? Should it be a month?

Should it be two months? Should it be three months? Should it be six months?

Should it be a year?

What do you guys think?

Could it be just one day?

Probably we are expecting a more prolonged... backing up action why well

it took some time for them to accumulate the position and then

the price went up really quickly from slightly above 4 to 16.

so that's times four indeed they're gonna take some profit they're taking

profits here they're taking profits here they're taking profits here on the way

up

So as this supply occurs,

it might take some time for the backing up action to develop.

Plus, looking at the P &F here, we need to build the count, and therefore we

need to see this, to build the count for the next target

of the 26 up.

So that's what we're expecting. We're expecting a trading range for the

up action.

All right, well, now let's go into this trading range and kind of see maybe a

little bit more of the price volume action. And before we do this, I want to

launch the poll, guys.

So let's do that.

And just tell me if you want to keep it and add some at this point on this last

bar, keep it and sell some, and then just close the position completely.

So let's see how we're going to vote.

On that, while you guys are doing this, I'm going to cash your vote.

Okay.

Let's close the poll and where is the poll?

All right, so the results that we have here is

kind of slightly different as I was.

copying this. So actually 38 % of you have said that we want to

close out this position. So there is a little bit more

of kind of hesitation

here. I wonder why. What's the logic, guys, for those of you who said that

going to close this position, what's the logic of closing out this position? I

would just...

Kind of like, what are we doing here?

And please don't forget that we actually have entered position on this bar right

here. So this is our point of entry at this point of time.

We voted for the stock.

You guys said, okay, let's do SunPower.

And then we said on this bar, what are we doing?

There was an option

to do nothing.

But as a group, we said, okay, we're going to open this position.

So now let's manage it, right? So where was our stop loss?

Well, our stop loss was below this low, right? So we're still in this position,

and now we're just basically as a group saying we want to keep it, even though

some of the people were saying sell it.

Okay, so let's talk about the potential risks here.

So we are coming in for the backing up action trade.

And I think that the timing of this might have been not the greatest.

Why? Well, because if we've just experienced a major sign of strength,

move concluded with the buying climax, then we are having a change of

automatic reaction,

secondary test, and we are in phase A.

I'm sorry, in phase B, that, right? So test, test.

And I'm having a little bit of the down slope in trading range here. So we have

to be extremely careful with the stop loss. I would say that the stop loss

should be or should have been probably two significant levels somewhere here.

Also, we could look at...

where is a lot of binds happening?

So like on this bar right here, so anything below it. So maybe like

below 11.

This is a long -term position. I would not really care about where it's gonna

if it's still gonna reaccumulate and go up.

So also another alternative is to have the stop loss here or below here. There

is no reason to keep the stop loss in this area.

It's all about like nine.

between $9 and probably $11. This is where you want your thought loss to be

long -term investor.

For those of you who are closing position, well, you are closing position

the loss.

And this could be a right decision. We still don't know, right? Because what if

the price just basically tanks through this whole level and we could just have

loss here and then a massive backing up action develops.

So we just have to trade through.

and see what's going to happen and make all of those decisions.

For now, as a group, we are keeping this position. We are not adding to the

position, nor do we close this position.

All right, let's see next week what this talk is going to do and what kind of

discussions we're going to have.

This is still a homework. There are two homeworks for you guys, each class, a

bias game and then the sun power.

the anatomy of the trade.

All right, great.

Where are we? 4 .25.

Awesome. But we still have plenty of time.

Excellent.

All right, let's go through some questions.

I like how the class changes pace now with a lot of segments, so that's

It keeps your attention going.

This question comes from Dimitri.

And this is the question in regards of the dark pool transactions.

So, Mitri, we actually had a special with Stephanie Kammerman.

She's trading the dark pool prints.

That particular material we are not selling because of the copyright issues.

But you can inquire privately with me and I'll see what I can do if there is

still interest for that.

And it's a very interesting question.

How can we use it? Well, first of all, is this effective tool?

And then how can we use it with Wyckoff analysis?

In this instance, would the Wyckoff analysis be affected by this?

Should we concern one way or another? Should we take them into account in

certain ways when analyzing volume?

So we just had Melissa, who was a part of the WMD class,

and she brought up this slide to us.

I've updated this slide on the chart. I'm just showing you what has happened.

But basically, Melissa is following the print of the dark pool.

I don't necessarily like the dark pool.

as a sentiment because basically uh you know dark pool activity is uh

the print of a large volume signature which basically tells us

it's an institutional signature so what i want to make sure for people like

melissa or stephanie or someone else who uses this methodology that you define

correctly what this institutional presence means

And I think that we know how to interpret this.

So in a way, what they are doing with their dark pool prints is they're

only looking at the occurrence of those.

But I wonder how interpretation happens. So let's just quickly go through this.

So 3 -11, so that's March 11th.

And we right away could see this probably where? Like in this signature,

the 11th?

I wouldn't even know. Okay, so let me just be more precise. I'm going to, on

other screen, have this dock.

And I'll tell you exactly where those places are.

All right, so March 11.

Interesting. Okay, so it's actually this bar right here.

Okay, so that's the first time.

The 13th, which happens next, this bar.

Okay, so I don't see a lot of like necessarily big.

indications one way or another. I could interpret this as a big volume

signature, meaning that institutions

are there, present, but then the biggest thing is on the result.

What does the price do after that, after the occurrence of that big volume

signature or big print? So we are finding it here.

We see just a general volume increase, so I'm really curious and kind of, you

know, even judging a little bit why the print did not come earlier. Maybe that

there were some other prints that we had before, because this is the area where

you would have a lot of institutional prints, right?

The volume signature has increased.

So as the price creates a high or low, we would be expecting on the increased

effort.

a reversal because the big effort to push the price down

does not produce that. We have a high -low, so a bullish scenario and we are

rallying. Of course, we would be making assessment of that rally and we don't

see that rally as a big, huge rally.

Okay, well then, what else? What else could catch our attention? Maybe like

huge prints like this, yeah?

over a million let's concentrate on those

okay so uh

416 let me find that

okay

so it's the second volume signature right here and it's this bar Right

here, kind of like the top.

Okay, yeah, that's very interesting. But again, my question is, why didn't we

have this print here? Maybe we have, right? Let me double check for four.

No, that's not the bar. That was April 12th. Well, maybe something is there on

April 12th because I see that big volume signature.

And that suggests, again, like we had here, that we're just playing with the

effort and the result.

If there is no continuation after this, then most likely we're going to have a

reaction because a lot of volume is coming in.

But the result to the upside is diminishing.

So we would be thinking about, you know, shorting just based on this and so on

and so forth.

could see where I'm going with this.

If you're gonna use the dark bull prints, you have to put this in the

the whole structure.

And you have to see what kind of result that print produces.

And that's the key.

Because at the time, you know, I think that we were discussing the bullish

scenario, and as you can see, nothing of the sort.

So, I would want to be extremely careful just to see, you

know, what kind of result we're going to have for each of the prints.

And obviously, you know, how else could you enlighten yourself on what's going

on here? Well, think about the prior context, so it's to the downside.

Think about all of the points where supply has come in, so this, this.

so there is selling into the highs where we had selling before and that's very

concerning so here is that selling and then interpret it

with the idea of the result of that

print and that probably would be my suggestion

all right

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

And here, oh, okay, we still have some time. Okay, so here we're going to

continue our discussion of the significant bar and significant

bar reversal.

We started last time. Ah, hold on a second, guys.

Oh, yeah, I see. So all of these questions, Q &As, are all about

bars. So that's great.

All right, a question, the first question comes from Simon.

Simon is asking, when you were discussing the last commitment to the

the last commitment to the downside, I assume these are significant bars

themselves. Additionally, when a reversal has occurred, this is based on

significant bar that takes out the previous significant bar.

Is this correct? Yes.

Absolutely. So we are looking for a loss commitment to the upside on the

significant bar with the close like this. And if we have other bars

that are going to have, let's say, some attempts to commit, but where the close

is actually within the body of the previous significant bar, then this is

commitment for us.

This is just an attempt to commit.

and therefore the reversal of the bias is gonna be a bar, a significant bar,

in the opposite direction, which closes below the commitment line.

So close is lower than the commitment line. That was based on the low of the

last significant bar to the upside.

What is happening here in terms of institutional presence and what do they

So on the way up, we see that professionals are still committing to

and then after the reversal, we see that a lot of them have changed their bias

and they sold. They either sold their position that they have or they opened a

short position and that's what produces that reversal.

So we want to see that

based on the two significant bars.

One is in one direction and the other one, the reversal one, is in another

direction. And obviously, we want to see the volume signature. The volume

signature could be high in both cases because if this is the reversal, think

about the value investors selling

into the strength. And then,

the momentum and ITF's trend followers are gonna sell

on the way down and that's gonna create that synchronicity.

Wanna jump to Eric's question here right away.

Eric is asking, does a reversal bond necessarily need to be a significant bar

is it a close above?

significant bar that is sufficient to be classified as a reversal bar. So we're

basically, we're discussing a situation where we have that loss commitment to

the upside, maybe some other bars, and then a big bar to the downside

significant bar that commits below, right? So we see that commitment below

line. So this is our significant bar reversal.

What Eric is describing here is something like this. What if we have

bar and then instead of a big down bar, maybe we have a bar like this

that is being followed by other bars like this and then

suddenly we see that on one of the bars, which is not a significant bar.

There is a commitment to close below.

Would that be considered a reversal?

Well, the idea here, Eric, is just to combine significant bars. And we're

to go through this exercise today and we'll do that.

So we want to, let's say, maybe combine these two into one single significant

bar.

And we'll talk about how we do this.

So now when we look at this, we probably would say that there is a significant

body and therefore a significant commitment to the downside.

So then we could say that indeed we have committed to the downside. So I would

be looking for those type of situations where maybe there is no commitment on a

single bar, but both bars have the characteristics of maybe semi

bars, right? So there is still a progression to the downside.

and every time there is some kind of at least commitment above the previous low

of the previous bar.

Then we can combine them.

All right, another question on testing.

With reference to the significant bar below, you outlined that a possible

of entry is a significant bar down.

Would we ideally wait?

the test and confirmation, the significant bar down is an action and we

then wait for the confirmation.

If we were to wait for the test and confirmation, which of the bars below

this be as, okay, and we need to look at that chart, but

we're gonna look at another chart and we're gonna.

bring up the same question. And then the last one, is it the above point of

entry method really based, is the above point of entry method really based on

your trading style of conservative versus aggressive?

I wouldn't be saying that, you know, I define the reversal as the conservative

or aggressive style. But now that you're asking me, I think this is more

conservative style.

not necessarily aggressive, because if you think about how the significant bars

act.

So here is a slide for us. This is going to be an exercise.

Hold on a second. We've done this exercise.

We did this with Eric, I think, before, or with someone else.

Okay, so then we're going to go to somewhere else, another exercise.

Think about the reversal of that significant bar, and this is a weekly,

confirmation that the reversal has happened.

But before that, there might be some bars that are

showing us the

causality of that reversal.

So therefore, if we would define, let's say, these two bars.

as the combo bars, and we are going to say that this is going to be a reversal,

and it's going to be a confirmation of that reversal of the swing to the

downside, let's say like this.

Why is that? Well, we had, what is the last commitment to the downside that we

see? Well, this is a very clearly defined commitment to the downside, so

would need to reverse this bar first, and this bar does it. But also, After

another intermediate high, we have this bar committing to the downside,

and we need to reverse that.

And we're seeing that these two bars are reversed. And so we have one

significant bar and then the second significant bar. Both are confirming

the reversal has happened. It's just that confirmation comes at different

levels and for different commitment lines.

So from that perspective, a confirmation would always be thought as a more

conservative approach rather than aggressive.

Where the aggression could come and where it should come is something that

discussed before.

It's on the way to the buying climax. This is where we want to be aggressive

with the significant bar technique. We just want to basically...

staircase the movement of the stop loss and exit as close to the top as

possible. Why is it possible to do it in this way? Well, because this wave is a

speculative wave.

And therefore, there's going to be a lot of momentum and a lot of velocity on

this movement, which is going to be basically an attempt

to push the price as much as possible in the shortest period of time.

So here we see times two or plus 100 % from $25 to 50.

And we just basically want to follow each week and just move the stop as a

staircase because we recognize this is the concluding to the whole uptrend

And then we will study those.

in the upcoming classes as to how those moves are going to develop from the

momentum move to the absorption move and then to speculative moves.

So aggression here is extremely important.

You could be aggressive here.

With this aggression, you would have to look at the trading range and go to the

daily and then look for the reversal on the daily.

And then this would be a more aggressive approach.

Now there is a trick here.

If we are so aggressive that we are looking for, let's say, into the

interpretation of the trading range for the bias, and we set the biases up, and

we are looking at the daily, then we are coming in on the significant bar

reversal somewhere in phase C.

Preferably. And then we are entering this position.

So then how could we confirm possibly on the weekly that

we are done and that we can use the weekly stop losses?

How could we produce that switch from daily to weekly?

And this is a great topic for us to talk about now that I remember that we've

done this exercise.

I'm going to pick up any of the stocks that you guys want. So give me one

of the stock and I'm just going to pull up the chart.

And then we'll go from there.

All right, I don't know what's going on with the top of stock charts.

Kind of funky today for me.

All right, I wanted to do a little bit differently, okay.

All right, so let me, I don't like how

it's done.

Okay, so this is what we're gonna do.

I don't need this.

Okay, we are gonna do this.

Then we're going to have a second one.

All right.

Oh,

my God. What is going on with me today? I'm sorry, guys.

When I have two charts.

of the same stock okay so let's do this and then

and

the second chart that we're going to have here is going to be our weekly

Well, it took me a while just to do this simple task.

All right, so let's look at the weekly first.

A popular stock right now,

momentum stock.

A lot of interesting comments about this. So we're looking at the original

trading range after the IPO.

So everything develops really nicely.

with how the IPO first is being sold by the underwriters, then is being sold by

the insiders, and then is being accumulated by institutions.

Not only they're accumulating the stock during the

consolidation, and we could see this from different volume

signatures, and all of it just shows a lot of buying.

And they also get into this position on the way up.

This is one of the things that I keep mentioning to you guys.

And again, you know, it's a little bit unconventional from the, you know, like

wife of perspective or rather how we were taught, like that accumulation

happen in the trading range.

No, not necessarily.

I see a lot of instances where accumulation actually happens on the way

And those are the stocks that usually extend their run significantly rather

than accumulation during the trading range.

And a lot of stocks have actually both.

They're being accumulated during the trading range by the value investors

mostly, and then they are being accumulated on the way up.

by the growth and by the momentum investors and that's exactly what we're

here all right so for us the key we're going to look into within the context of

the long -term picture here and the long -term structure i want to look on the

daily here and i want us to understand that maybe this supply right here meant

that we are in phase c and we are looking for the test so let's look into

area right here Find the point of entry on the significant bar.

And then let's do this switch to weekly.

And let's see where it's going to bring us, right? Okay, so let's do all of

that. A volunteer.

Say yes.

It can't be just me talking, so.

Say yes, yes, yes, yes, yes.

And then we'll go from there.

All right, let's go.

Sharon, I haven't heard you for a while. How are you doing?

I'm doing well. How are you doing?

Good.

Everything went well with the rest of the conference in San Francisco?

Yeah. Yeah? It was good. It was fine.

Great. I'm so happy that you've enjoyed it.

I was happy to see you, to talk to you.

Same here.

Absolutely. Okay.

All right. So let's look at this trading range. Now we know where it is.

So it was here in 2017.

I'm sorry.

Okay. And I'm just going to give you guys a little bit more context here.

So let's start with the selling climax and then we're gonna go into, let's say

maybe like this area right here.

So again, Sharon, we're looking at the stopping action, climactic action, and

then we go into the trading range.

And we said that we want to start our analysis somewhere here.

So how would you interpret this decline and what comes next?

Okay.

It's probably some people getting out early, and

I guess maybe just one or two groups who

think it's time to get out, and the others are like, no, it's time to stay.

Once there's a stop in action here.

I'm sorry, I'm laughing. That was such a great comment.

Yeah.

But in the essence of what is happening around this area,

that's exactly what happens.

I mean, like Sharon has described it in her own words, but think about this move

to the downside as a partial capitulation by some of the

So partial...

by institutional hands.

And usually when we see that type of capitulation in the trading range, we

be thinking what type of institutions are actually giving it up?

Why would they be giving up the position that we already know in

retrospect would be going up?

They just don't believe that this is either the beginning of the move or the

bias is up.

But what kind of institution would do that, right?

Well, the algorithm traders certainly, of course, they don't do it themselves.

It's just done automatically.

Yeah. Institutional algos, they will be driven by the momentum, so they will

accelerate this move to the downside. So that's great. Who else do you think,

Sharon? What about the value investor?

Would the value investor give up the position on this move to the downside?

I don't think so.

I don't think so either. What would the value investor do?

Probably just sit on it.

Yeah. They've acquired some on the way down. Remember that value always tries

buy on liquidity and pushes to the downside, right, in the trading range.

they bought there. So something here, something here.

This is just supply.

Supply.

Bought in somewhere here.

Bought a bunch here.

This is the first time when they were starting to buy more aggressively.

We could see this from the volume signature.

The volume signature increases, and then going below the support level, we are

quickly rebounding, so there is some buying there.

We see it here.

We see it here.

then we see a lot of buying on the way up. So this was the first time.

So it's a very interesting comment that Sharon has made. She said that some of

them are selling and some of them are buying.

So our goal is to define who's buying, who's selling. That's number one.

And secondly, kind of like to create that story, that Wycoffian story of what

has happened here.

So we are seeing value investors and then we're seeing a spot like this.

So let's look at what happens prior to that. We see a diminishing volume

characteristic here.

And as Wycoffians, we would be thinking, is this a possible phase C? And a lot

of us probably would be thinking that way because of how volatility has

diminished and so on and so forth.

we kind of see in the texture of the price and the texture of the volume as

as you know asking for some kind of movement to the upside a rally the rally

happens and this bar shows us that there is still a lot of supply and that

tells us that this is not the correct timing

supply is still present and therefore there's going to be a

every test of the support.

To confirm that, supply comes later on in smaller quantities than the one that

we had here on this spike, but after the upthrust, the price comes back. This

was a really good trade to the downside.

This trade is based on that increase of the effort into the resistance

that was based on the automatic rally.

and rejection of the price at this level.

So this trade would be really easy. So now let's think about this trade and

market participants.

On the way up, probably ITFs, institutional trend followers, are

this position.

Some other investors are also getting into this position. They are excited,

probably some earnings, announcements, and so on and so forth.

If the position does not go anywhere, what are they going to do? They're going

to start giving up that position if they're not value investors, if they're

trend followers. Is there a trend that has been established?

No. Is there a break of the trend that has happened?

Yes. And this is where they're going to give up this position.

All right, so they've done this once.

They got into this position and then got out.

and they burned on that.

All right, so what happens next?

How about this area right here? Is that reminiscent of what has happened here?

Quite similar.

Yeah, quite similar. So we're looking for analogs, and the best analogs

come within the same formation because the behavior of market participants is

current. It's the same market participants, so they might behave the

So from here, we are expecting some kind of rally. And this is a really nice

rally because it takes time. It doesn't take, you know, like one week to get to

the highs and then produce a lot of supply.

But it takes a more considerable time, more thoughtful buying and accumulation.

It overcomes the previous high.

It actually overcomes the previous up thrust.

And then it spends some time above.

So we see this, all of these signs as bullish signs.

If I would be in this position right here, opening up, and I would be seeing

this type of move, I would be extremely excited.

Now there is a couple of things missing there.

Those are more details about the sign of strength rally itself, the way how we

want to see that sign of rally.

But there are more bullish signs.

All the bullish signs that we see is actually in their ability of the price

stay above.

So look at how it stays above anything of what we've seen before.

We just don't have that type of staying power.

Every time we try to stay, then something happens, we go down. Try to

down. We do it here as well, but the way how it stays up, it's less volatile

than what we've seen before.

So that's also a good sign.

And then when the price starts to go down because there is some supply that

in, who's going to give up this position?

The trend followers, right? The ones that got in here. They did the same

here and then they gave up here. They're doing it the same.

Think about this as...

The analog to this, analogy to this would be, you know, you play in a

lottery, right?

And you know that at some point, let's say the price will go up, but you just

don't know when.

You don't know when you're going to win.

So you keep buying the lottery ticket. So here is one, here is the second one,

here is the third lottery ticket.

And then one of them is going to work out.

Of course, we want to be more intelligent about our selection.

And therefore, we are studying all of these patterns.

But even today, I was reading some of the comments from a very famous

trader who, I don't know whether he is a good trader or not, but a very popular

trader.

And one of his thoughts and ideas about trading was that trading has

an element of luck.

I don't necessarily subscribe to that idea.

I would say that in poker, as a game, you have more variance, so luck plays a

much bigger role than in investments where decisions by what the price is

going to do is based on the decisions of institutional participants and on the

overall, you know, participants like the Fed, the governments, you know, and so

on and so forth.

So therefore, there is less of a luck that we could assign to investment,

market investment, than let's say, you know, like any...

game like a poker where the chance is really a chance of you don't know what

card might come. You can calculate the probabilities, but you don't know

what card is going to come.

So here we are kind of waiting for the same things to happen.

But Sharon, something else is happening.

It's almost like a different analog that now we're looking at. Now if we would

look at this structure by itself, and we would be thinking, okay, well we

have

First structure, then we have a second structure, and then we have a third

structure. And look how easy it is, by the way, guys.

Divide it into phases.

First structure, phase A.

Second structure, phase B.

Third structure, phase C.

What are the intentions behind those phases?

All right, well, here we're stopping the trend, and we are testing.

What are we testing? We are testing that stopping of the trend.

Phase B tests again.

What are we testing? We're testing phase A.

Testing phase A. And then phase C, again, testing.

What are we testing? We're testing phase B and phase A.

But the structure is slightly different.

So I wonder, Sharon, if because of those failures, and I'm just

speculating here, right? So here is one failure for the...

Here is another failure for trend followers.

Maybe they are not considering this stock anymore as something very

At least for some time, we don't see that, right? So we don't see the same

of structure that we've seen before.

Yeah, the volatility has decreased.

I'm sorry, say again.

The volatility has decreased.

Yeah, there is such a decrease of volatility right here, right? So after

give up, it's almost like they're saying like, I don't want to go in into this

again. I don't want to make the same mistake for the third time. And this is

where it just takes off.

All right, so let's analyze phase C and let's maybe define all of the Wyckoff

points in there as well and define the phases within that phase C.

So we're looking at this. Obviously, the first point of interest for us is this

whole move to the downside. How would we label the low here?

Pardon me, that's the selling climax.

Absolutely. The first rally is going to be labeled as?

The automatic reaction.

Automatic rally.

So it comes here.

And then we have like multiple tests here. So whatever test you're going to

here, that's fine. Let's just say phase A.

And then where is our phase C?

I don't think Phase C comes there until mid -February.

Okay, so let's talk about Phase C. I think there was a question from Simon

on this.

How would we describe Phase C, Sharon? Give me all of the indications that we

would be looking for to find Phase C.

What are we looking for? Well, it looks like a spring.

Okay, so we are either looking for the structural spring, we're looking for the

shakeout, or we're looking for the last point of support.

If we're looking for the spring, because the shakeout seems like selling climate

had like this shakeout characteristics, and we don't see that before. So it's

probably either LPS or a spring.

How would the spring look like? I mean, like what would be the volume signature

and what would be the price signature?

Well, actually, the volume increases a little bit, not as much as.

Okay. So it increases, and we could define that local increase that we

say from phase B to phase C.

Okay. So do we have that? Well, we have some increase in supply, right? And

relative to phase B supply, let's say on average, we definitely have that. Okay.

And then we also would say that the volume would decrease from phase A

to phase B, right? Because we want to see that absorption

of supply by

institutions throughout the whole structure. That's what we're seeing in

picture. And then we also would like to see a local volatility where Weak hands

are giving up their positions, so capitulating into phase C.

Well, that's definitely there.

And it's definitely there, too. So we don't want that signature to be

high, but we want that signature to slightly increase relative to phase B

then decrease relative to phase A supply.

And that's exactly what we have here. Okay, so we have... a structural

definition, a spring. And by the way, with this spring, look how nicely it

goes below the phase B level, and then it just springs.

You would not be expecting a spring necessarily with such shakeout and with

such, you know, assertion of the demand at the end into the close of the bar. It

just basically tells you that there is so much value.

on this bar for big institutions

that most likely once the price

starts to go here, it's gonna be picked up again and more aggressively.

This was an extreme value for them and that's why in one day they kind of

it all up into the close.

So if this happens again, most likely they're gonna

buy much faster and the price probably would not go to the low of the shakeout

action. And we see that exactly. We see that spring happening. So spring number

three here or spring number two, whatever you define here.

All right, so if this is then phase A and we've defined this

move as a spring and potential phase C.

Now the question here is, where is our entry, Sharon?

Probably on that little gap candle right above the hammer.

I love this, yes.

We could actually consider the spring itself, because if we're talking about

spring number three by the rules, and we have to have a diminishing supply

characteristic, which we have, by the way, relative to...

what do this move, right? So supply is diminishing.

And then we have that, you know, that type of reversal bar.

And then Sharon is absolutely right.

This is a significant bar that reverses what?

That reverses the last commitment to the downside. So we're thinking phase C,

we're going to have something like this. So what we want to find is A bar that

commits last to the downside.

Okay, so we found it. Here it is.

Then we would like to define a commitment line through which the

to the upside should go through and close above.

Here it is.

And then we want to define that bar itself, right? So this would be a

significant bar.

We would prefer to have some volume signature behind it because that would

us that the demand is present and institutions are buying.

GAP was just a bonus to that. It shows that definitely institutions are buyers.

Why? Because GAP is an overnight action, and only institutions are going to be

so active in the overnight action, and we see that.

So our first point of entry is just almost perfect.

Our second point of entry probably would be on the next bar. Why? Well, because

we're thinking about a sign of strength bar on a sign of strength rally.

And we want to make sure that the sign of strength bar comes before resistance.

This is really important.

And we kind of see that with the sun power a little bit.

And indeed, you know, if we...

Look at the resistance that comes before the resistance. And then there is a

second pocket of the resistance here. So there is a resistance cluster.

So we could get in into this position in two trenches on these two bars.

So let's just say that one fourth and then another one fourth were opened.

So we are 20 basis points into this position so far.

Looks like a confirmation by the volume. Looks like a confirmation by the

relative strength.

Looks like it's trying to overcome the momentum as well after this low.

So everything is confirming.

Now, the biggest question at this point is going

to be how can we use our significant bar trend following tools and

how could we switch to the weekly bar?

So let's look at where we are at.

On this particular day. So let's say this is February 14th, 9th, 12th. So

is the beginning of the week, Sharon.

So we event it on Monday and then we event it on Wednesday.

So let's see how that week looks on the weekly bar.

Okay. All right.

And here we are. Here's this bar.

Was that the reversal bar, Sharon?

Sort of. Maybe the two together were kind of a reversal.

Well, again, when we think about the reversal bar, we're thinking about the

previous action, right? So here we go. We're thinking about the loss commitment

to the downside as a close.

Okay, so here it is.

Then we take the high of that bar as the commitment line.

And then we want to see a bar that overcomes it and closes above that line.

Do we have that?

Yes. Absolutely. Yes.

Here's that last commitment bar.

Close our commitment line as the high of that bar. And look at this weekly bar.

We have most definitely have reversed.

There's lots of them to go down into phase C.

And that's the key, guys, because we want to be in this position. We want to

identify the phase, C phase, and then we want to identify the reaction that goes

into that phase C.

And we want to catch that reversal.

And that's how we're catching the sprints, LPSs, and then shakeouts is a

bit different, but, you know, kind of the same logic.

All right, Sharon. Well, now that we've identified our points of entry, and

please note that on the daily, we actually had an entry here and here. So

by the end of the week, we are going to have some profit.

Where is our stop loss on these first two positions, Sharon?

For me, I think down below that red bar.

Yeah, absolutely. That makes a lot of sense. This is where institutions...

came in and produced some buying.

So if the price would go down and they bought at this level, most likely

going to support this level just because the price comes back to their value

point. And their bias is long -term to the upside, so therefore they're going

be looking at this as still a

long -term.

and they would still be buying.

And you would be thinking like, well, why would they be buying? Well, I've

shown you exactly kind of like the institutional way of how they would

into the position.

25 basis points, another 25 basis points, and they only one half into the

position. So if the price goes down and they still believe that this is a good

buy, they're gonna buy another 25, they're gonna buy another 25.

until they are satisfied with their position size.

All right, well now that we are on the weekly here, what I want to do is to get

in into this position again twice, Sharon.

So let's come back to the daily.

We have the stop loss on the weekly now.

Let's go back to the daily and then find the other two entries.

And then after that, jump back into the weekly.

Okay. So here is our daily.

Let's open bar by bar. And you just tell me, where do you think that

we should be opening our next position?

Well, I guess you haven't progressed. Oh, I see. Okay, you're progressing it

now.

I'm doing it bar by bar. Is this the bar where we would be thinking about?

Yeah,

that would be a reasonable one.

So what is the reason in here?

I guess they tried to go up on that

last white bar and didn't quite make it, but then it tried to go down on the

next bar and certainly didn't make it.

Yeah, so I kind of see the logic that you're going through.

The main key is the...

overcoming the resistance point, right? So the last time we tried to do that, we

couldn't do that.

We were slightly better.

And by the way, this is something that you guys should be noticing as well.

Look at the way how the price tries to go up.

And then look at the next attempt.

Would you say that the second attempt was better?

What do you think, Shar?

Okay, I'm not sure exactly where you mean right now. Okay, so we are looking

two scenarios.

So we're looking at this.

Oh, that, okay.

And then we're looking at this.

I think that's a little bit better, the second one.

Why is it better?

I guess because there isn't as much selling

tale. Right, right, okay.

So if we're looking at analog bars, we're probably looking at this bar right

here, and we're probably looking at this bar.

Yeah.

Why? Well, because there are a lot of similarities there. Same price level,

volume spike, and then the same spread signature, right? So

closing below the open.

There is a difference here. There is more supply that comes in here than the

question that we have here, oh boy, then why this is not happening right away

after the test.

The test is actually okay, and the supply drops almost instantly.

Here, the test shows that supply is still present.

I know, guys, this is...

Kind of like a very small nuance, but it's a very big nuance on how the price

actually gets out of the trading range. Because it's always at the resistance

that we're going to have the institutional sell down, and a lot of

going to sell into the strength.

So we've seen how in the second attempt, the test has

lower supply level.

And then we have another commitment to the upside.

So overall, second time was much better, and absorption has happened

much better at this level.

So when the price comes back to the same level, we would be expecting that

supply would come, and we see that from the volume signature.

But we also would be expecting that it will be more successful.

And is it more successful?

Yes, indeed.

Look at how this bar that has...

That volume spike, on par with those previous instances, does not do

anything, and the price continues up, and it commits above.

Indeed, there is a selling tail, and as Sharon has said, it has produced some

supply signature, and then the next day, there is definitely supply, but there

is also a demand signature as well.

Now, we would be thinking structurally here that we are in some kind of sign of

strength. probably minus sign of strength because we have a higher

right here. So maybe a higher major sign of strength is gonna come later on.

So we're thinking that maybe we're like in one half of this whole formation

and we could possibly maybe open another position right here.

So we're thinking maybe like a smaller backing up action, LPS.

So we need to think about what could happen here.

The way, Sharon, how supply has come in tells me that maybe we should have a

test.

But because of all of the bullish characteristics, I don't mind actually

entering here.

And we would be thinking that the first low might potentially be a lower low in

this kind of like smaller backing up consolidation, right?

Minor sign of strength, minor backing up action, something like that.

So I probably would be waiting for the test, but let's just assume that we

bought in here. Where would be your B stop loss?

Pardon me, probably down there below that moving average.

Yeah, makes a lot of sense just because of this bar right here that rests on

the support of that moving average. We kind of see that the other two bars to

the offside, they are smaller.

So whatever...

buying is there, it has some weak hands characteristics and therefore this

reaction right here. So a logical place would be below the moving average or

rather would be below that significant bar that had this pronounced movement to

the upside.

Okay.

And we would still have the weekly stop

loss just below.

just at the $5 there.

All right, let's go and see what happens next. Okay, inside bar, attempt to go

up.

Okay, so probably here is our retest here.

We might have another bar here.

That might be a smaller bar that is just gonna kind of conclude our movement

like this, and hopefully we're gonna go up, or we might still stay in this area.

might produce some more consolidation right here. It just depends. But we like

how the level of supply has dropped.

So another way to buy here would be just buying the breakout, right? So

let's say maybe like at $7 .25 or slightly above, we could buy that.

Let's see what happens next.

Okay, so here is that small bar. Guys, I did not see what has happened, so I'm

just interpreting the way how I see this.

But it's interesting how supply is diminishing more.

I would be okay buying here on the reversal or on the breakout.

Everything is behaving nicely here.

Here is that bar to the upside.

I probably would be even timing the intraday entry here on the high or low

some intraday reversal.

That would be the most aggressive speculative way to do that.

And then my stop loss still probably would be somewhere associated with this

bar.

I don't want to, we already came in twice, so this would be the third entry,

unless we're entering right here.

So I still would be keeping the stop loss here. So my first position might be

slight loss. My second position, smaller loss. And my third position, just a

regular loss.

So let's just see what happens.

Okay, we could potentially buy that breakout as well. So for instance, the

breakout out of the triangle affirmation. So this bar right here

potentially be like that forced entry.

that we have. So one fourth, one fourth, one fourth, and then one fourth.

And we are entering exactly by the guidelines of the Weicker Trading Course

we've created, right? So in phase C, we're gonna look for the reversal, and

we're gonna look in phase D for the sign of strength bar.

We got that.

Then we're gonna look for the backing up reversal.

We got that. And then we're going to look for the breakout of the backing up

action. And we got that.

And here is our four entries.

Here we are. We are totally loaded in into this position.

Our stop loss is going to be still associated with this bar.

And this is where all of our stop losses will be now.

So let's notice this. So slightly below six on the weekly.

And let's go back to the weekly.

All right, Sharon. I'm sorry, this is daily.

All right.

So let's do this.

Let's do it kind of like the way how we are doing it with the

daily.

So I think this is where we are, somewhere here.

Sharon, so we said that our stop loss is going to be somewhere here at 5 .5 for

all of the positions.

Now let's play this all the way.

Let's say that our intention is just to catch a swing, right? So where are our

targets? We're probably thinking, what, this levels?

Yeah,

so somewhere between 14 and 15.

This is the area where we're going to stop, listen,

watch.

Most likely, our PNF is indicating the same level.

The PNF count, segment 1, segment 2, segment 3.

Why? Again, look at the levels of supply.

That's the most important thing for us to identify where the count goes to.

It has to go to the climactic action, which is the local climactic action, or

final terminal climactic action.

overall trend.

Sharon, are we moving the stop loss on this last bar?

No, we could.

We could move it up to about six.

Let me redo this. Let me just do the arithmetic one.

Is this a significant bar? I think that's the first question that we need

address. Is this significant?

I don't think in and of itself. I think it might be with another one.

With another one, right. So maybe like in combination.

So if we're going to move the stop loss, we're probably going to move it in

combination. What I'm not liking is that we usually

would do the combination, or I call them combos, when you are going to have two

semi -significant bars.

So let's say something like this.

And these two we are combining into one. So instead of, let's say, a bar like

this, like we had prior, we need to have two bars like this.

Well, this first one does not really look that significant because we want

close to be above one half of the spread.

And, you know, it's somewhat there, but not really there. So we might as well

just keep it here. Or if we are aggressive, we might keep it below six

half.

These are our two levels.

All right, Sharon, I'm going to go with this bar by bar, and you tell me when

you're going to move the stop loss. Are we moving it on this bar?

I think I'd like to wait until the next one.

But is this a significant one?

Well, probably, yeah, except there are some of the selling deals.

Yes, but look at this.

These are the two significant bars.

Are we closing above one half of the spread?

Yes. Indeed.

Yeah, there is still some supply that's coming in. Kind of natural we are at

this, you know, level of the resistance.

We had a lot of selling, you know, around this area before.

So we are testing some supplies coming in. We need to see how the absorption is

going to happen. But could we move the stop loss?

Yeah, we can. We usually would love to have the stop loss two levels away. And

next class, we're going to talk about the stop loss, the time stop loss, the

price stop loss, the volatility stop loss, and so on and so forth. So we

have an aggressive stop loss here.

And I think that a more conservative stop loss would be two support levels

or two significant bar levels away.

All right. Well, that's great. So let's say that our stop loss is here or

aggressive stop loss is here.

Let's see what happens next.

Are we moving the stop loss?

Think about is this a significant bar or not?

Not, no. So we are not moving the stop loss.

Let me ask you a different question. We said that there was a supply tail on the

previous bar.

Was that supply observed?

It's like a little bit of it was, maybe not at all.

Well, think about this. If it wasn't observed, then the price would do what?

Think about the instances of where that happens. So something like this,

something like this.

Yeah, exactly. The price would probably decrease.

Yeah, the price would go down. If supply is not observed, the price would go

down. Instead, the price actually holds.

And look at how we are having all of the indications of the momentum and

outperformance.

So that's great.

Okay. We love to see that as the trade unfolds. All right. How about this bar?

Are we moving the stop loss? I'm not asking about the supply yet.

I'm asking about the stop loss.

Probably.

Maybe you might.

Move it to the aggressive level or keep it where it is.

Okay.

Let's go by the rules, right? Let's just say that we're just using the

significant bars, our first methodology.

Okay, then we wouldn't move it.

Methods, right? So first one, one significant bar away.

Second method, and we'll talk about this more in the next class.

Two significant bars away.

Let's just kind of have those two ways.

Just leave it where it is, I guess.

This is stop loss two.

This is stop loss one.

Let's play both.

Okay, so we would not move the stop loss because this was not a significant bar,

and this is not a significant bar to the upside.

Now let's address the supply issue.

Definitely a lot of supply.

So what are we doing here?

Supply occurs.

What do we do?

Just watch it.

Yeah. We just wait. Thank you, Sharon.

We are not selling right away unless our goal was a very, very short -term swing

trade, which already it's two months into.

Our goal is to capture a more meaningful rally into

like 14, 15 area or at least above.

this area, we would be thinking also that maybe this is a sign of strength, a

major sign of strength. So we might be going into the backing up action.

So I think that for aggressive position, you know, you either need to get out of

here for sure.

Let's say once it hits 10, you go on the daily and then just see that reversal.

and get out of this position and just take that profit, that would be times

for you, 100 % return in two months. This is a really good run or close to

maybe 80%. If you're a longer -term investor, then exactly what Sharon said,

just observed.

If the long -term trend is sustainable, and this

is... sustainability of the trend is going to be the focus of the December

special.

December special is going to be all about long -term campaigns and how we

trade those as well.

So we did intraday a couple of years ago. We did the swing.

Now we're doing the long -term, and we're concluding this, and this is going

be offered as just like one package.

Troika, right?

In threes.

We have, yeah, some other products that we have also in threes.

So a long -term investor, if there is a conviction of the long -term trend, and

more importantly, is there conviction, institutional conviction of the long

-term trends? I would say so. I mean, look at the volume signature, look at

the price reacts to that.

And we just, time two um on the move like in what two months that

tells us that institutions have urgency to get in into this position we will be

staying as long -term investors okay so next bar did we hit our stop loss no

we're staying next bar is this a significant bar

In the size, it is significant, right? So look at this.

We want to identify all of those significant bars or combinations, and we

four of them now.

So the stop loss, you could move the stop loss like this. But is this a

significant bar that makes a commitment above the previous commitment line,

which is defined here by this line? No.

So we're not necessarily going to move the stop loss.

We could keep it where it is right now. So aggressive here, conservative here.

We want to see that commitment to the upside. Remember that Wyckoff himself

that we only want to move the stop loss when there is a confirmation of

the commitment to the upside.

By the way, that might have been Hank, because when I was discussing this with

him, the movement of the stop loss, I thought that was his idea, you know,

developed as to when actually to move and where.

Okay. All right. So we are just consolidating.

Here we go. That's a big bar for us right there. And probably some points of

entry, some add -ons that we could see in that area.

Okay.

Sharon, what are we doing here? Are we moving the stop loss?

I wouldn't move it very much.

Well, let's think about this, right? This was the commitment line.

Is this a significant bar?

Yeah, it is that.

Yeah, so we have that. We have a big body, and we also have one half of the

spread.

I'm sorry, the close above one half of the spread. It is a significant bar. It

overcomes the previous commitment line.

So we definitely would move the aggressive stop loss there, and we

would be thinking not necessarily about this low for the conservative stop loss,

but more about the low of this trading range.

So here is our stop loss number two, stop loss number one. Okay, great.

Nothing that we do here is different than what we've done here or here.

Supply emerges, and as a long -term investor, what do we do? We just want to

see. If the conviction and sustainability of this trend is going to

we're staying.

Here we go.

Nothing happens.

No movement of the stop loss.

Nothing happens.

No movement of the stop loss.

By the way, these two bars are actually showing us the test of the supply that

came on that big bar in the first week of May.

Is this a significant bar?

Yes. Yes, absolutely.

The body is significant, and the close is significant, and the close above the

commitment line is significant as well.

So therefore, this is the bar that we're looking for. Stop -loss here, and then

conservative stop -loss here.

Yes. All right, great. We're close to our area. We said 1415 long -term

resistance based on IPO pricing.

So we would be looking forward to see, you know, price going into that area.

Nothing happens here. Some supply is coming in. We want to recognize that

diminution spread characteristic, but no movement of the stop losses as it is

not a significant bar.

Next bar. Is this a significant bar?

Somewhat more so, yes.

Yeah, the last bar is a significant bar. So we have one, two, three,

four, five, six significant weekly bars for us. And

also we fall into this long -term resistance.

Yeah. Okay, so also, and we're taking more time here than I wanted, but... You

know, this is important, so let's conclude this. We'll practice this more

time as we talk about stop losses.

Look at the texture with which the price moves first, and look at the texture

with which the price moves now.

It's very different.

Yeah, a little bit.

In which way?

Okay, you're getting a slight decrease in volume now.

What about the price bars themselves?

When you compare one period to the second?

I think more trend followers are coming in.

Yeah, there is more like aggression, aggro

behavior, where they are pushing it much better.

Easier movement.

The price travels price -wise more over distance than originally.

It took two months to go from $5 to $10. That's $5.

And then from $9 to $14, the same $5. But we traveled there in like a

month and one week.

So ease of movement.

Momentum is increasing.

Velocity is increasing.

We're seeing all of the positive signs.

Institutions are getting in.

We're close to that long -term resistance.

When we are close to that target and we go into more of this speculative run

when momentum velocity increases and more participants are trying to get in,

this is where we could expect some kind of mean reversion trade.

This is where...

Other institutions, value investors, they're going to take some profits and

want to book them.

So the key for us here is to go to the daily and become more aggressive with

stop loss.

So let's do exactly that. We are in the second week of June.

Let's switch to the daily.

Here is that additional trading range that we've seen.

Okay, so did I say second week of June, right? Yeah, here we are.

Here we are.

So we could be extremely aggressive here because we're seeing the speculative

nature with which the price moves.

And by the way, there was an add -on right here in this area.

And we would be using the same.

principles of the significant bar as we used on the weekly.

We could define, and let me just again do the arithmetic.

Okay, here we go.

We can define the significant bars.

So here is our last significant bar, last commitment. This is gonna be our

aggressive stop loss.

And then two significant bars away, I probably would be like thinking about

maybe these two bars, semi -significant, and stop -loss somewhere in this area,

so slightly below 11 .5.

So this would be a long -term investor.

This would be more of a swing trader.

You could be even more aggressive and even get out around this bar if you're a

significant trader.

I'm sorry, if you're a swing trader.

But you can wait and see how the price could take you out.

so we're looking for something of a climactic run on the daily we're also

looking for the change of character uh on the daily and we're looking for the

change of character bar for the swing trader all right let's see if it's going

to just take us out or if we could possibly gain a little bit more so

this kind of unfolds uh

in a less attractive way for us, suggest some weakness, and suggest that we

might actually see the move to the downside already.

So we're probably seeing a climactic run here with the majority of the profit

taken on this bar, and then we're seeing how that supply actually diminishes

together with the demand as well. And it's that demand, you know, demand.

Fading signature that could be the end of the move and that's probably what

we're seeing right here So I think that the next bar could potentially just take

us out with this stop loss If I would see something like this, I probably

just get the stop all of my stop losses even aggressive up to here We've done

really well. Here is the point of the entry Here is the point of the entry.

Here is the point of the entry

we could have entered here as well. So if we're exiting at, let's say, 12 and a

half, about, maybe 12 .75, and we bought on average maybe around seven, seven

and a half.

So we've made this March, so about maybe like

70 % return in what, one, two, three,

four,

in maybe four, four and a half months.

So this is an extremely good return because you have to think about

percent here, annualized P &L, and it's going to be astronomical.

The key, obviously, is just to be in this position always with all of your

plus leverage.

using your capital efficiently and optimally. All right, well, let's see if

going to take us out or not.

Okay, probably did not take us out. So let's just assume that we're still in

this position. And this is so nice because we might be wrong in our

right? And we're still in this position.

So now we're feeling like, okay, stop loss worked.

This reaction now that we're assessing it was not that dangerous.

So that's great. And we're trying to break out to the upside. If we're going

have another bar like this, we're going to move the stop loss more aggressively

and just go with that aggression until we are out. So let's just go quickly

here. Are we a little bit beyond the time?

Okay. So move the stop loss below this last bar.

Move the stop loss below this significant bar again. So we are at 14

And this looks like now a more defined climactic round. So here we could be

aggressive and put it right below the loss commitment to the upside or still

keep it at 14 .5.

One way or another, I think it would be good. We would be out here if we move

the stop loss below the loss commitment.

All right, so this seems to be a very interesting bar.

So this looks, Sharon, like a bar like this, but slightly different

volume signature, right? So there is some synchronicity now between the

price and the volume, the price and effort, and this

looks a little bit connected. Okay, so.

Our conservative stop loss is here and our position on the swing is out.

So let's see how conservative stop loss would be hit.

All right, so here we would be hit on the open.

Okay, great. So I think this is the conclusion of that run.

So opening positions here, here are some add -ons here that we didn't go

through. And then the exit here and then here.

And we kind of see that this is a change of character right there. And if that

we don't recognize, then this is a change of character for sure.

And this is the trade. This is the whole thing. So we're looking for the

definition of the long -term position in the big trading range with

the short -term Wyckoff labeling.

We want to time it into phase C.

We want to enter on the significant bars that are reversal bars.

And then we want to use the trend following technique like significant

stay in the position until it gets us out.

And that's it.

That's the whole thing.

Sharon, any questions?

No, not really.

Okay. Well, let's pick this up next week where we left it off with the stop

losses. We'll talk about the time stop loss. We'll talk about volatility stop

loss and so on and so forth.

Sharon, really good job.

Thank you. Really good job. Yeah. So just keep doing it. Keep doing it. The

you do this, the more I see the skill has been elevated, which is very

to me.

So keep practicing.

Okay. All right. Thank you, Sharon.

And thank you, guys.

Thank you for sending your homework. Thank you for being active during the

class.

We're covering a lot of material, so it was really good. I'll see you next week.

Don't forget about your bias exercise, and don't forget about the sun power

exercise.

Thank you, guys, and I'll see you next week. Bye -bye.