Original subtitles

Hello everyone, today is October 8th and this is our session number

5 of the Wyckoff Trading Practicum course.

Today we're going to go through our usual stuff, bias game, we'll discuss

anatomy of a trade, you'll have to remind me where we are with that and

we're going to do next.

Some Q &As here and there. Market update. I thought today was very

so deserves kind of mentioning at least, or just looking at what happened today.

Effort versus result. We'll talk about the synchronicity. We'll go through some

examples. This will be an exercise as well.

Then we'll start our first exercise action, first action sequence exercise

volume and price.

So I'm excited about that.

October special is going to start on Thursday.

Don't forget about that.

This level is appropriate for this special.

And for those of you who are interested in scanning and filtering,

this is a must to attend.

All right. Let's jump to our session.

As always, everything is for educational purposes. Please stop the video.

and read the whole disclaimer.

Buyer's game. Let's jump into that. Well, first of all, I told you guys that

this is probably going to be the easiest buyer's game ever for this particular

class. And I was not mistaken.

99 % of you just did a tremendous job identifying this as a reaccumulation.

And so that was really good.

And I've seen quite a lot of, you know, different comments on why.

So I'm just going to give you my reasoning here right now, and then we'll

some of the questions on this.

We are coming in into the trading range after the uptrend.

So therefore, the bias is to the upside.

We're thinking about the reaccumulation to confirm.

or to fail.

As we're going into the later stages of the uptrend, we're seeing how momentum

is diminishing, so we're expecting some kind of change, change of character,

probably after an attempt like this, where we see that supply is coming in,

it always looks like a preliminary supply that comes in.

And then obviously after that, right away, we see that change of character.

The change of character does not produce a lot of supply signature.

So therefore, it's not high.

So therefore, we're thinking that CO is not selling.

CO is not distributing on the change of character. So most likely, we're still

in the reaccumulation.

We know that after the change of character, after the bind climax, and

looks like a distributional pattern right here, with the change of

automatic reaction, and then the next swing up to test the highs is gonna be

secondary test, and that would conclude phase A.

And then, now when we look at this, right, look at the texture and look at

kind of like the, different segments for this trading range.

So we have an uptrend, an uptrend has a lot of momentum,

diminishing momentum characteristics,

distribution with the causality for

the change of character or even lower into the sign of weakness, change of

character.

and then secondary test.

And then we're kind of seeing that this by itself is a segment,

then this by itself is a segment, and then this by itself is a segment.

So we're instantly thinking test number one,

test number two, test number three.

And then we're thinking, okay, so what has happened through these three tests?

The first test was somewhat of the mediocre quality for the distribution.

The volume was not that great.

So therefore, supply was low.

And then the result was somewhat negligent for the distribution, right?

result.

And then suddenly we have a change of behavior.

What is this change of behavior? Well, a lot of supplies coming in, a lot of

volatility comes in. So we need to decipher this segment, this second

So supply increases and then we have test, test.

So throughout this test, supply diminishes, and

we have one bar that commutes to the downside, and then all other

bars are actually recovery bars after that, and the price goes up.

So this looks more like a spring.

on the diminishing supply characteristics relative to the supply

in on the change of behavior.

So this acts bullish with the recovery, and then obviously this whole rally that

takes us to 144,

big supply bar here, but also a lot of excitement, probably some

news, maybe earnings, maybe some other news where the stock has such a strong

rally and then sell incomes.

So this celling suggests that we're going to have some kind of reaction.

And now that we are in this recovery recumulation range mode, we need

to see what kind of reaction we're going to have, what kind of quality of the

reaction we're going to have.

So what do we see as a quality or as a character for this reaction?

We see high or low.

We see another high or low.

we see that volatility increases and then volatility decreases.

Those are all bullish characteristics.

We also look at the volume signature and on the first selling, the volume is not

that high relative to what we've had on the second test in phase B.

So therefore, supply goes down relative to the previous instance where there is

a break to the downside. There is a break to the downside.

And that suggests that selling is not that heavy. And with the further

diminished volatility, diminished supply signature, higher lows, we're thinking

that this is just a confirmation that this is a bullish scenario.

So I thought that the key was like just seeing this three areas and seeing how

volatility increases into phase B and then decreases into phase C. So

this is going to be our phase C, phase A.

Phase B, upthrust action, and then we should have a bias to the off -site.

Here is the solution. Let's see how the internet, how the Twitter voted. We had

132 votes and 61 % said it's an accumulation. So this is a very decent.

uh rate and actually i thought that it will be a very decent rate just because

the chart looked very bullish um and again you guys just nailed it like your

rate was like over above 90 percent uh in this class uh so i'm really pleased

with that um twitter did much better than on other bias games which is

also very interesting by itself

All right, guys, as a homework, one of the things that you should be doing is

coming back to this slide with the Wyckoff story and just going through all

these points again and just, you know, reading what is it exactly that we wrote

here, you know, and what is it that we want you to read.

So please, you know, definitely do that.

All right, here is your next bias game.

I think this one might actually produce

some kind of difficulty.

We'll see how that's going to go.

So it doesn't want to project, but let's just see.

Okay, that's your next game.

All right, and now Anatomy of a Trade. So guys, you have to...

Kind of let me know where we are with that. I thought that we had a stop loss,

right?

That I think was hit or not.

Please walk me through this.

Didn't we say that the stop loss is gonna be somewhere here?

I mean, the only reason why the stop loss would not be hit is if we're using

close as our stop loss.

Rick is saying, I think we hit a stop loss.

Okay.

Okay, Eric is saying, I think we bailed.

Okay.

All right. Well, then, you know, we just kind of have to think, you know, what's

next because this is how trading is.

If you are in the position, you came in into the position. We came in here. I

think that, you know, we.

got out partially here and now partially here. So probably was

like 50 basis points loss, something like this out of

1%. So it was not like a biggest loss.

And I wonder now what you guys are thinking. I'm kind of letting you like

this.

And I want to experiment with this exercise a lot because, you know, this

class where I actually can experiment. Other classes are, you know, more

official and so on and so forth. This is like our R &D, you know, kitchen here.

So I wonder what your thoughts are. You know, what is it in the post

-analysis that you see, guys, here with this particular stock?

that may be attributed to an early

exit. And let me just put this on a chart.

All right, so here we are.

So what do you guys think?

Eric is saying we bought it very close to a significant long -term resistance

level.

Yeah, I think it's a good thought, right? Because as we look at this level,

me just take another color for the pen.

Right, so Eric is saying we bought two very close to the long -term resistance.

Which one? Well, we're probably talking about all of this, you know, the

juncture of where we, you know, would be having some resistance

because of these highs where the supply has come.

And obviously, I mean, for the long -term campaign, we...

should be buyers before eight dollars so anything let's say in this area right

here that would be our long -term campaign buy

and

then once we have the momentum to accelerate that's when we could play the

momentum swings and have maybe like a couple of trades three trades where

we could implement some swing trading, very short -term duration trades, but

very, very profitable each time.

We also have to think, and I think this is where a lot of the mistakes come for

us, like offense, when we are thinking about the backing up action as something

that is so temporary, something that...

It happens so quick, and it should pass right away.

And for the structure that has been developing for now for three years,

it requires some time to be in this consolidation, to be in this change of

character. Plus, also think about how the change of character develops.

We have quite a significant rally, which lasts for

about... eight months or so.

And then what do we have next?

I think what we have next is actually a distributional pattern right here.

It's like a small distribution that leads to the change of character.

So we're probably still here in kind of like this buying climax,

trading range, and then a change of character.

That is still, by the way,

unfolding and we might see some attempts you know to go even lower and I think

that we're probably going to go into this area right here where a lot of

has come so that would be the value zone and that would hit our moving average

which is great in this case it would be a slope and more on average so there

might be an opportunity right here so what is it you know that

We are thinking in terms of potential mistakes that were made.

Well, first of all, we are just starting at a very, very kind of like

unfortunate time. We're starting basically after the conclusion of the

strength rally.

So where are more appropriate points of entry for us?

Stephen is asking, would you point out proper entry points?

Eric is asking, from a Wyckoff entry and exit perspective, this would have been

a late ad and probably would have been trailing our stops close.

Yeah, I think that's what we are definitely discussing. So where is our

entry? I think that anything here, here, this one right here,

this one here.

this one right here, this one, this one, and then we are

going into our acceleration.

So I think that this would be probably sufficient.

I think you could use this one, but please remember, what are the rules of

we are accumulating, you know, at which stages? We are saying that we want to

accumulate before we hit resistance.

And resistance is somewhere here in this area.

So this is probably going to be our last add -on, but along the way there are

quite a few, so you could get into a significant position still

as the vertical absorption happens.

And what's nice about getting in on this vertical absorption is that it's going

to get you up.

little by little and then it's going to have an acceleration just because

everything has been observed and demand comes in very strongly um so yeah i

would agree that probably this bar right here is a little bit too late but i

think that the key mistake was thinking that this is the backing up action and

we are done with that uh and that it cannot be you know larger here

I think that once we turned and reversed here, there could have been

an understanding of how deeply we could go, so maybe like a P and F count.

So let's look at that really quick.

Steven is asking, are you using significant bars for entry points? Yeah,

absolutely. That's exactly what I'm using.

All right, so let's just quickly play with this. Let's put...

An experiment was this, okay, maybe a little bit more.

So let's put ATR, one point reversal.

Okay, well, here we see something.

All right, so let's count.

We have one, this is a failed up thrust.

Two, three, four, five, six, seven.

seven boxes times one reversal times 0 .84

that's the size for the box

okay

5 .88 and we're going to take the count from 15 .96

So that brings us to 10 .08.

Somewhere here, somewhere where we are.

That's great. We are somewhere in this area where we should potentially have

some kind of rebound.

Now, in some of the cases, you know, for the long -term campaigners, you could

have something like this.

like in Shake Shack, we had the same type of structure where you

have a trading range and then you have that sign of strength, major sign of

strength. So where is in the price cycle, you know, the sun power?

Probably somewhere here.

This is a quite significant reaction after the sign of strength.

And look how it touches the moon average.

And we're going to find the same elements in the relative strength for

power and in the momentum. The sine of strength defines that bind and then

it's, you know, it's a quite substantial reaction.

Let me give you a different perspective on this reaction so that you would kind

of see how deep this reaction was.

Here you go.

So from like 47 to 36, pretty deep. And again,

structurally, it goes to the same place.

So we see some kind of vertical absorption first, and then we see

acceleration. And that's a very typical construction of a swing where we, you

know, the last class, you know, we were studying about house.

Screens have different characteristics, different parts to this, different

segments. Well, here is your segment, one, two, and then three.

So the third one, high momentum speculative segment, brings us up. But

just somewhat of a speculation on the way up.

And the price usually will come back to the origin of where that speculation has

started.

volume has to increase in order for us to stop thinking about you know, let's

say add into the position some power in some power and obviously this is a

great trade where The price recovers so we want to see something like this when

the price recovers and then then power and hopefully we could add to the

position All right

So what are we doing then at this point, guys?

One of the suggestions here came from Roni. Despite possible reversal in the

sell zone, could we try for a short -term swing trade, maybe 15 to 25 %

run with tight stop loss?

So I think the idea here from Roni is to think

that we could probably

come back to this zone which is labeled as a selling zone

and then uh you know just have this short -term trade uh which could

be that 25 30 percent um yeah i would definitely think about that

uh for sure um again you know with this

being a buying climax trading range then I'm thinking that this is an automatic

reaction, and then we're going to have some kind of secondary test, really.

And it probably will even go above this zone just because how

strong the stock is.

So there might be some kind of attempt to go and reduce this high. The biggest

question for me is, are we in the trading range right here?

Is it going to take us longer?

So with that,

Let me ask you one more time.

What do you guys want to do?

You want to steal trade from power, right? Why don't we just continue with

Is that going to be the vote?

Let me know.

And if that's the case, we just continue with this stock.

Eric is saying, could we look at another stock?

Yes, we can, for sure. But isn't it kind of like a chase that we always would be

having, like, you know, to chase for the better performance stock?

You know, this was a really good performance stock. It went from $6 to

So selection -wise, it's actually a high -momentum stock at this point.

So why don't we, I'm seeing that majority of you guys probably like 80,

saying, let's just stay with the stock.

Yeah, okay.

I would do the same.

Let's do that.

Okay, so at this point then, what do we do?

We went through the analysis.

Do we stay out? Do we stay away?

Do we buy here or do we sell here?

so let's just vote write it down what you think give me some kind of maybe

even context i mean if we are buying here we're buying here long term we're

buying here short term dmitry

is saying intraday uh pnf target met why not trade this again with the tight

stop loss steven is saying do you want to take

to be always in the position. No, not necessarily. We have an option to stay

away.

That's definitely an option.

Arvind is saying, wait for a spring and then buy a test.

Dmitry is saying pro position.

So I think what we should do is

France is saying, okay, wait for the test of this reaction.

I think what we should do is just to have different type of trades where, for

instance, we, you know, as

speculators might have a short -term trade with the specific conditions, but

those conditions, Dmitry, have to be described in such a way so that we

even doubt that the trade has happened.

For instance,

I'm seeing that, let's say, this spread is starting to diminish

on the way down.

With that, the volume signature is going down as well.

So that tells me that probably we are in the scenario where reaction happens and

supply is kind of exhausted, and then we could expect some kind of rally.

So that's kind of how it looks here, that we could potentially have that

So we need to describe conditions under which we would say, yeah, indeed, we're

going to go into this position.

Let me just quickly bring up an intraday.

i'll just see on the intraday so here's our 60 minutes

still a lot of

selling here right here but it

doesn't go below the support level which is great yet the demand is very poor as

well so um

I probably would be looking for some type of confirmations here rather than

buying at this point.

Okay, so some thoughts here. Wait for the test

of this reaction.

Today's action was test -like.

Wait for a high or low.

If this holds, this is going to be a high or low.

higher lows on the intraday, market headwinds would lead me to just wait for

better confirmation that was from Dmitry.

So I think that for the trade to the upside, if we're thinking bullish

scenario here, and we kind of should because we had a reaction to the

We see the diminishing momentum characteristics in this part.

of the decline, we see a change of character.

We have the first high -low, we have another high -low relative to the low

itself. We have two new highs.

So we need some kind of confirmation that the price will not go down.

So it could be either overcoming some kind of short -term resistance point,

significant bar to the downside, or overcoming maybe a more significant

and i think that both are relevant here so if we would see something like this

we could say that we could have a pro position here that's number one and

maybe a second um uh trench right here so if we describe it like this in

this terms then i think that it's possible that you know we could um we

have a trade here um and we would be thinking that You know, the target is

to be somewhere up there.

Maybe in this area where a lot of selling has happened.

So I wouldn't be surprised if the price, you know, would come here. As Ronnie

was saying, you know, 25%, 25%, 30 % return on this trade. That's a

But I wouldn't be extremely aggressive here whatsoever.

I would be just kind of like taking the probe, seeing if it's working.

adding to that probe if it works um and then probably in this area scaling out

and then scaling out again

something like that and then seeing what what would happen here

Stephen is saying market context will could be changing wait for test of the

and reversal uh to swing for the reversal um uh to the second test

test yes um i think confirmation is the key here so uh definitely would be

waiting for those confirming signals uh don't we have to wait for the cause to

build for upswing from arvin uh yeah absolutely we have to wait but don't

now this is the intraday so that causality you know could

be

constructed very quickly and then again look at how beautiful this change of

character is wow and demand is just

cannot capable of overcoming this so i think that you know we should

definitely wait um and maybe even this trade right here within this range is

that great is not the greatest um

I'm just thinking if this is a trading range, just to go up a little bit here,

and then just stay in this range, something like this,

and then come back.

So definitely, if there is a trade here, this is going to be a swing trade, so

we're just going to be in and out, something like that.

All right, well, let's see.

Anybody wants to entertain the trades to the downside, I know that we're in the

low price stock here, but still, because this also could be interpreted as a

sign of weakness, and now PSY, phase C buying climate,

something like that.

And usually this should lead to the sign of weakness, so we are right there.

No note takers? All right.

Okay, well, let's see and wait.

That's what we would do in real life.

So that's what we should do now is this.

Okay.

All right, let's jump to the Q &A.

This one is from Corey.

When I start looking at the chart, and this was that

question, that 1 % question on the bias game.

what is it that either I'm not seeing or I'm seeing but maybe some

confusion.

So we want to find that confusion point of where Cori

in either observation or analysis itself kind of goes a different way.

So the question here is when I start looking at the chart, it feels similar

the previous week's chart of the McDermott.

Synchronicity between downward effort and result.

Lack in demand when it's going up. I must miss some big picture here.

Can you compare these two charts in the class? So I put two charts here.

And we just went through this last week's.

Home assignment, it's at the bottom, so it's not a distribution, it's an

accumulation.

Whereas McDermott was a distribution.

And I kind of want to pose this question to the whole group.

What do you guys think? Where is that big distinction between

a distribution and accumulation?

What do you guys think? Eric is saying the big difference to me is we don't see

the distribution area ahead of the last push up.

On which chart, Eric?

Well, what do you guys think the biggest difference is?

What is it for you?

Any type of differences, nuances that you see here that would distinguish

a distributional pattern from accumulational pattern.

All right, let's see.

Okay, this week's bias game did not have the same distribution area as the week

before. so eric you mean this one right here

ahead of

the buying climax okay well this is the buying climax trading range right here

so this one

Yeah, I'm not sure. I mean, obviously, there is some significance to this

because this is where initial supply has come.

I'm still seeing these two formations right here as similar. And I think this

what Corey is actually implying is that, you know, the charts are somewhat, you

know, similar in the construction.

Right. So look at the same type of.

almost textures right is your distributional range after the

upswing then you have maximum volatility

maximum volatility then you go through the period of testing

testing

then you go into a rally

I'm going to rally.

And then you have a down move, and then you have a down move.

So this is quite the same in terms of how it all unfolds.

What is the difference?

Why in one case we have a distribution and another we have an accumulation?

Let's go through your comments.

The character in which the selling occurs.

Okay, Dmitry, well, you have to be a little bit more specific.

I would agree that, yeah, if we look at selling, the character changed and it's

different, but in which way? I would like details.

Higher lows versus lower lows as we get.

to the decision point.

This one is from Steven. Yes.

So this is one of those, you know, solution type of answers that we

could see here. Look at this low right here and this low right here. Let me

another color.

This low, this low, and this low.

Higher lows.

Here we have the low that is the lower low to the previous low.

And then we have that break of the trend. We don't have that break of the

here.

So structurally, we definitely see that deterioration. I wonder where else

structurally you would see the difference.

Where else in the price could you see that difference in the structure?

What about here at the top when we are testing the resistance?

This looks like an upthrust. This is an upthrust as well.

But look at how much more aggressive the upthrust in the second stock is.

First of all, we have that big, big rally, intraday rally that comes above

resistance point significantly.

And then we have...

quite a few attempts to stay above and we have quite a few closes above so

staying around that area and then when we go down

when

we go down um we could see that um

Levels of supply here, even though average,

but here in this case, when we go into this

latest sell -off and then another couple of reactions here, supply really

diminished here, whereas here supply is somewhat still average.

It's present. It's there.

And definitely we are not committing as much to the upside right there.

Okay, so there are some subtle differences here, of course.

But then I also would like to look at the rally itself.

Look how the rally develops, right? So if this is the trading range right here,

then this is the rally.

Look at the difference in this rally.

This is such a high momentum rally. And look at this.

at this rally, definitely not a lot of momentum behind that.

All right, couple more comments.

In accumulation, three high lows while in distribution, we have a low low from

Arvind. Okay, great.

Later part of the COO chart is very different.

All at higher levels from April on, staying above the resistance from

Yes, absolutely.

Effort versus result analysis in selling and buying.

Synchronicity of effort and the result in buying and selling is what I'm trying

to practice right now to differentiate between accumulation and distribution

from Dmitry. Okay, well, this is great because we're going to talk about

synchronicity today for sure.

So where is that synchronicity here?

we might not even see it yet right so synchronicity usually is going to be

increasing effort that is followed by the increase of the result in the

direction of that effort so in both cases we see how the volume signature

diminishes so obviously this is the case where we're going to look at

diminishing effort characteristics and then advancement of the result so

therefore we are going to have a out of sync effort with the

result and that's going to be our determining factor on the bias itself

okay

so dmitry is saying there is some synchronicity uh yeah there is some

synchronicity whereas supply slightly increases and then we see the ease of

movement to the downside.

As well as here at the end we could see that effort is increasing and then

the price is increasing as well and with the different character than the

previous rally.

So that tells us that there is a synchronicity and with the increased

price much freer moves either to the downside or to the upside.

All right, great.

Let's go to the next question. This one comes from Dmitry.

Let me say that we missed phase C entry.

And we're looking here at Veep Shop.

Okay, so this is current. So we're talking...

Most likely about this area right here.

And I'm looking to enter the position on a backing up action.

I assume this is appropriate in the methodology. We won't get the bargain

we could have in phase C, but can we still have

lots of upside potential here?

What are some nuances of entering at this time around backing up action, and

do you have any tips?

Do you have any tips based on your experience of entering on the backing

action?

Here is an example of what I believe is a backing -up action. I particularly

like the decrease in supply presence as the backing -up action reaction is

unfolding. This looks like a strong accumulation stock, and I want to go

Also, can you refresh us on why you prefer 252 moving average on your

charts along with the 63 for the relative strength?

So we're looking at this structure. Let's first of all, just for those of

who are not familiar with this stock or with the structure of this stock, and

just for me to refresh my memory as well.

And here it is, Dmitry. I would say that this is the initial thing that

I would love you to do.

We want to understand the whole story of the stock that comes right to the

point of interest for us.

So we're seeing here value selling into the highs, and then the price just

drifts.

Trend followers are getting out of the position.

Again, being inactive.

Some buys here, and then again, some selling.

And then from here, we are trying to go up above

this support level, above this support level, and we are experiencing all of

this troubles. Yet, we are definitely

in the uptrend here.

And I think that we're looking at this formation, just a smaller formation.

So there is one trading range, second trading range.

And then this acts as a sign of strength and then the backing up action.

So looking at the long -term picture, obviously if we're gonna break to the

upside, we have a lot of potential here for higher prices,

something like that.

And it seems the way how it tries to rally, and this is exactly what

we've studied in the last class, it looks more like an absorption period

rather than a speculation, wouldn't you say? It looks more like an

absorption rather than the momentum.

Even though there is momentum here, there is momentum here, but we...

are not seeing the same type of the momentum like we've seen here or let's

on in this trend right here it's very laborious it has a lot of reactions uh

we want to recognize that and we want to make sure that you know all we

understand that next moves up could have more momentum so um with that in mind

let's look at the daily uh at the smaller

So this is where we are, looks like phase C, sign of

strength, and for the sign of strength, the confirmation, we'll also be looking

at the backing up action.

So backing up action has started, and now we have to look at the character. Is

this a true backing up action?

So how would the true backing up action look like?

Well, it's going to be a backing up action that's going to have some

retracement.

And then it's going to stay up above that level of the support,

right? So we need to see some kind of reversal and continuation to the upside.

So how would you be answering this?

Let's say that we're still thinking that this is a backing up action.

let's say that there is some kind of reversal right here. I probably would be

looking into this area as a whole, and I would be thinking that this is a whole

training range.

This could be a smaller bind climax, automatic reaction, secondary test, this

our phase A, B, and then possible phase C somewhere here.

So it's out of this reversal.

where i want to initiate this position so you're basically doing the same thing

as with the accumulation range you want to look at the range on the intraday

basis and you want to identify phase c d or early e and then just go from there

so again wait

for the confirmation and that confirmation

should come and will come on the intraday basis first.

And then if it fails, then what's good about this is that you're

out of the position. You're not in the position yet until that confirmation

comes.

So hopefully we're addressing this.

And let me see what else here. There was a second question.

Okay, so also a question about 252 moving average

against maybe like 200 and then 63 moving average for the relative

So 252 is just a year.

It's just a more accurate representation of the year because when you look at

200 simple moving average, you're actually looking at about, what, about

like three and a half quarters.

not four quarters.

And just kind of became a habit. But then 63, and also I have 21

or 22.

So 21, 22 is the number of trading days in a month.

63 is the number of trading days in a quarter.

And when you look at the 63, then you're instantly thinking, you know,

Institutions behave based on the quarterly performance.

So therefore, it's an important number for us to look at. It's an important

moving average because they will be acting based on that number and we want

catch any type of abnormalities around that.

So that's why 63.

Okay, good.

Some other comments.

Okay.

What if I trust all of those?

Okay. Let's talk about the market. I thought that maybe today we have to

just because of where we finished and what kind of bias we

finished. so i want to ask you guys what do you guys uh think for the bias right

now are we still bullish are we still bearish or are we bearish

for the markets and obviously i'm showing you a bitcoin here at the bottom

uh you know the oil gold and vix

What do you think about the markets at the top, the S &P, NASDAQ,

Russell 2000, and the Dow?

Anyone else?

Just have one reply.

Okay. Okay, interesting. So majority of you are bearish.

And I think today's day is probably warranting

to have that view.

I mean, obviously there were some other earlier signs, like the deterioration of

the rally, was the low high, was the low momentum, low volume signature.

But then this latest reaction was not that aggressive, was not that

strong to the downside.

And the last, the three days before today were actually...

quite positive.

We are stopping at the higher low.

We then have two days that have high momentum.

And there is some volume associated at least with the first day, so that's

great.

And it looks more like a potential phase C and maybe an attempt to spring.

After the sailing climax, automatic rally, secondary test, phase A. So we're

thinking, wow, this is a great spot.

Let's just see if that's going to materialize. And then today just has

of testing action.

Now, we definitely have to keep in mind that the test is still

unfolding.

How so?

Well, because we have not reversed this bar to the upside yet.

So this means that we still could have bars that are above

the previous low, and it still could be a sprint and a test.

And obviously, if it fails, that's when we're gonna say that, okay, well,

This looks more like a distributional formation, and now we definitively have

confirmation of that.

And usually that confirmation will come in a structure with an upthrust on

that short -term failure, so somewhere here.

And if indeed the bear market is to unfold, this entry, which

is basically the break here, would be still early in the downtrend.

Well, tomorrow is going to be extremely important, and I think that everything

goes into Thursday, October 10th, when the meeting between the U .S. and China

is going to happen.

And it doesn't look positive.

At least this is the way how the market interprets this. So I'm thinking that

there is a possibility here that we could have you know a very quick sharp

to the downside where volatility just expands so quickly so uh

that's definitely a possibility um and what i also been noticing guys a lot

lately when i watch the tape it's almost as if

there is

Like there is a bias that you could clearly see in the institutional buying.

And then because of the tariffs, everything derails.

So it's almost like a bullish picture could derail really quickly if the

tariffs are not taken care of.

And I think today was kind of like that day.

You know, we are...

Still bullish on the intermediate picture, on the long -term picture.

We just had a great reversal, less significant bar, commitment to the

and yet almost instantly we are reversing. So those are the best type

you know, the worst actually type of reversals where you reverse within like

week, you reverse on both sides.

So a lot of whipsaws right here.

Stephen was asking to go through some of the significant bar definitions.

Well, if we look at the last commitment to the downside, we also would want to

take the high of that bar and see where commitment to the upside would come.

So it looks more clearly on NASDAQ where we see that commitment above that last

significant bar to the downside.

And this is where we... we'd be thinking this was a true reversal.

And that's why it's so confusing today.

Because today, it's kind of committing to the downside, depending on the index

itself.

So it's a really frustrating market in the way

of how volatility quickly comes. And a lot of things just quickly become the

opposite.

So usually during this type of volatility, the best way is just to stay

to have a lot of your equity in cash.

So for instance, I'm kind of even enjoying not trading as

actively lately with all of what is going on and just being more selective,

trying to make sure that there are a lot of confirmations into the trades that I

enter.

And usually these type of environments are either going to be around the

of character, which we yet to see to the downside in a much bigger, large way.

And obviously that change of character would most definitely come and be

considered valid if we have the break of the previous support level.

That's what the bearish camp is waiting for, and that's what we are waiting for,

for that confirmation.

Again, October 10th, that meeting, I think that we're going to have more

volatility tomorrow.

And I think tomorrow is going to define how, you know, Thursday is going to

unfold. Having said this, you know, looks like a very dangerous day with the

increased supply signature.

But yet, we stopped above the higher low. So, again, we just need to see,

we reverse?

Or are we just going to continue to the downside?

Look at oil, guys.

Also very interesting. We're at the level of the support.

And then look what happens.

As if this is the test of the previous lows.

Then we have a smaller test.

And as the price was going down, there is really not a lot of supply.

So there's not a lot of selling here going into the support into the higher

The only selling that came was on two bars as upthrust bars.

Gold, we are in the trading range and I probably would be thinking that we're

not in this trading range.

We were in the distributional pattern and then we had a change

of character.

So this change of character defines

the range itself and we could see that maybe there is some kind of slope to it.

So something like this.

But definitely, even though supply has come, there's not really a

lot of supply that we're seeing later on. So this is a bullish sign.

And here, you know, on this test, if the market would start to collapse,

obviously, you know, we would have a breakout right here and this could be a

really nice swing trade.

Bitcoin, we commented about this move before it

happened, saying that such an activity by this CEO will bring

a washout.

on a lot of momentum and a big volume signature happened exactly that way so

that was awesome and then looking at vix yeah we're definitely

in the um hatch territory at this point um there is some volume associated with

those hedges um so if the

if we're gonna have a leg to the downside

I think it should happen probably, you know, this week, and it should be

associated with the Thursday catalyst, with the tariff stocks.

Although historically, every time they met, everything was okay. There was some

kind of positive result, and only after some time, you know, they would

have some kind of deterioration. So we'll have to see. I'm so kind of like

and tired of...

calling what could happen with those talks.

So I just want to really just see what's gonna happen and then just to go from

there.

Let me see what kind of thoughts you guys have.

Based on Numbers and structure, the market is still in a trading range. I

it's important not to be biased by one -day price action.

It's important to watch the follow -up action that comes from Rami. Yes, I

totally agree. We have to wait for that confirmation, so that's great.

I think we are in a bear trading range with sensitivity to uncertainty and some

buybacks may have temporary upside rally.

Yeah, we can. We definitely could have a rally here from this point if

yesterday's low holds and if the low of four days ago will

hold as well.

Still, on the intermediate long -term picture, we are not in the bearish

We're not in a bear trend.

We're still in the uptrend, and we need to change that first in order for us to

start talking about, you know, being in the bear market but today's action

produced one more step to that idea much closer to

the confirmation not much closer but closer to the confirmation

france is asking does gold have a distributional bearish bias france

i don't see that yet

just looking again at the supply that has come so here and

then supply that has come on the way up here here

and then here these were profit taken by value

investors I was one of them I took some profit here and I actually opened the

hedge but then whatever supply comes in it's not as big

and the next reaction has that supply diminution

again so i don't see distributional supply yet

and that's why i'm thinking that you know big positions in gold

are still there

Eric is asking, isn't China buying all the gold?

Well, yeah, if you guys are regular WMD subscribers,

you know, I've talked about central banks buying a lot of gold. And it's not

just China. Throughout the whole world, the banks are buying gold.

And that's what sustains this rally.

Okay, great.

All right, let's talk about effort versus result and specifically the

synchronicity. So what is it, the synchronicity, the concept of the

synchronicity? Not necessarily, you know, an original concept from the

trading course that he created himself or from the SMI. This is something

that came out of the WTC.

In a way, it's kind of like an ease of movement in the direction of the effort.

So usually when we talk about the ease of movement, we usually would say that

there is diminished effort characteristic against the result that

And because the result is expending, we would say that there is a progression in

the direction of the buyers.

the effort is really, really small.

So with that small effort, there is an ease of movement as to how price moves

and commits to the new highs or new lows.

So that would be out of sync.

Synchronicity usually is going to be either

increasing effort increasing result or it's going to be diminishing effort

diminishing result that's where synchronicity is and you know we would

judging the character of that synchronicity as well

because synchronicity by itself if you think about this why are we thinking

about synchronicity why is it so important well we want to see

that whatever demand that comes in on the rally is capable of producing

a significant rally with significant momentum.

And when we don't have that, that means that there is some availability of the

supply on this rally.

And that's why we might have larger reactions, stopping actions, and so on

so forth.

All right, well, let's look at this example, and this is an exercise by

So it works as a bias exercise, so we have to figure out what the bias is,

and hopefully I'm going to have a volunteer today, so please say yes.

I want you to go through the chart and kind of give us an idea of the bias

that you might have here.

And then we'll talk about the synchronicity and specifically how that

synchronicity starts to develop.

So let me know, guys, anyone who wants to step in, volunteer, say yes.

All right, let's go to Dimitri.

Hi, Dimitri. How are you doing?

Hey, can you hear me?

Yes.

All right, great. So I'm going to ask you a general question first, and I want

you to give me your first impression.

And then we're going to go into more detailed analysis. So my first question

you is, what do you think the bias of this chart is?

Give me your first impression. It doesn't really matter.

The entire chart?

Well, what is your bias on the last bar?

What do you think is going to be the next significant move, to the upside or

the downside?

I think it will be to the downside.

Okay, so now that we have that general sense, now I want to ask you more

detailed questions. So, Dmitry, why don't you tell us the whole story of

you see here.

As to how do you come up with these buys, you know, the downside buys?

Well, just really quickly, I noticed that we had a reaccumulation range from

March to September and then a markup phase till mid

-November.

And then here is what I thought is the beginning of distribution.

So essentially, the first thing I saw, I mean, if I had to answer right away, I

saw the lower highs towards the end of the range here.

Okay. So LPS -wise, in my mind, I

saw some

sort of upthrust action.

mid -February or yeah yeah so

like a mini distribution range right there now

for the volume towards the end I do see you know

going from June to you know some somewhere right like June to

like July ish I see what it looks like an increase in synchronicity between

effort to the downside and result to the downside.

So I saw that. I also saw that, you know, if you look at the previous swing

from, you know, April,

May, right there, you know, so I see an increasing spread to the downside. I

see increasing volume.

while those spreads to the downside increase.

So all I see here right now is from first reaction is just a synchronicity

to the downside.

Synchronicity between the effort and the result to the downside.

Could you walk us through, if you think that this is a distribution, could you

walk us through?

the price action and identify the points where the big interests have sold their

position, if this is a distribution?

Yeah, I mean, I would say maybe... Where do you think was the first sale, first

significant sale?

Mid -November, that big volume spike right in the beginning of November,

there.

So that's probably, in my opinion, where the CO would be getting out.

And then right before December, right on December, I

also see a big spike. I wasn't able to see exactly which bar that is.

A couple of us, yeah.

Not a huge.

you know, not a huge spread for such a high volume.

So that is interesting to note.

Well, and look how it stops here. So what does that suggest, Mitri?

Suggest that some demand came in.

Some demand is here, and that's what stops this price from going further

Okay. Well, we just want to identify, you know, points of selling. So

here, here.

There's some selling on the way down, but it's probably closer to, you know,

this being a weekend.

Okay, so where's the next selling?

Sometime in January, I see another high volume bar.

Yeah, right there.

Probably some event at a gap up.

So that's some liquidation.

for the CEO if this is distribution.

And then also in late February, another large volume spike.

And I think that, you know, produced a rally down.

Okay. I would also say probably this bar so that we wouldn't miss it. Look at

this. Yes.

Agreed. Yeah. So it's like.

strength they're selling, strength they're selling, strength they're

And it's so interesting, you know, talking about synchronicity. Look how

synchronicity develops.

The first sale does not stop the price from moving further

up, but it really deteriorates the quality of the demand. Because on the

push up, We only have a very marginal commitment to the upside, and still some

supply comes in.

So in both cases, demand is going down and supply is going down.

Well, what is going to win?

Well, in this case, we see that on the way down, supply is increasing, and then

there is an increase in the downward result.

And that's the synchronicity that Dimitri was talking about.

Okay. What is the next time when they sold?

Mid -April. I see some selling there.

Okay. Yes.

Definitely around this area right here.

So somewhere here. Next one.

Next one. I see two volumes spike. Well, I would say the

selling from the CEO or the institutional trend followers probably.

Later in May, that big, actually the highest volume spike on this chart.

Yeah, definitely into the strength.

Yeah. They're selling into the strength. We see how it has some demand behind

it. It pushes the price even higher, but there is not a lot of buyers after

that.

Yeah, and it produces the lower high.

probably this bar right here as well has some selling some synchronicity there

there is some selling here also on the way down not necessarily at the end of

this reaction but still at the beginning so we're seeing how there is the top

information is being based um on uh the selling by the co

okay well um

Where else? Let's conclude this.

What is the next point of selling?

I see some selling, well, in hindsight, but I see some selling right in the

beginning of June right there, yeah.

Yes, okay.

And by the way, let me just kind of challenge that statement a little bit.

In hindsight, you see some selling.

Dimitri, I think that...

What you're seeing here is not in hindsight because majority of the people

will not see that the selling has occurred there.

So don't worry about that.

We are uncovering not the hindsight. We are uncovering

the knowledge in the chart here. So that's totally fine.

Okay, so what is the next point where we see the selling?

Well, yeah, to your point, Ramon, actually, if I had gone through the

range and that last bar was the last bar I saw and you asked me if that was

buying or selling, I would probably say selling. So I do agree with you.

And then, you know, as we go down right after that bar, we can see increase in

volume, increase in selling, prices going to the downside, increase, you

increase spread.

Some demand probably here at the end of this reaction, right? Right. A little

bit of demand, yeah, maybe some mean reversion trade.

Okay. And then as the mean reversion trade happens, so we are in the oversold

condition here, how would we label this low, Dimitri?

I would say this looks like a major sign of weakness to me. Okay.

And major sign of weakness is always going to be associated for us with that

short -term oversold condition, just because it's a deviation from the mean

the trading range.

So therefore, such a strong deviation away from that mean will produce that

oversold condition. So some value is going to be found by some institutions.

They're going to come into this position.

And we see that demand comes in.

Okay, Dimitri, let's just finish this.

Where is the next sell -in that you see?

Mid -July, I would say, as well.

Yeah, well, there's a demand tail there, but if the CEO is still

trying to get rid of the last portion of his position, I would consider it

selling. Well, and think about the intraday for this bar.

Walk us through this intraday action.

So from the previous close, what does this bar do?

So it opens and then it goes down.

Opens where?

At the pin level of the close, below or above.

Okay, so if the close is there, it's way above, it gaps up.

So we see that gap. Do you guys see this? This tail comes later.

So there is a gap first, and then after that, most likely we have

selling. Yeah, selling fills the gap.

Okay, so supply increases, and that's why we're selling. Why is there some

selling on this bar? That's why.

Because on the intraday basis, we're going to have that initial selling, and

only then the price will recover and close like this.

I see. So it's kind of like, I don't want to say fake demand, but

it's not the CEO smart demand there.

And see, the problem here is that this fake demand, this weak hands demand,

because of the institutional signature of it, sometimes will look as a strong

demand. And obviously, this attracts other weak hands.

So you need to see what kind of continuation we're going to have here,

obviously that continuation does not have a most bullish character.

Okay, well, Dmitry, I think this is a very compelling story here as the way

selling happens, and look how selling happens.

It happens into the strength first.

Then the next element is going to be synchronicity. This is where they were

selling, selling, so selling, selling increases,

and then once the selling increases, this is where synchronicity happens.

After the initial synchronicity, we have a lot of failures, low highs, as

Dimitri has mentioned, so the quality of the rallies is diminishing.

whether by the character or by the intention of what needs to be achieved.

And then with the increase of the supply signature, there is more synchronicity

to the downside.

So this seems to be like a very gradual way of how change happens from a

very bullish view into a bearish view.

And we see how the forces are acting, stopping action.

Another stopping action, series of stopping actions.

Finally, that stopping action produces synchronicity, deterioration in

character, deterioration in the intent, ease of movement to the downside, and

so on and so forth.

How is this trading range, Dimitri, different than the one that we've seen

before here on this chart?

Because I see the same increase of the supply. I see the volatility to the

downside. What is different?

The synchronicity. So the first thing that pops out on me on the

is, at first glance, it looks like the swings down get smaller and smaller in

size, while on the distribution the swings down are getting bigger and

size. That's just the knee -jerk reaction, first thing I notice.

Yeah.

Absolutely. This is that effort versus result concept, which is extremely

important. And Dimitri is just picking it up here so nicely.

We have a diminished result to the downside on the increased effort.

So there is a push to the downside.

The market participants are trying to sell so that the price would collapse,

it doesn't.

And then we could go even into the character of the movement. We could say,

yeah, the volatility increased somewhere here, but then look at the next

reaction.

Such a laborious move to the downside, which suggests that the selling is not

that aggressive. And that has been confirmed by the volume signature

Where we're going into the late stage of that reaction, that actually suggests

that some demand is here.

And then obviously this acts as a confirmation.

This acts as a point of the entry on the way up. And Dimitri, absolutely

correct. Look at how volatility increases and the result increases to

downside. This is a different range, a different structure.

Okay, well, Dimitri, really good job.

Here is the result. This was JCPenney.

And let me just go through this really quickly. I want to introduce this

concept. And, Dimitri, I want to see if you have any questions because...

You were talking about the synchronicity and, you know, how we could use that.

So look into this range right here.

What happens first?

First bar, we have some selling.

This is where a stopping supply comes, right? It's that value supply. So a

value investor is going to sell into the strands of weak hands.

And it's very difficult to decipher it right away.

We only could make that conclusion that there is some selling just based on the

spike itself at that time.

So we know that the volume has increased. That has an automatic

the increase of the supply.

Then we have to look at the result.

And that's the key.

We have to have that logical sequence.

What is the result? We're looking for the test.

The test was not that bearish at all. So supply has come in, and the test was

okay. So we're expecting a continuation.

All right, so we're continuing with that uptrend, and then again, supply

comes. In this case, supply is present, but it definitely diminishes.

on that bar, as well as demand is diminishing as well.

And think about why, why this happens. Why would both supply and demand

on that second bar? Well, it does so because of this bar, because of this

original bar number zero or bar number one here.

Why is that? Because on this bar, we have both increase of the demand and

increase of the supply.

So sellers have sold and buyers have bought.

And they've established their positions.

And once they're in their positions, what are they going to do? They're just

going to wait and see what's going to happen.

So there is less buying and less

selling at the same time on this bar. And that's why that signature goes down.

I hope that makes sense.

Yet, we see that by the result of this bar, demand still is winning.

So kind of like, again, multi -layer thinking here about the character

of the demand and supply and the result that happens, even though both are

diminishing supply and demand, but still.

you know demand is still winning suggesting a continuation or at least an

attempt an attempt happens and then we're seeing how demand deteriorated

completely and then supply comes in and on that supply finally

we are not just stopping the price from moving further up for the first time

we are actually pushing the price down and that's when synchronicity starts to

occur it's when

Supply is increasing. It's not like it didn't increase here or here. It did,

it produces a different type of result.

This is the first time when the result is to the downside and not just a

stopping result like we had here or here or here.

Does that make sense, Dmitry?

Yeah. Okay, so and then we are looking for this type of synchronicity bars.

Let's walk further.

So for instance, when we go into, and I think I need to change a couple of bars

here. Like when we go into this action right here, let me change this right

away. I don't want to confuse you guys.

Okay.

I think this red bar should be here.

Okay, why?

Because we see how that supply comes in.

So we see how supply comes in, and that's first stopping supply.

Demand is resistant and still pushes the price up, but all of this tails in the

increase. in the volume signature suggests that supply is present. Plus,

about where it happens, right? So if we've had all of this supply coming in

this level, institutional participants are going to be looking into this zone

to sell again.

And here is that selling into this trend.

Then what happens next?

The next time there is a push to the upside,

there's gonna be lesser demand and lesser supply.

And here, actually, there is more supply.

So probably not the very best depiction here.

But what we're looking for is we're looking for that increase of the effort,

increase of the effort, and then increase of the result after we had that

potential stop in action.

So that traffic light always should be

Value selling, then deterioration of

supply and demand, and then synchronicity of effort with the

result.

And it makes a lot of sense to me, at least from kind of like a physics point

view, because, you know, again, I'm just trying to figure out what would be the

best analog.

for this type of action. So you guys tell me.

Some kind of two bodies that have different type of math and velocity.

One is uptrend and one is selling that comes into this

uptrend. They collide at this point.

What happens?

Because uptrend has a lot of velocity and momentum, it's still gonna continue

its move to the upside.

But now this velocity and momentum is going to decrease.

And it's not going to be the same.

Because the effort that was spent on pushing this bar has

been out in the world right there.

And these buyers are not necessarily going to be buying on this bar.

So there's going to be a deterioration of the buying after such a big effort.

At the same time, sellers have produced the same action. They've exuded their

effort to stop the price.

It didn't stop, but it doesn't move anymore the same way. Yet, the sellers

in their own way exhausted, deteriorated at this point.

And they are waiting for the price to start crumbling.

And when more selling comes, that's when we see this type of action.

Actually, this bar right here probably suggested that that's what we're gonna

have here.

Okay, well let's see if we could have that type of confirmation again.

And by the way, what do we have after we have that synchronicity?

Ease of movement.

Because once the effort increased and the result increased, after that, demand

is exhausted and the price could move to the downside with less supply.

For instance, on this bar right here, we could see how the supply signature

actually diminishes relative to the synchronicity bar.

So there is an ease of movement to the downside just because of what preceded

it.

How supply has emerged, stopped, the uptrend, then

showed synchronicity, and then it doesn't require additional selling.

And the price just goes down.

and we could see how the price goes down and the volume goes down, and that by

itself suggests deterioration of selling and suggests some kind of rally.

Okay, let's look at this again.

So we see in value selling, a increase of synchronicity, ease

of movement.

Look again how supply diminishes relative to the effort that came off the

and the price moves easily to the downside let's look at this again value

selling into the strength of the weekends another attempt

to go up in this case very clearly both demand and supply exhausted

synchronicity where effort increases and then uh the

result follows and then after that Supply decreases, but yet we're still

down.

Same pattern, repeats over and over again, right?

Let's look at this again.

So Dimitri was going through this bar right here, saying that on the intraday

basis we looked at this, there was some selling.

Okay, then selling and buying are exhausted, actually in this whole area

here. And then as selling increases, we see that bar that moves to the downside

now more easily. And then when selling starts to decrease and the price still

moves, that's an ease of movement.

By itself, if you think about this as a concept, as a system, you could

create a swing reversal system out of that.

keep noticing those type of bars. So if you could identify those type of bars,

so for instance, here we could, at the beginning of phase A, we would see kind

of like the same type of picture, right? So we could see this, okay, so

this bar, this bar, then this bar, something like this.

So all of those, in all of these instances,

you know, this pattern of how first supply stops the movement, then it

exhausts the demand and supply, then there is a synchronicity to the

then there is an ease of movement.

Every time happens this way. Think also about synchronicity in different terms.

Think about the synchronicity in terms of the phases that

you might have. So here,

We are identifying this as a reaccumulation pattern,

which

is followed by the rally, and then we have a small distributional range right

here. Then we have a change of character, and then the

distributional pattern starts.

For the first time, there is synchronicity to the downside, failure

rallies for the first time.

with the lower highs and then our potential phase C, phase D, I

would probably put phase A here, phase B.

Now think about the traffic light that I'm showing you here and think about all

of these elements.

The first phase with its intention to stop the price from moving further up

means that there is some

selling into climactic run and

that's a value selling okay so

we see that in this area right here we see this in this area right here then

what do we have we have a presence of the supply we have demand but it's less

And we have diminishing demand as well. So in both cases, both efforts are going

to be diminished.

They're just exhausted by this war. They're exhausted by this collision that

has opposite energy on both sides, and it's just going to be

kind of like a blur. Nothing's going to happen. There's going to be failures on

the upside. There's going to be failures on the downside.

And then suddenly after phase C, this is where synchronicity is going to pick

up. This is where usually going into the major sign of weakness, we're going to

see an increase in the volume signature.

So effort is increasing.

And then on the major sign of weakness, we're going to have an increase in the

result as well. So it's that third step where effort to the downside increases,

supply increasing, and demand is starting to decrease.

Synchronicity happens.

And then after that, phase E is going to be an ease of movement.

Phase E does not require a lot of volume signature. This is where the price

could just move easily.

You could think about the synchronicity in terms of the phases as well.

All right, Dmitry, questions, comments?

Oh, man, the whole time you were explaining this, I was loving the

parallel. I was just thinking about, you know, if you throw a ball into the air

really strong, the ball will go up, but it doesn't stop right away.

It slowly, the velocity slowly starts to, you know, decrease.

Gravity hits it. This is great.

Gravity is pushing down, so it's kind of like the phases here. Yes.

This applies like the gravity.

Excellent, excellent.

So with my content team, I was discussing this concept because we were

about what are the easier analogs for us to use in classes in order for us, you

know, to teach this concept better.

A cannonball, right, or what Dimitri has said, you know, also just throwing the

ball, right, would have the same type of mechanics.

where initially the momentum is gonna accelerate to a certain point, then

there's gonna be a deterioration of the momentum, and then the slope is gonna

start changing, right? So we kind of in this change of behavior,

then we are in the distributional pattern, then we are in the

emerging downtrend.

And then we are in the markup.

And please note that in the markup, there's going to be acceleration to the

downside at the end where the ball is going to fall.

This is going to be physics at its best because the gravity and, you know,

depending on the mass is going to define, you know, the increase of

increase of the momentum before it hits the ground.

So all of the physics here work.

in this price cycle.

So I had an idea of this, the idea of just to look into the physics or the

mechanics or the math of the ball throwing or like a cannonball. So if

knows, you know, that math, you know, please let me know. Let's look into

I'm very curious about that.

Eric is saying here, I'm thinking of a spacecraft with a thruster.

after demand and a thrust of four, or AFT demand and a thrust of

four supply.

Volume is fuel, result is price movement.

This could be, it's probably a little bit more complicated, Eric, in terms of,

you know, how to explain this to people, but I see where you're going with that.

I think that the analogy of how we throw the ball, the specific trajectory, the

force that we're applying that... resolves into a momentum increase

and identifying where momentum actually stops those are crucial things in

identification of the final uh effect that we could have

yeah so dimitri if you can come up with um you know something

you know like formulas for that that would be very interesting Yeah, velocity

equals mass times acceleration, right? I'm sure there's something we could do

with that here.

Yeah, something like that. And I would even say, I'm going to show you guys,

there's really nothing for me to hide here. If somebody could produce this for

us, that would be even good.

For instance, when we look into the first initial...

throw of the ball let's call it this way right so here where it starts and look

at the momentum the strength with which the ball is being thrown this

how much did we travel okay well we traveled this much

next throw this so there is a little bit more momentum here

and that's how we would be looking at this

And we're probably looking at this and we're comparing it to each other.

But I wonder if, you know, we could measure the momentum and measure the

result and measure also the effort behind it. So effort, momentum,

result. And somehow make a projection as to where the

price is going to lose that momentum. So for instance.

At this point of time, there's going to be a loss of momentum, like at $8.

So anything above $8 is of no interest to us once these two rallies have

happened. That's kind of like an idea to develop, looking at how initial push

could sustain the trend.

All right. Well, Dmitry, anything else? Any last thoughts?

No, I love that.

I'm going to try to think of a way I can program that.

Yeah. Yeah. And please bring this to us. Email me. I would love to look at that.

All right. Great.

Thank you, Dmitry. That was great.

Thank you. Bye.

All right.

Let's go to the next chart.

Okay. So we have another.

exercise on synchronicity and i'm thinking why don't we do it next time

don't we in the last this half hour that we have left why don't we jump into the

next exercise uh action sequence so i'm gonna stop showing my screen for a

second okay

here we are you should see my screen if you don't let me know so here is

our action sequence on price and volume exercise and here obviously you know uh

if you guys would like to volunteer let's do that as well

so let me know

let

me know if you want to step in here

All right, let's go to Rick.

Hi,

Rick, how are you doing?

Hello, can you hear me?

Yes.

How are you doing today? Okay, good.

Yeah.

All right,

Rick, let's look at this chart. So this is the first chart of the action

sequence exercise that we're going to have.

Somewhat of a recent IPO, I must say.

We are starting at $14, and here is the action for the first, what, the

first maybe like six months or so, less so.

Rick, how would we approach this?

How would we analyze this? I mean, this is just a new stock that came to the

market. What would be our assumption here?

as to the bias, the next significant bias?

Well, I think I would look at the significant

bars and the volume as we're going through this chart and then

go from there.

Okay, great.

Well, walk us through this. I mean, up to the last bar.

You know, what is the story here?

I think I would.

So we have an initial IPO and it's a lot of volume and to the

upside.

And then, yeah,

that bar right then, that bar looks like supply comes in and does a stop.

And then we have reduced volume.

And then all of a sudden we've got... Rick, what does it tell us about the

supply? You said reduced volume.

What does it tell us about the supply?

Is supply increasing or decreasing? I would say

supply is decreasing.

Yeah, absolutely.

Actually, both. Prices decrease.

Yeah, and the price is decreasing.

Supply is decreasing, so effort to the downside is decreasing.

The price is decreasing as well.

But the character of the price decrease that we could observe is what,

Rick? How does the price decrease? We've got narrow

spread, and it's just meandering on down.

Yes. So look at how through all of these three parts of the reaction, the spread

is diminishing.

So that's a bullish characteristic because it just basically tells us that

is less selling, there is less selling, there is less selling. Where was the

most selling?

Here and here.

Then the most selling was on the next two bars, here.

Then the most selling was on this bar.

Then the most selling was on these bars.

Then the most selling was somewhere here on these bars. And look how low

of a selling that is.

So it just basically tells us that I'm ready to go up. There is no selling.

And then it jumps.

Okay.

Rick, let me ask you this question.

So if I would look at the whole chart, And I would try to create some kind of

picture for a composite man actions, composite

operator actions.

You kind of alluded to the fact that the price went up here on the volume

increase. So I would think that this is institutional buying right off the gate.

Then what is this? I would agree.

What is the next chunk of volume signal?

That would be some, I think that's more value buying.

Okay. Again. Some more buying, maybe even trend following buying, you know,

breaks out, out of the trading range. But we have institutional buying here,

we have institutional buying here.

What does it tell you, Rick, about their buying?

I mean, they're not waiting for a prolonged trading range.

They're just buying on the way up. So what does it tell you about their

That means they're trying to get in, and they're trying to get in fast.

Yeah.

So they're accumulating. Yeah. So there is an accumulation

on the way up.

There is some urgency behind this buying.

So they want to get into this position. They don't want to even, you know, to

allow the trading range to unfold.

Or maybe this is just the initial buying that has kind of like this. Oh, my

gosh, this is such a hot IPO.

So you got to buy. You have to be in this IPO because initial move is going

be there. And it is.

OK, great.

So then we have this story for the first maybe three segments. One.

two, and three.

Now I want to look at the next segment. The next segment looks like a trading

range to me, which I'm going to divide into different portions as well.

Here is a section number one.

And here is a section number two.

All right, so how would we characterize

the whole trading range relative to what the price is doing and relative to what

the volume signature is doing first.

All right. Well, I would say in Section 1 that there is some accumulation on the

way up. In Section 2, I would say that institutions are inactive. They've

got their position.

Okay, and I would probably say that throughout this whole area right here,

they're becoming more and more inactive. They got in into their position here,

then here, then some late institutions are getting on the way up. We could see

that from the volume signature, but the major institutions got in on the first

legs up.

And then because the...

you know there is the deterioration in the momentum in the volume in buying

itself we are expecting some kind of reaction and we need to see on this

reaction what would the ceo do what would the actions of the ceo all right

here is the action of the ceo

it's inactive

there's nothing that's going on there

So we know that long -term interests are in and they're not out, but there is

some kind of deterioration because of their inactivity.

What can we expect from here?

If the CO is inactive, what would the price do?

I think you might just continue it.

Let me ask you in a different way. Hold on a second. This could be a good, you

know, learning moment.

Okay, go ahead.

Think about the cannon, right?

And think about the cannonball, right? So, first momentum to the upside.

Where is that moment?

It's right here.

and then here, right? So this is that momentum. This is where they're shooting

it out.

Then what happens? It goes up a little bit because momentum is still there, but

momentum starts to deteriorate. Where is that moment?

Right here.

And then it starts to deteriorate, right? So it goes into like a trading

Here's that moment right here.

So what's the next kind of step?

If the CO is not going to step in and not going to have another cannon

here at the higher price where there is another

cannon short.

So if that's not going to happen, we're not going to have a reaccumulation.

We're most likely just going to collapse.

If there is not enough strength here to support that.

Yeah, weak hands are going to start capitulating.

Let me just explain. This is very important. So let me just kind of like

this again.

Right, thanks.

So Canon, increase of the momentum, deterioration of the momentum,

trading range. And here.

We are going to have either the support, so once the price starts to

deteriorate, would we have another momentum here by institutional buying?

So institutional buying.

If they're there, this produces this short -term oversold condition.

buying by institutions, momentum increase, and sustainability of the

We'll talk about this in different specials throughout this fall season.

Another push, another cannon, deterioration of the momentum,

trading range, deterioration of the price.

Are they going to buy it or not? Let's imagine they...

bought it again, but this time maybe it was the, you know, the cannon was not

that great. The cannon was smaller.

So the momentum brings us up to the new high.

And then again, there is a deterioration.

Trading range.

And then finally, there is no support. So the price is just going to collapse.

What does it do? What's the most important here?

The understanding is that that's what creates trends.

Institutions create trends.

They create trends by their buying.

They are buying not always.

They are buying at the most opportunistic times.

They are buying in different ways.

But in the trend, their buying is going to be as in the trading range in the

areas of value.

those are going to be oversold conditions.

As they buy, they bring a lot of volume signature.

So that's what creates that push and the momentum, and the price usually starts

traveling faster.

But then once they're done, momentum is going to fade, and conventional

technical analysis is going to say, okay, well, we're expecting some kind of

reaction.

We are thinking...

We're going to have a reaction. What kind of character of the reaction are we

going to have? Are we going to have a trading range, deterioration of price

recovery, or is it going to be a downtrend?

This is like the basic concept of how the trends are created and how the

are being sustained throughout the whole price cycle.

Okay.

All right. So, Rick, what are we expecting here then?

We are kind of in that price cycle. You know, we are here. We are in this

trading range, and then there is like this short -term deterioration. So our

question here, would we go up or would we collapse?

Well, it looks like that's a pretty significant gap down, and we've got a

tail and lots of volume.

I would say we're headed lower.

Okay.

Let's ask the class really quickly. What do you guys think?

Where are we going from this?

We're at a very, very interesting spot here.

There's a lot of bullish characteristics.

It did hold support there, so it did not break lower.

It did not break lower, but it could.

Right, so I'm just showing you the chart.

Good.

Okay, let's just see what you guys are thinking.

Dmitry is saying higher.

Beginning of another cannonball higher happening, okay.

Closed above, it's open. Yeah, I would say that this last bar actually looks

somewhat bullish in a way of how the result is unfolding because it doesn't

commit below 38.

It has a lot of volume signature behind it, so there is some demand behind it

for sure.

Well, what else, guys? What do you guys think?

I'm only seeing Dmitry answering, okay.

That's another good point here for Dmitry Value Zone for the CEO

Okay, so let's think about this.

We had some supply here. We had some supply here.

So most likely we are thinking about these two bars, and especially this

bar is our value zone.

So we're thinking probably this is the zone where the price could potentially

come back, and they're going to have some buys again. So probably

slightly below 34, so we still have some room.

Okay, what else? No one else is answering. Okay, let's see, Rick, what's

to happen next.

Here we go.

So we were on this bar right here.

Okay, well, interesting, right? We've talked about the value zone.

So it went right into this value zone right here.

We could be expecting some kind of reversal there. We did reverse.

First question that I have is, what is the character of this down move?

I would say maybe just change of behavior.

Okay. And then we get to that

significant bar, and then we start going

into higher lows.

Okay. So let's forget for now for the higher lows. Let's concentrate on the

reaction. Okay.

What is the character of the reaction? So when we talk about the character, we

want to look at the spread.

We want to look at the volume signature.

And we want to look at the intention.

Okay, so spread is decreasing, right? So look at this spread to the downside.

I mean, is this an aggressive selling?

Definitely not.

Aggressive selling is this, this.

This is the only aggressive selling that we see on this chart. Everything else

and this right here. Everything else is kind of like mediocre.

So therefore, we're thinking that, yes, we are in the reaction, but this is a

bullish kind of character reaction that we're seeing, which is very interesting,

okay? And we come into the value zone.

So, you know, something, it's not like there are aggressive buyers here, but

there is some demand that is smaller demand that comes in.

and produces some kind of stop in action.

And then this bar that Rick has mentioned, this big up bar, it's not

a big volume signature. I mean, look at this volume signature. It's so dismal.

But it produces a really good result and then commits above the last three bars

here. So this is an ease of movement type of bar.

where we have diminishing effort characteristics but yet increasing

characteristics.

And that suggests that there is some kind of change of behavior that is

happening. Okay, great. So now, Rick, now that we have this change of behavior

and we have higher highs, higher lows, as you've mentioned, what about the

overall picture?

I mean, are we still in a bullish pattern long -term or in a bearish

I think we're still bullish.

Okay, well, long term, look at this.

High of lows, right?

And a high of high.

So we are in the definition of an uptrend.

We are in the short term, in the intermediate term, we are probably in

trading range.

And short -term, we are in the upswing.

So this is where we are, long -term uptrend, intermediate trading range,

-term upswing. Let's look at the intermediate a little bit better.

Let's look at the trading range itself.

What are the boundaries of the range? How would you draw the boundaries of the

range, Rick?

Probably buying climax on November 13th.

Yeah, I would do the same. Yeah.

Okay. Okay.

What's next? If this is the buying climax, then... Yeah,

the automatic reaction. Okay, and then this high? Secondary test.

Yep,

secondary test and phase A.

Yeah, so here are our boundaries of the range.

Phase A, B, B, and I would even look at this maybe even slightly

differently, but that's fine. Let's just go with this labeling, and then we'll

look at the alternative labeling.

Okay, so then what is this level then?

That would be a...

Test number two.

Okay. So first test comes in phase A.

Second test comes in phase B. So there are two tests that we have here.

Number two. So this seems like maybe like test number three could be a

potential. Yeah.

But we have to think about what's going to happen next year short term.

So from this picture right now, we have to define.

Are we going down from here?

And if we do, then this is not phase C. Or are we going up from here? Then this

could be a potential phase C.

Could we decipher from this latest April -May price action what this is?

It looks to me that it's going to come and maybe test that 30.

four level because there's lots of demand tails and a higher low. And

then we've got some strength there with those push to commit

to the upside above 38, I guess, that local

high.

And so I would say.

maybe back up to 34 and then make a commitment to the upside. Okay, great.

the upside, what else is important here for us to see with all of these volumes

is a movement suggesting that the selling is exhausted. We kind of see

the spread to the downside.

First attempt to commit to the upside has that supply characteristic, and it

takes us down.

It takes us down like this, but it doesn't produce a low low.

It's actually producing a high low. So next time something like this comes, we

have to pay attention to this level. Could we overcome the level of supply at

34, 36, when in the middle of April we had a stop in

action?

Okay, well, next time it comes here, and we could see that, wow, the effort.

has the same type of signature.

The result has the same type of signature where there is an attempt to

out. Volume is expanding.

And then there is a reaction to the downside.

So this is a very interesting spot.

Rick, I wonder if we could together kind of like decipher

this.

Effort is increasing.

And yet result is doing what?

An effort to the downside, obviously.

So result to the downside is doing what?

It's decreasing.

It's decreasing, yes, because we would have to commit below this support level

in order for us to say that emerging supply has actually the force

behind it.

And it doesn't.

Even the bar that has this tail, the close of this bar suggests that we've

come back to the value zone really quickly.

And that tells us that no matter how much effort has come, demand was of such

good quality that it observed all of the supply at this point.

To confirm that, we need to see what happens next. And we see that the test

horizontal, not vertical.

and it doesn't go anywhere and it creates another high or low on the

volume characteristic.

So this makes a lot of sense.

Now the most important thing comes.

How do we define that maybe next time when this happens?

Because Rick has said that the price should go to 34, create another high or

low, and then break out.

So at this point, somewhere here, we're going to have a repeat of this action.

But we need to look at the third time when it happened and kind of decide

whether the supply is increasing or supply is decreasing and being absorbed.

So what do you think, Rick?

At the third instance, do we have a much easier absorption of the supply or

harder?

Easier absorption of the supply.

Okay, why is that?

Because in instance number two, we had the bar

closed pretty much at the lower end of the range, and also in instance

one. Which bar are you talking about? The big red bar, number two.

So it's closed, yeah.

And also on number one, it did the same. But on number three, we have narrow

ranges, and we have a little bit of demand that's kind of hanging there,

maybe. Okay. But not much volume, I see.

I like all of this. Yes, I like all of this. Look at two and

three. Volume signature is the same, yet the close is higher.

The close is higher than number one as well. So number three already, the

bar to the breakout bar has a better result.

And it has it on the same effort signature. So it's more bullish as a

than number two or number one.

And then what Rick has mentioned about the supply, because supply comes at each

point, one and two.

And the supply comes again at three.

But it doesn't have a very strong supply signature like at number

two. And also price -wise, result -wise, this is the most muted reaction.

So it tells us that demand absorbs the supply better.

It also tells us that supply has diminished significantly.

And it also tells us that now result is more bullish.

So we could expect that synchronicity is going to increase, meaning that

there's going to be more demand coming in, and

the result of that is going to expand, right? So more demand, expansion of the

results. What price action could we expect, Rick?

just based on that.

If demand is going to increase and the result is going to increase, yeah, so

we're going to have first rally.

We're going to have probably a better rally than we had here or here.

I'm not sure about this, but probably much better than these two.

That most likely will bring us back to the higher target, so target number one

somewhere here.

There's going to have some kind of momentum characteristics when supply

completely. So maybe in this area right here, we're going to have some increase

of the momentum.

Where do you think supply is going to come?

Where are we going to have resistance on the way up?

We'll have resistance at 52 and at... like 56 to 58

okay and why is that um

well we because we'll be at 52 we'll be coming

up to that level where we had the gap down yeah so that's definitely a okay

resistance level and then we've got that little trading range back in

December of 2018 so you know from yeah so

you know which I guess the high was about 58 or 56 mm -hmm okay

and a bunch of supply here then this bar right here as well so all

of this is gonna kind of produce that you know resistance cluster

Yeah, I would agree. Anything about 40, there's going to be some kind of

hesitation, but probably to 48, 46, 48, there might be a better move

first and then just kind of deterioration or some climactic,

this, and then just some kind of deterioration here. So we'll have to

We could have a trade here, which could be a very short term. I'm just going

from... through 40 would originate that trade.

I think that we could even place the stop loss more aggressively just because

how that supply has been observed and demand is present here. So if the price

after the breakout comes back, I'm sure it's gonna be picked up again by that

demand. So let's just play that and let's see where it takes us.

Okay, and this will be the last chart for today, but let's just see how the

movement has started. So this was the bar that breaks the pattern that we are

currently.

Look at how we are coming in into the area

where we had selling before.

So let me do this.

okay okay so in all of these instances we have some kind of stop

in action we have reactions and stopping

actions just based on where supply has occurred before this is um

And this analysis is a function of a horizontal volume signature.

We're just looking at horizontal volume signature in a different way.

So what we're doing is we're saying on the vertical volume, we see the spike.

want to see where that spike occurred on the chart.

And we're going to say that this volume increase definitely has

increase of the supply behind it.

So whenever the price comes back to this level, we're going to have some kind of

resistance, and we're going to expect that resistance from the supply.

But the beautiful thing about this spot is it gives us a confirmation of

the trend, whether the trend is still sustainable or whether the trend is not

sustainable. So when we produce this type of reaction, we look at the volume

signature. Volume goes down.

And then we look at the reaction itself. Within the trend line, same magnitude

reaction as the previous reaction. There is no changes of character.

Sustainable reaction.

We're expecting a continuation to that.

We're expecting resistance here.

Next reaction, same way.

Next reaction, where supply comes in.

Naturally, we start thinking about...

the same spots where we tried to get out and where we had those spikes

in the supply signature.

So kind of the same.

And we're thinking the same way.

Supply occurs.

We know it had occurred before, so it's natural for the supply to come again at

this point. There is an emotional memory to the market participants that they

have. And it looks climactic, so a lot of even smart hands are going to sell

into that strength.

But we're going to test it, and what is the test showing us?

It's very successful.

It stays above, and the price continues to the upside. So there is that

sustainability of the trend.

So, Rick, what do you think?

All right, Rick, I'm going to disturb you for one more second, and then we'll

finish this.

Okay, so we are committing to the upside here, and this is where

we're going to start next week.

I want you guys to think about this chart, maybe as a homework, just kind of

like do your analysis and tell me what is the next potential bias that

we could have here for this stock.

Rick, really good work.

Thank you, sir. I enjoyed it.

Yes, and I'll talk to you next week.

Let's quickly go through some of the homeworks. So

optional homework, just for us to stay on the same page next week, analyze this

particular slide.

Let me jump.

I'm going to stop showing my screen for a second.

Then next optional homework, I want you to go through this analysis again and

just to think about the synchronicity and how it develops.

Synchronicity does not occur right away.

Synchronicity is going to be developed because there is a lot of force in the

current trend that we usually have, like an uptrend here, and it requires time.

you know to stop this train our trend first and then to develop the

synchronicity of price moving together with the effort so I just want you to

kind of refresh this in your memory and then obviously

anatomy of the trading range of the trade I'm sorry

here you know we have that trade so think about you know how that trade

develop

And then the bias game.

Yes, the bias game.

All right. And these are the, you know, assignments for next week.

Good class. A lot of material today.

So I'm really pleased that, you know, we were extremely active and we went

through a lot of material. So really good work.

The questions that you guys send are phenomenal.

Keep sending me those because there is a lot of truth as we go through the

answers. We're kind of uncovering a lot of great things, so keep doing that.

I'll see you next week, or some of you I'll see you tomorrow at the WMD. And

don't forget about October special starts on Thursday at 3 p .m.

All right, guys, I'll see you then. Thank you, and bye -bye.