All language subtitles for Session 5

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.