All language subtitles for Session 10

Hello everyone, today is November 12th,
and this is our session number 10 of the

Wyckoff Practicum course.

What are we going to do today?

As usual, we're going to go through a
variety of things, and then we're going

conclude our exercise that we started
last time on the selection.

So I'm really happy that, you know, that
exercise...

produces some kind of questions. I would
be surprised if we wouldn't have

questions about that.

That would mean that you guys are not
paying full attention to this and maybe

I'm not emphasizing enough what process
we go through

with this exercise.

So today, let's have a little bit more
focus on that. So I want to go through

everything of what we have really fast
to get to the exercise and then we'll

finish. I also want to...

talk a little bit about the markets
today just in general um

okay let me just see one thing hold on a
second

Okay, so yeah, I want to talk a little
bit about the markets. I think they're

a very interesting spot. I think this is
where we're going to see some kind of

reaction.

So I want to get your thoughts on that
and kind of discuss it, see what we see.

All right, with this, let's start.

As always, everything that we talk about
in this class is for educational

purposes only.

Let's talk about the bias game first.

This was a very interesting one. And I
think that we had 50 -50 on this one

time, right? When I asked you guys, what
do you see here?

A distribution or an accumulation? I
think the class divided into 50 -50.

And then, obviously, I'm receiving all
of the homeworks that you guys send.

I go through all of them. So sometimes
if I don't reply, like today I was a

little bit busy, but I did go through
all of them.

And, you know, if there was a question,
I definitely inserted it into the deck.

Why was it difficult? For those of you
who did not, you know.

guess this correctly.

Could we maybe, and do we know the bias
here?

Yeah, the bias is to the upside.

It's a reaccumulation.

So for those of you who said that it was
a distribution, what was the

difficulty? Or maybe even for those of
you who said that it was reaccumulation,

what was the most difficult part to
identify that would help you out with

bias?

I want to start with that today.

We're kind of going to back engineer a
little bit.

So write it down, please.

What was the most difficult part of the
analysis for this bias game?

Lower highs, lower lows.

Okay, what else?

So kind of like a structure itself, a
little bit downsloping.

Anything else, guys?

The second rally that failed to achieve
the new high.

Okay, so a lower high.

Downslope.

The last three bars were the most
difficult.

Okay. This.

Increase of the supply.

And then we have a reaction. Anything
else?

Because we could just address this three
and I would be really happy about this.

Let's just do that.

Okay, so let's look at the overall
structure.

A downsloping structure, would you
agree?

Yes, absolutely.

And then if you kind of think about the
ways of how

a linear regression channel would behave
on this chart.

Let's think about this just for a
second.

So on the way up, we definitely would
have that channel representing the trend

line, and then the mean is going to be
somewhere here.

Then there is a second portion of this
chart that is going down here before we

have the rally, right? So we probably
would have then the regression channel

like this.

Then obviously there's gonna be
something to the upside as a trend of

the upswing is up.

And then this last portion, if you take,
let's say,

this part right here and include the
previous reaction,

then you're probably looking at
something like this at that point.

So you could see that this trading range
that is

up there to the right is actually
residing

on the resistance, and now it acts as a
support of the

trading range before.

So you have kind of like that stepping
stone and a stepping stone, but both are

downsloping.

And I think that could be the difficulty
here because on the top of this, you

also have this low or high.

So the rally, even though this is the
largest rally that we see here,

you know, the question that we ask, did
it commit to the upside?

And I think that, you know, here we
could go different ways about it.

we could definitely say that no it did
not and it failed just because we're

looking for that buying climax
resistance overcoming you know

that but at the same time you know we
might say okay well we do have also the

down slope and the whole range and this
is probably phase c at that point of

time and did we actually commit to the
upside

above the downslope in resistance, yes.

Not only that, we actually spend quite a
lot of time above that resistance.

I'm gonna draw this again.

Look at how much time we are spending,
not just above,

but we are actually going up.

So I have this, our term,

Progressive close.

So how did that come about, progressive?

Why is it a progressive close?

Again, not from the methodology.

Because you have on up thrusts temporary
commitments

that go above, let's say, And there is
no commitment even there. The close was

here. But imagine that this was a close.

So you have a temporary commitment above
and then an instant comeback below the

resistance point.

Here we have progressive closes.

What does it mean? We have closes that
are committing above

the level of resistance that are defined
for them to...

So we're using that significant bar
methodology here. So these three bars

definitely committing above the
resistance, and then each and one of

commits also locally.

Then the next bar that will have the
same type of commitment is going to be

one, this one, maybe this one, this one,
this one.

I'm not sure about this too, because the
close is at the bottom, probably this

one, but not the last one.

So we could see that throughout this
time that the price spent above the

resistance, it had one, two, three,
four, five, six, seven, eight, nine

progressive closes.

That tells you that the duration

with which the price stands above the
resistance on the major sign of

is significant enough for us to confirm
that the bias is to the upside.

And obviously, that comes very easy when
you use the downsloping resistance,

right? What about the fact that, no,
okay, why don't we just use what we

would use, a horizontal resistance? And
I think...

we should rightfully do so.

Something like this.

So then how would we analyze this
trading range?

Okay, well, probably we're gonna come
back to the analysis from the left a

little bit later.

Let's address the last three bars or the
last four bars.

And I think actually,

Actually,

let's conduct the whole analysis because
that would lead right into why we're

thinking about these three bars in a
specific way.

So we have a leader, leadership stock.

Demand is very healthy, and we are not
suspecting any distribution

on the way up. Look at how volume
signature expands, but it doesn't really

expand to the climactic.

This is probably more climactic, rather
than let's say

this. This probably shows more that
demand is less, or

there is a fewer demand for this stock,
and we could see this also in the

momentum itself.

Look at how these two rallies are
behaving.

There is a lot of momentum, there is a
lot of aggression, and then The last two

actually have only momentum maybe on the
initial kickoff bar, and there is

nothing after that.

So we think that demand is going down.

Demand is fading.

And that suggests that we are going to
have some kind of reaction.

But still, at this point of time, there
is nothing climactic about a stopping

action, even though this is a buying
climax and this is a stopping action.

There is nothing climactic in the way of
the terminal culmination of the

uptrend.

The bias at this point is going to be
still to the upside.

Now our next task is to see what kind of
change of character we're going to see.

And by the way, we could label it
slightly differently. We could do the

of the shakeout.

automatic rally, and then secondary
test.

And that would conclude phase A. In a
way, sometimes that's how I just label

for myself. This is just the area where
you have two stops.

You have actually two trends.

One trend, and I'll gladly confuse you
here, guys, because you are more

than WTC students.

There is a trend to the upside.

actually much more than that. And then
there is a trend to the downside.

Both of them have to be stopped.

So it makes a lot of logical sense for
me in this type of situations to think

about shake out, selling climax,
especially when the move has that type

finishing touch like a climactic touch
or a shake out touch with a lot of

signature and a big spread.

So therefore, sometimes I kind of label
it both scenarios on the same chart.

Does that make sense?

And that defines both stopping actions
and the testing for both of the trends

and down.

You guys see that?

And then we are kind of done with that
action and then everything else we have

that is B.

So, okay, so what could we conclude from
phase A?

We were waiting for some kind of
character of this first reaction, a

character reaction.

Volume definitely comes, but is this the
highest volume signature?

Is this the highest supply? Probably
not. There was more supply here,

than let's say here.

The last bar, and let me just clean this
up.

The last bar contained a lot of demand
behind it. We could see that from the

demand tail.

Look where the price has closed.

It almost came back to, you know, one
half of the last move.

So that was a very strong intraday move,
suggested that there is a lot of demand

right there. And then the next day,
there is a lot of effort to push the

down, but it doesn't go down. So this is
effort versus result.

There is a lot of effort, no result,
bullish.

We're still up here.

We're testing, and test happens on some
increase in the volume signature, but

creates a slightly higher low, so we're
still encountering some demand.

Bias is still up.

Weak rally.

This is where weak hands see in value.

They bought in.

And, you know, this is what drives this
rally.

But we also recognize that through the
buying that we see here and

then here, somebody actually significant
bought in this

position. Why? Well, because look at
this whole rally and look at where we

in terms of giving up.

the space and profitability of the
previous upstream trade, we are probably

retracing one third, no more.

And then at this one third, we're
encountering a lot of demand.

There is also demand in these bars right
here.

And that's where people are buying on
the upside.

So this is the value zone where they're
buying.

We want to define that.

Everything above that is going to be
overbought.

Everything below that is going to be
oversold.

Once for the first time we come to that
oversold condition, there is a stop in

action. Another time we're trying to go
down, another stop in attempt.

So is there a progression to the
downside when there is this attempt to

price down and there is an opposite
force that stops that move?

you know, from further going down. Yes,
so demand is there.

Demand is present again.

Now, result to the downside slightly
expands, suggesting that we're still in

upward bias, but supply is present.

And therefore, duration is going to
increase.

We go further investigating the next
couple of reactions.

This one also has demand behind it.

There's some demand off the low, kind of
like a false start.

And then after that, we see how on the
last two reactions,

supply actually goes much lower.

And demand goes lower again.

Both supply goes low and demand goes
lower. We could see this from these

spikes.

General deterioration of the volume
signature, suggesting that whatever

we have had and attempts to break to the
downsides through the support, all of

that was consumed.

So we have two areas of institutional
consumption of shares, absorption.

We have area number two, and we have
area number one.

So, so far, we are all on the upside,

and we're seeing that there is
definitely a value bind at the lows.

We don't see a significant momentum bind
on the way up, and

that's why it looks like a weak rally.

Question, why?

Why are they not buying on the upside?

What do you think guys?

If there is something missing in this
picture, it's that momentum signature,

right? That we would usually have in
phase D.

Okay, they pump in action July,
September. It's confusing. July,

Okay, we'll go through this again.

They all bought in the value zone.
That's the key.

Simon got it.

We would expect ITFs to be jumping in
right here. Yes.

So that's what's so interesting.

It's almost like a momentum player if
they're not present.

Right, so value bought in.

So this is long -term value.

They are for contrarian.

This is the same.

Long -term value, contrarian.

No momentum players.

So I was thinking, you know, why would
this happen?

And where is that momentum? So we
definitely see a lot of momentum on

advance.

And we see how momentum actually
diminishes going into this last bar

here, into this last leg.

And that tells us that this is where
momentum bars were present. And then

likely, they're the ones who gave up
those shares.

This volume signature right here is the
rotation between

momentum hands and

value hands.

Momentum hands are saying, okay, well,
this price went relatively fast.

We don't want to participate anymore.
We're going to take some profit.

And the value, when they see that, it's
not that even that the short -term value

is available, but the value investors
need large positions, so they need

liquidity. And they get this liquidity
on the profit taken by the momentum

traders on exiting those positions.

So then the story kind of becomes a
little bit more logical in the sense of

we see.

from the value bars in two zones here,
and then also in terms of this rally

not being a very big momentum rally.

Momentum traders probably will need to
see the break above the highs first, and

then they will start participating
again.

Okay, well then if value here is
inactive,

momentum players inactive, and then weak
hands are probably out at this point

because they're exhausted with all of
the losses that were brought up to them

the last four or five months, then we
see that generally that would lead to

lower volume signature, something like
this.

But throughout this volume signature, we
could see very definitive trend.

When you look at the days to the
downside relative to the days to the

you could see that demand still
dominates the supply, either with

consistency of many days in a row or
just even visually

in terms of how much supply, how much
demand comes.

So it looks bullish, this rally.

And we understand what's happening
behind that rally with the weak volume

signature. So then the bias is still to
the upside, but

we are saying that if we're going to
have some kind of failure, then we're

to reconsider and negate that bias.

All right, well, let's look now at the
last portion.

of this chart.

We have had two major reactions.

Then we are having the third one.

If we would look at swings and would
consider, let's say, the

volume or the effort that it takes to
move those swings to the downside, we

definitely would see that the

Effort to the downside generally is
diminishing into the third reaction.

And then when we would look at the
result, we would probably say that the

to the downside also diminished.

Bullish or bearish?

Bullish.

But let's approach this in a different
way.

That was too easy.

Look at the character of which the price
moves and how the volume behaves.

We have supply coming in, increase of
the supply.

There is some selling that happens, but
then there is a stopping almost

instantly, and there are multiple
attempts to go up again.

Before the price falls again on
increased volume signature, but we see

demand on this bar, and there are two
attempts to rally again.

the progress of that commitment is very
minimal. There is only one bar that

commits to the downside, and then the
price recovers really quickly.

Next time, we have the same type of, you
know, non...

How would I describe this?

Not impressive commitment to the
downside.

And with that also, the downspread...

is diminishing as well.

And that happens now on the diminished
effort signature.

So we've seen how the strength of the
push is deteriorating and the result

because of that is deteriorating as
well.

Suddenly some demand comes in and then
we have that

ominous three or four days to the
downside where

supply is increasing.

What is the commitment to the downside?

One close, we have a tail off the low,
and we have the highest

volume signature out of those three
days, suggesting that there is some

behind it.

So there is quite a lot of effort that
is increasing just locally, not to be

compared with this too but locally let's
say from this area right here to this

definitely there is an increase in the
effort to push the price down and yet

character with which the price goes down
and the actual result is minimal

the bias is still bullish so as we have
gone through

this whole chart the bias really has not
changed anywhere

I always think about, you know, those
points of vulnerability. Like, for

instance, yesterday I tweeted out, I was
looking at the intraday picture and the

daily for both, actually, for oil and
for the market.

There was something wrong about that,
the behavior, you know, of how the price

was behaving. We're going to look at
that, you know, in a second.

There was a point of vulnerability, and
we're still in that point of

vulnerability, I think, with the
markets. It doesn't mean long -term.

a short -term.

There's some selling that comes in, and
it has to be resolved somehow.

So it's after what looks like a weak
rally.

This is the moment of vulnerability
where selling is coming in, and we need

see what kind of behavior we're going to
see here.

Is it going to be more conducive to
bullish picture or more to bearish

And that's our bias game.

Let me quickly go through the solution
here. Let's look at what has happened

afterwards. We have a big bar like this.
And by the way, guys, would I give you

this bar, would all of you say that this
is a bullish bias?

Would you say so?

If I would give you that one more extra
bar, would you say that instead of,

let's say, a distribution, you would go
for the bullish bias?

And that's why this bar will never make
its place into the bias game.

Because the challenge for this game, I
think, should be in the

Wyckoff story that unfolds throughout
the whole chart.

rather than just like, you know, one
catalyst at the end.

There was one student who asked me, you
know, to do exactly that, to have that

type of reversal, swing reversal, and I
said, no, of course not.

You know, there's no fun in that.

Okay, so how does the price move after
that?

We kind of see in a lot of absorption of
the supply here.

So it happened in three places.

Here, here.

than here, then we naturally should feel
at this point the ease of movement.

Why? Because, well, a lot of supply has
been observed by this time.

And also on the top of that, we should
finally start seeing momentum players

coming back into this position.

This has been a leading stock and now it
changed its behavior.

And it starts showing some elements of
the momentum, especially on this first

bar, and then on the third figure and
moves.

And look how flat this reaction is.

One of the things that are important to
understand with reactions is the angle

or the slope of the price.

Once it becomes more horizontal, so we
need kind of like this slope to go from

more vertically down.

I don't know how to draw this.

Okay, so from more vertically down to
more horizontal.

And when we have this, that's when we
could say that supply has a specific

character.

And this character is such that suggests
that supply has been exhausted.

What we could expect from here is not
only continuation, but then also

acceleration at some point.

Maybe joining the cache can, you know,
come up with a scan for us to catch this

type of reaction.

You know, vertical reaction, less
vertical reaction, and then the slope is

horizontal, something like that.

Okay, let's go to a question.

from Simon.

I like this whole analysis. I mean, I
like the process of the analysis.

It's very tedious, but if you do just
one exercise per week, it's worth it.

So Simon, obviously, I'm commending you
on that.

Conclusion, as we see, was not a
successful conclusion.

let's figure out where we went wrong,
and Simon, you know, let me know.

Write it down.

Let's go to the first question. I
interpret B282931 as bind by the CO. Is

this correct?

All right.

And this is easier, you know, to go to
those bars

once you have all of them labeled. Okay,
28, 29.

And 31.

Yes. And we went through that.

Absolutely. So I'm not going to go
through the explanation because we just

All right. Second question. With the
rally with falling volume, how do we

identify an ease of movement to the
upside versus the weak rally? And I

that we've done that too.

Simon, I think we've covered that.

All right. So let's not stay on this.

So I'm saying I had in mind that it was
accumulation, but second guess my

analysis when we got to RA16.

All right, where is that?

Where is RA16?

In phase D.

Okay.

Right here.

Okay, so what's...

Weak hands rally, okay.

I think that we could make a mistake
here.

You know, I think that it would be okay.

What do you do with the weak rally?

You basically want to have some kind of
confirmation that this weak

rally leads to a bearish action.

So that's how we would avoid this
mistake or that's how we could possibly

this mistake.

So thinking about what does the weak
rally mean?

Well, the weak rally means that either
the bullish pattern is going to fall or

this weak rally is just going to be a
part of the reaccumulation.

So you need to go here and to figure out
what that week rally actually meant.

And initially, you probably will be
thinking, yeah, there is definitely

that is coming in. But what kind of
supply?

Not as much. What kind of result? Not as
much.

Subsequent supply, a lot of effort, not
a lot of result.

Less effort, kind of even less result.
Lots of effort, not a lot of result.

It seems that if we would just say the
weak rally needs to be confirmed, then

obviously that could be the way to go
away from this mistake.

Okay, great.

I saw a lot of gap into the downside and
that made me think more distribution.

Yes, that's true.

Lots of gaps here, but at the same time,
what do these gaps produce?

It gaps down to the previous support,
and it gaps down to the previous

And the distance, you know, of travel
there are not that impressive, you know,

just relative to the whole structure.

All right.

Let's go to the next bias gain. Here it
is.

I'm going to let you look at this for
maybe 15, 20 seconds.

And then write down what do you guys
think this is.

Is this a reaccumulation or is this a
distribution?

I'm going through this myself in my
mind.

All right, let's see the answers.

So we have about...

60 % of you saying this is the
reaccumulation, probably around 65,

65, maybe even 70.

A couple of you are saying this is the
distribution.

A few of you, more than a couple.

Okay.

Well, let's see what it's going to be.

There are certain things here that right
away.

catch my eye.

I wonder if you see those.

All right, guys.

As usual, this will come out tomorrow on
our Twitter, and then on Friday you can

see the solution.

If you have not done your analysis of
this

exercise before Friday, please don't
look at Twitter.

Do the exercise first and then look at
Twitter if you like.

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

Actually, let's go to this right away.

Rony is asking a question. In this
instrument, I have earlier

look at this as two separate ranges, but
I'm thinking they...

are both part of the larger upsloping
range.

And that's why we're coming to this
larger structure. It's easier to see the

structure from away, kind of like see a
larger structure than just like

zooming in into the last up thrust or
something like this. My reasoning for

is that despite the gap in July, this
one right here,

there hasn't been a clear change of
behavior in the price structure until

last push to the top. Am I seeing this
correctly or am I looking at a very

backing up action?

Both. I have also added its relative
strength compared to the index. So let's

just deal with the relative strength.

It's a leader.

Right away.

I wonder against what?

By you know against the industry group.
We're probably looking maybe like

against peers I'm not sure And what is
the structure here

uptrend?

Lots of Capitulation but lots of fine as
well supplies exhausted there is buying

here. So in this area right here. This
is our value zone

so anything below when it comes into
contact with a lot of liquidity is going

be bought okay something like that

this as well and then and then on this
bar right

here we're jumping up and this is where
supply comes

and it stops

produces the first initial reaction
first test and then still there is some

absorption and now at the higher level
then we have some buying here

so the bias looks bullish it's just that
we need to overcome

this area and we can because of this
supply right here so therefore

your bias still should be to the upside
and you should be thinking that unless

this up thrust is gonna fail in such a
way that is gonna show some weakness,

something like this, then I'm still
thinking that this is a reaccumulation.

And supply at this point has been just
pretty high.

It was here as well.

So therefore, it might take even several
times to try and to have

this type of attempt to get away from
this area.

And therefore, that could suggest slight
continuation of the duration of this

range. And that's how I would be
thinking about this picture until it

something of the distributive character.

where the price commits to the below
support in the way how I've shown to you

the sign of weakness.

There is a rally that follows that
decline, and it's weak, and then there

breakdown to the downside in the way of
the capitulation.

Until I see that, I'm thinking bullish
here, and I'm just thinking, let me see

if there is an opportune time to come
into this position.

In a way, just slightly reminds me of
AMD.

For those of you who are in WMD, you
guys know that I had a position

in AMD.

And I said that, you know, I see a lot
of like great patterns here,

analogs with the past, suggesting that
we're going to have a very...

big rally in AMD.

And my position was opened

here.

So in a way, I'm kind of making somewhat
of the same mistake.

I'm just basically going with an idea
that, well, this is the stock that

I'm gonna hold on for some time, so
there is no really reason for me to you

try to be fancy here and try to enter
somewhere later uh you know maybe we're

just gonna have one test and then we're
gonna go up from here so i entered it

there um i knew that because of this
supply right here

that we had also it here we're going to
have some duration for this range

look at the next time we have that
increase of the supply.

Again, we need to test.

And only when we are successfully
passing this area, this becomes a true

breakout.

So very similar in that way pattern.

And we have to think about this latest
action as increased supply and the

big question mark, what's going to
happen next?

Can it consolidate at this level and
then go up? Very bullish. Or more

would it go even lower?

And then the question is going to be,
how is the structure being labeled after

that?

All right, great.

Thank you, Ronnie.

Let's look at the markets really quick.

So there is obviously something that is
being talked about probably

everywhere, you know, on the technical
analysis front, and that is we don't

a lot of volume behind the move.

Well, we know for sure that we could
definitely travel without

a lot of volume signature. We don't have
to have increasing volume signature.

to travel with the ease of movement
where the price actually commits above

that's what produced in this you know a
lot of angst right now among technical

analysts and traders that you know this
is a fake breakout uh

but yet look how it broke out and how
many

progressive closes we have

Maybe not this one. One, two, three,
four, five.

Five closes.

The price spends a lot of time above
that breakout.

So that's very encouraging in itself.

Secondly, takes less effort to

do what? To push the price out and to
actually stay above the resistance. So

that tells us that supply,

is exhausted why is it exhausted well
because it was all

observed here first then here everything
on the way

down then a little bit here and probably
here too

then again on the way down a lot of
liquidity here all of this this is all

buying

And then again here.

So now that we've visualized where they
bought, so obviously what are they

buying? They're buying value or they are
buying by valued investors, by

value investors.

By the way, This is such an interesting
conversation that, you know, we

constantly have with Bruce, you know, on
WMD.

So buying value, who's buying value?

Value investors are buying value.

That's why value was outperforming all
this time. So look at the levels of the

buying and the supply. So supply plus
demand, right?

Supply plus demand.

Supply plus demand. We kind of see that
there is a deterioration of that

availability of the supply. Less supply
available and

it takes less demand to push

the price up from high to low.

So we see how effort to the downside
deteriorates throughout.

these three reactions because of that
value bias.

And that's the thing. I think that the
mistake that the analysts are making

right now, you know, calling this a
fake, is because momentum traders are

this market.

There are not a lot of stocks, actually,
that the momentum stocks that are

running away really, really hot. So you
have to be extremely selective.

A lot of them kind of like don't have
that theme.

behind them.

So therefore, there is no growth
element.

It will come later on in the later
stages of this rally.

And there is more buying as the price
goes down.

So what does it mean with the most
current picture?

We see some kind of trading range.

on the intraday level, some kind of
deterioration where we might be

okay, well, we have to look into that.

And then we also saw where momentum
stopped, where the buying stopped.

This was the last rally. This is where
it stopped at 3 ,000.

This is where it stopped before.

Before.

So you kind of could see what I'm
implying here, and here is that first

zone.

This is going to be an extreme for this
reaction.

So I think that if we are going to have
the reaction, we're going to have the

reaction not because it's a distribution
and supply

is present or was present.

No, it's a reaccumulation.

It's because demand is exhausted.

And therefore, we naturally will have
some kind of reaction.

Unless big news come, you know, very
bullish news, and then we have something

like this, like a climactic run.

So then on the bullish news, we probably
would have something like this.

Actually, you know, supply is not that
great here either. So again, you know,

suggest a continuation.

But if we're going to go down here, then
most likely we would probably go to the

3 ,000 area. That would be a really good
area for us to fall.

That would scare us some weak hands.
They're going to start selling.

Increased supply would increase
temporarily, would be observed by value

investors. And after that, on the next
breakout, this is where momentum players

are going to come and they're going to
be extremely aggressive and they will

push this market up, up, up.

So when we look at the more recent range
on the hourly.

So here you kind of could see that maybe
this last bar right here after this up

thrust is slightly misbehaving. But in
reality, we still need to break, you

know, a very large kind of like picture.

There are quite a few spots that look
the same. So we need to break that

to the downside.

And we've seen an increase in effort, an
attempt.

So let's see how that's going to happen
or if that's going to happen.

Look at this latest bar right here
today.

That's a change of character bar, but it
has to be followed on the downside for

the bars, and we still don't have that.
We don't see that.

Would it be fair to say that the flat
volume results in price momentum falling

as we see price spreads narrow and price
is starting to mushroom over? Yes. And

this is something that we're actually
covering in this November special.

I talk a lot about the momentum, how it
looks, how we could identify it.

This November special is the prelude to
the October special that we've already

done with John.

And it just explains step by step how
momentum should look on the failure

or on the continuation, on the
confirmation. So if you're interested,

for that. We still have two classes to
go. I'm very excited about that.

All right, and I think that's it.

All right, well, let's see what's going
to happen. I mean, we're just kind of

like seeing, you know, some
deterioration, some exhaustion in the

then we're seeing some deterioration in
the structure. We're still not seeing a

lot of supply.

But also at the same time, look how the
Dow is also, you know, consolidating.

Harold Russell has not been going up.

We're seeing gold starting to have
smaller spread.

Less effort to the downside, suggesting
a rally, which would mean that the

market could be in jeopardy here.

Oil as well.

And this is the comment about oil,
because you guys know that I follow oil

almost each day.

This was the rally that kind of spooked
me. And then this, I started thinking,

there is something wrong here.

Look at the effort to push the price up.

There is a really good rally after that
initial consumption of supply.

We're not necessarily making the higher
high, but we are making two closes

above.

And then the next time, the rally comes
exactly to this point again.

So that shows us some kind of limit as
to where the price could rally.

And then it did it again.

So right here,

I went on the Twitter and said that this
is a point of vulnerability.

It's either going to break to the
downside or it's going to break, you

continue with the move to the upside.

So, and it seemed like in the morning,
yeah, it might continue, but then look

how supply comes in and we are damaging
the structure right

here so it looks to me that we are going
to have some kind of reaction

so we'll have to see all right that's

it for the markets where are we four o
'clock okay great good timing

Let's go to the next question. This is
something that we will be covering this

Thursday in the November special, but
because this question was originally

the practicum, and I promised you guys
we're going to cover some of it here.

I think it's a fascinating subject
because my mind was thinking about this

for quite some time, and I'm still
thinking about this, contemplating what

is. What is it?

How do we measure those two things?

And we're talking about the price
velocity against the price momentum.

What are those?

And how do we see this?

So from just different sources on the
momentum and the price velocity.

Momentum is the rate of acceleration of
securities price of volume.

There is a momentum with which volume
can accelerate as well.

That is the speed.

at which the price is changing. And I
think this is where, you know, that

confusion comes. Speed and velocity,
kind of the same thing.

And therefore, you know, from this type
of the definition, you know, you might

be somewhat confused. At least I am.

Simply put, it refers to the rate of
change on price momentum for a

asset and is usually defined as a rate.

This I understand.

is easy for me to understand. I
understand that there is a rate of

I understand also that there could be a
different rate of change.

So we could have like a rate of change
on the rate of change. And that would

define the velocity itself.

But we can't say that the momentum is
just that rate of change on the rate of

change. It's just a rate of change of
the price.

on this specific taking period momentum
is analogous to a train and i love that

definition so let's just go through this
analogous to a train thereby the train

slowly accelerates when it starts moving
right but during the ride

the train stops accelerating so think
about this here is our train

i'm not such a big kind of like i you
know to draw all of this stuff but

okay

so at the beginning when we start our
movement

what happens with um

with velocity in the momentum momentum
starts

to increase but gradually Velocity also
starts to increase, but gradually

as well.

Then when the train, let's say, gets to,
let's say, 60 miles per

hour, what happens then?

Velocity stays the same, right?

It's at 60 miles per hour. So it's kind
of like...

It went up and then it stays the same.

But then what do you think, guys,
happens with the momentum here at this

Is momentum increasing or decreasing?

What do you think happens at the 60
miles per hour? And, you know, let's say

that this is the speed with which the
train travels at that point of time.

Let me actually kind of like

send a curveball to one

of you.

Hey, John, are you there?

John, you scan.

You want to unmute yourself?

You want to chat about this a little
bit?

Sure, I'm in. What do you think happens
with the momentum when the train gets to

60 miles per hour and velocity stays
that way?

Well, hopefully it doesn't crash.

Well, for sure.

Well, momentum at that point had to

increase to get to that speed, and then
it may stay constant at that higher

level. I would say definitely it should
increase first, right, because we are

pushing the train.

and momentum starts to accelerate to get
us to the velocity of 60 miles per

hour. Right. From there, and on the
chart, we're going to see it like this,

right? But then after that, we hit that
60 miles per hour. We don't need to have

any more momentum to stay there.
Velocity kind of can stay at that point.

momentum will start to actually
decelerate.

It starts stopping accelerating.

And we could see, and there's going to
be like zero acceleration, constant

velocity at 60 and zero acceleration.

And, John, I was thinking about this,
you know, on the chart. Let me just

this really quickly.

Yeah, that is one of the tricky things
about momentum is that it can.

it can decrease while price is still
increasing. It's just a slower rate.

Exactly. Increase. Very tricky, but it's
the case.

Yeah, it is the case. Because once that
velocity has been gained, it's almost

like the velocity is defined by the
presence of the momentum traders

and their activity in the market because
they're providing that push with their

buying and selling. So we could see
that, for instance,

let's say right here on, let me just go
to the

specific here.

And this is something that we will be
covering this Thursday.

So I want you guys to think about, you
know, if you're not there, you know, you

definitely should be there.

Let me actually take another picture.

Okay, so for instance, let's just look
at this latest run. This is a good

example. And John, please correct me if
I'm wrong.

So we have a momentum to the upside and
then another wave that overcomes

that previous momentum right here.

And look at where it stops.

It actually stops before the previous
low. So there is some divergence right

there. And this is something to think
about on its own.

But then what happens next?

The price still goes up.

And yet momentum goes down.

So it's almost like there is enough
acceleration right here for the price to

keep this velocity and there is no need
for any more buying.

Why? Well, because at this point, all of
this momentum buys together with

some stopping action reflect what?

Buying.

First buying on the way down and now
buying on the way up.

So supply is so exhausted that it leads
to what we are saying to be a

weak rally or where demand is actually
exhausted. Usually this type of weak

rally is going to have the reaction into
the zone where momentum has stopped

going up, somewhere here.

So then look at where we land with that.

And if we have that highest value zone
area right here, then we could apply the

structure and say, okay, well, at
specific spots, we want to be extremely

aggressive, like here.

John, what am I missing here on the
velocity and momentum?

I don't think you're missing anything.

It's just a fascinating subject when you
modulate the length of time that you're

looking at the rate of change.

shorter -term, medium -term, long -term,
and combining them together can

really give a phenomenal picture of how
price moves.

In fact, that would be maybe a topic for
November special is

looking at multi -time rate of change.

This Thursday, we're going to look into
multi -time frame rate of changes.

three rate of changes here um i was more
even referring to the swing structure

right so for instance the low and we
have first push second push and then

the second push has like this highest
rate of acceleration and it makes a lot

sense because when the train starts you
know uh you know to to go the most

acceleration is going to be like at that
you know not necessarily the first

steps right so there's going to be like
uh initial push it's almost like the

value investors are absorbing the weight
of the train and then as they start

moving it's much easier to move one once
the train moves right so once they

consume that you know that initial
weight and then the first big push and

after that all other pushes are kind of
smaller right so the swing ends here in

if we would take this as one swing and
we would be thinking okay well let's

at this short -term momentum picture
this is where acceleration has ended

and then there are just some pushes
additional pushes you know but they

are much smaller acceleration there is
lower and yet look at how the price

so we need to understand this concept on
a much much deeper level well joan i'm

looking forward to thursday

Great. See you then. Yeah, and we're
looking forward to maybe like a scan or

from joining a scan.

Well, we've got one queued up, and we're
going to work with that one inside and

out and see how small changes in rate of
change affect the outcome of our

scans. Very, very fascinating stuff.

Well, I can't wait. I can't wait. Thank
you, John.

All right. I'm going to put you on a hot
seat here.

All right.

So that was a good question.

Okay. Well, Simon, good questions, but
let's just, you know, let's just

move on from this and then let's keep
this in the November special. But this

was.

A question that I was addressing in my
mind for a couple of years now.

And I think this is probably the first
more serious thought because we are

studying momentum a lot lately.

All right, anatomy of the trade, trade
desk, quite a lot of latest price

movements here.

For those of you who are in the swing
position, that probably is a great...

you know, indication of what you were
expecting to see. We've talked about

type of bar where it's a big significant
bar, the bar that actually overcomes,

you know, previous points of the
resistance out of this area. We

as kind of like this long -term oversold
condition, and we needed to see some

kind of reversal action.

Before that, and this is something that
November Special is going to allude to

in the third session,

We had a lot of buying, and then we had
absorption of

that supply that was available at this
level, and then we have a synchronicity

of the effort and the result.

At this latest bar, today's bar, that is
probably one of the most attractive

bars for the actionable points.

I also like here, and this is from
Arvin.

kind of suggest to us that we're gonna
get back into

the long term resistance zone.

So that makes a lot of sense.

What do we have here? Reversal one, I
see, okay, 21

times four.

All right.

I wonder, Arvind, if we would take, and
lately what I'm doing is, I'm kind of

trying to see where the trading range is
to the most significant number. So

that's 200.

And I would take 1 % of that.

So that would be, for us, $2.

And then maybe to see for the box size.

So here we have $4, so this is twice as
much. Just to see with the $2, what kind

of count we're going to have. Something
tells me that we might actually overcome

the high if we do that.

All right, guys, well, what are your
thoughts here on Trade Desk?

Would you go in into this position now,
especially for those of you who were

thinking about maybe a distribution, a
redistribution?

How do we look at this position now?

And obviously still relative strength is
not there, at least fully.

Price is showing a lot of promise.

Would you become buyers here?

Let's see it.

Maybe we should just conduct the whole
poll.

Are we buyers here or not?

And you can say yes or no.

okay let's go through this yes yes yes
yes yes yes

yes again all right so other yeses okay
awesome

so i'm going to consider this as a buy
bar for us

and then the stop loss i would assume
that it's going to be below the selling

climax i don't think that we're going to
go for anything else but we also could

go slightly below what we think could be
a phase C at this point.

All right, so homework.

Follow this talk now, because we're in
the position, and let's analyze it. So

send me your analysis of this talk,
whether bar by bar or whatever you guys

see there, if there is some kind of
interest.

So let's, to put it on the chart.

you know send it to me and like with
arvind i could i could put it into the

slide all right great another question
another bias game

previous in your explanation of this
bias game the green circled reaction you

advised that this reaction is bullish as
volume is falling

During my assessment, I saw this as an
ease of movement to the downside, which

read as bearish.

How does one tell the difference?

Okay, a little bit of the repetition
here, but very useful repetition.

So we'll look at the reaction, and then
why would we say that it's not an ease

of movement, but a bullish reaction?

An ease of movement to the downside
would suggest,

a commitment below some kind of support

do we have that well here is our support
we don't have commitment below that

here's another support we don't have
commitment below that so therefore

intention fails and we don't have an
ease of movement well what do we have we

have a high low we have uh supply
diminishing here And that

only suggests that supply was available
at the higher levels, but at the lower

levels, it's actually consumed.

So there is an absorption at the higher
level that has happened with this price

action.

So now we would be expecting that
probably at the same level, we're going

have supply again.

So that's the difference there.

Ease of movement, we're going to have a
commitment. We don't have it here.

And then on, let's say, weak reaction,
we would just

have

deterioration of the supply.

So it would be a weak reaction for the
supply. And we see that, you know,

through the volume and through the
structure.

Is a movement to the downside applicable
if we do not go past a support level,

but go below a significant bar to the
downside?

Yes, that's exactly that.

You know, we're looking, you have to
think in terms of the magnitude, right?

if you have this move that contains
multiple bars, so then we would be

definitely looking for the support area
that would have, be defined also by...

the previous reaction of the same
magnitude.

So we can't just say that because this
bar has been reversed, then there is an

ease of movement.

Relative to the last commitment to the
upside, there is a ease of movement.

And it's not even an ease of movement.
There is an increase of the supply, and

the price commits to the downside.

So effort increases.

result increases. There is no ease of
movement on diminished result, and yet

the commitment. That's the difference.

So don't mistaken the magnitude of
different reactions with just the

of the bar in the specific swing.

All right, great.

Now let's look at the time, 420. Okay,
we actually might be slightly

ahead today.

So that's great, good pace.

So we went through the first two stocks
on this exercise, stock number one and

stock number two. For the first stock,
we said, well, we are probably in some

kind of climactic action.

From here, we would be expecting the
price to go aggressively up slightly

42.

That would be our interpretation.

Stock number two, we said, is very
interesting. It has a lot of strength.

and we've defined strength throughout
the whole trading range we thought that

this was phase c even this looked
bullish so we said that we're going to

and buy and we would be expecting an
acceleration from here because of how

active actively supply has been observed
in this area we see that the volume has

increased there is a lot of
institutional presence all right so now

to stock number three and stock number
four

okay

and before we actually go to stock
number three this is a really good

from arvin so let's go through this rn
is asking whenever evaluating a stock

versus industry group so here's industry
group and a stock which is more

appropriate structure analysis or
percent difference analysis.

And I'm assuming, Arvind, that percent
difference is going to be what? It's

going to be kind of like the same idea
behind

the relative outperformance because the
relative performance is going to be

based on those numbers.

You know, what's the difference, let's
say, between

They move to the downside in one acid
relative to another.

And we would want to see relative to
each other what moves

further down.

The way how we compare, we usually do a
comparative analysis based on the

structure. So that would be important to
me. But then if you have a relative

strength line, then definitely consider

applying it to your chart and seeing
what the trend of that line is.

And I wonder how you would interpret
this here. So let's go right away to

number three and let's talk about this.

And let's talk about the comparative
strength.

I'm gonna identify specific points,
significant points, and you guys just

it down to me.

you could just write down one letter, S
or W, for strength or weakness, or

stronger or weaker.

So at this point right here, is the
stock stronger or weaker than the group?

Stronger. At this point, stronger or
weaker?

weaker at this point stronger or weaker

weaker at this

point stronger or weaker weaker

at this point stronger or weaker

stronger at this

point stronger or weaker

stronger. Let's stop here.

We are probably taking either,

we are taking either this low for the
group and we see how the price dropped

here.

Or we are taking actually this
significant low and we're synchronizing

the group.

And then we're seeing that on the stock,
the price came to the same level

for the group we actually dropped from
that level so the group is weaker and

stock is stronger okay next one uh this
point right here

stronger or weaker

stronger

This point right here, this low.

Stronger or weaker?

Stronger.

This point right here.

Stronger or weaker?

Stronger.

Alright, let's do this point right here.
Stronger or weaker?

Stronger. This point right here.
Stronger or weaker?

Stronger. And the last point. Stronger
or weaker?

Weaker.

Why weaker?

Look at this. High, low, and here we are
just horizontal.

So, definitely weaker.

So what is happening with the
comparative relative strength?

We've been in the leadership stock, and
then we go through the period where the

stock is of no interest to the
investors, especially

in this area right here. So there is
some selling that is happening.

We see that supply is going up.

is going up, is going up.

Someone is selling and then someone is
out of position.

And that's why price kind of drifts up,
has some supply again, and

that leads to the change of character,
which is this reaction.

Okay, well, there is no supply after
that whatsoever.

Actually, there is more demand, really
good rally.

So we are seeing that after this change
of character, there is more bullish

bias.

And then this last portion, this is
something that we want to decipher.

There is a little bit of the increase in
effort to push the price up.

Overall, what do you see for the result?

Are we expanding result, increasing
result, or are we decreasing result?

result is increasing to the downside or
result is increasing to the downside

all right so everybody's saying
decreasing okay great

yeah how how is it decreasing well we
had previous reaction of the

same magnitude that was quite
significant and here we just don't have

this much smaller uh What kind of
selling do we have? Maybe this bar right

that's the most that we get. This is
more aggressive.

And then a higher low relative to the
previous area.

So this is also a really good result for
bulls on the slightly increased effort.

So slight increased effort to push the
price down, inability to do so, suggests

presence of...

at this point and we kind of could see
this, the price falls and then quickly

goes up. So there are some momentum bars
that are present there as well.

So now let's deal with the last maybe
week here or that big bar.

How would we interpret that?

Does this bar changes the bias?

Let's answer this question first. What
do you guys think?

This big bar to the downside with this
volume signature, does it change the

bias from up to down?

Okay, do you need more time to think
about this, guys?

All right, so we're in two camps.

Some people are saying, no, it doesn't
change the bias, and some

people are saying, yes, it changes the
bias.

All right, so how would we change the
bias here?

So one of the suggestions here from
people who are saying, yeah, the bias is

changed, is an ease of movement.

All right, well, we just went through
this.

We're definitely committing to the
downside.

Do we commit below a significant support
level that would tell us that this

is an ease of movement, or are we just
talking about a reversal of the swing?

we need to commit below somewhat of the
significant level

and here we're just stopping right there
is so much aggression with which the

price moves and there is some volume
increase here

but it's not that big right so we had
supply coming in um at

some levels that were

even more impressive before that, this
is the supply that is coming in.

This is the level of the supply that
comes in on that particular bar.

And there is no commitment below, so no
result.

Therefore, it's not that threatened.

And don't forget what we're seeing here.
Strength, strength, strength.

everything is strong until this point
remember that signature

on on phase C where we have
institutional

buying throughout the whole structure
and then we have

a short -term weakness that usually
would identify phase C

And usually because of that weakness,
investors are going to see some value

and they're going to be more drawn to
this stock.

Oh my gosh, am I giving you the correct
answer to this whole puzzle?

I don't know.

Well, at least it looks to me like, you
know, there is a lot of presence here

after all of this volatility.

And now, you know, some value and I'm
thinking I got to get into this stock.

How? Well...

basically anything on the way up, you
know, I'm taking.

All right, well, let's look at stock
number four before we go to the

All right, so we probably should

do the same.

Let's start from this low right here.

Is the stock stronger or weaker?

at this point

stronger

how about this point right here stronger
or weaker

Stronger or weaker?

Stronger.

Stronger or weaker?

Okay, next point is gonna be this close
right here

versus this close.

Stronger or weaker?

Stronger.

Why stronger? Look at where it closes
relative to the previous significant

low. So we're just really close to that
low.

And then look at where it closes on the
industry group and look.

how much distance is between that close
and that support or now access the

resistance line.

So the stock is still stronger.

Wow, what a pattern, right?

The stock is stronger, there is a big
demand tail right here, looks very much

like a shakeout, lots of volume
signature.

And it all comes in the stock.

that is actually stronger than the
industry group itself.

We definitely should be very cognizant
that the group is actually in the

downtrend.

And we see lower highs and lower lows.

But we also should recognize that
something is going on with this group.

There was an attempt to stop

So probably this is a climactic action.

Automatic rally, secondary test, phase
A.

Then there is a lot of time that the
price has spent in phase B in the upper

part of the range, and look for the
stock as well. This is one of the most

favorable patterns that we could have on
the structure, where phase B

suggests that

institutional trend followers got into
this position.

Now this pattern unfortunately will
always resolve itself in the double

and the retest of the previous low with
some of the capitulation that we're

gonna see from those institutional trend
followers, they will be thinking that

they didn't get into the position at the
correct time.

So they will give up their shares, from
here liquidity will increase and the

value investor is going to buy.

That will support the price and from
here, the price will go up with more

synchronicity on the result.

So therefore, a very strong stock in the
group that might be also experiencing

some buying, the group probably will
follow the stock. This is a leadership

stock. So this also looks very
attractive.

So therefore, when we come to the
decision slide here, I want you to

look at these four stocks.

Again, consider what we said about those
stocks and tell me one

stock, the one that you would want to
buy at this point. Which stock do you

think will outperform all of them?

I'll give you some time to think about
this.

All right, let's see at some of the
answers that you have. Okay, so stock

three. Guys, by the way, I might have
said something, but, you know, about

number three, I've just seen a lot of
kind of like bullish characteristics

I like the structure. I like this
weakness at the end. That's great. But

like this stock too. Like stock number
two appeals to me.

Stock number four appeals to me also for
different reasons because if this is

phase C, I want to be in it relatively
early. I think that first we're going to

have some kind of minus sign of
strength, maybe like into 125 area,

130, and then we'll consolidate and then
we'll go up. So initial long -term

position could be established here.

So you have to think long -term.

which which stock could potentially
outperform uh you know in the more

meaningful way all right well
everybody's going with stock number

see what happens all right so stock
number

one we said that there's going to be
that first initial reaction above the uh

preliminary support high

Happened that way, so nice. We could
have here a trade. If you're a swing

and you're thinking in terms of the
efficiency of how you use the capital, a

trade, let's say, from 35 to 42,

which is a 20 % move in

about, what, less than a month, so maybe
like three weeks.

is actually quite effective if you are
doing something like that.

You could also find that probably in
some other stocks here that you could

especially this one right here, number
four, because this is a deeply oversold

condition. And just recently I've been
tasked to think about

the benefit of switching.

between positions to produce more
velocity with which you generate the

Now, this is a little bit crazy because
you have to be extremely correct

with your calls. Otherwise, that's not
gonna work. So I'm not actually gonna

advertise this or talk about, but it was
an interesting thought.

So if we would be thinking in terms of
the efficiency of making the money in

shortest period of time, Stock number
one and stock number four will be our

candidates just because of the deeply
oversold condition and the push up that

they usually would have in a relatively
short period of time.

So here we have one month and from 100
we go to about

130. So that's plus 30 % in one month.

We don't have that in stock number
three.

Although, hold on, I might be totally
incorrect.

So this is what, 14 bucks on the

58. So probably, yeah, also 20%. No,
kind of the same.

So this also would be very interesting.

Okay, and then here we have, let's say
like 49 to about

55.

Six bucks, so yeah, not as much.

50, yeah.

So that's okay. So stock number one,
two, three, and four kind of were

presenting us some of the opportunities.
And then again, why does this happen?

Look at where we were, right? So short
-term weakness

defines short -term oversold condition,
doesn't it?

then oversold, then oversold.

It's out of those oversold conditions
where mean reversion traders come and

see that there is such a deviation from
the fair price.

They know that they could push this and
create such an acceleration, such a

momentum that will increase velocity
really quickly.

And then that will push the price up.
And we see this in all three cases.

We see it here with the continuation.

We see it here.

We see it here with continuation.

Simon is asking, how do we, what is
this?

Assert a stock in the oversold
condition?

Well, that was my question to you guys,
next question. But okay, if this is a

question, I'm going to give you a hint.

Out of these three stocks, one, three,
and four, I would be picking

three and four.

As certain. Yeah, as certain.

Okay.

Why three and four?

Because there is a structure here,
attractive structure, right? So we are

potential phase C in the stock number
three, and we are in the potential phase

C shakeout action on stock number four.

So both in phase C have kind of like
short -term conditions of weakness.

And obviously, stock number four, if we
were faced with the dilemma, if somebody

would come to us and say, in the next
months or so, you have out of these four

stocks, pick up the stock that is going
to produce the largest result.

You know, what kind of stock you're
going to look for?

you're probably going to look for the
stock that already has concluded its

structure, right? So phase C, and it's
going to be in the oversold condition.

John, I think this could be one of those
skins, right? So phase C in the deeply

oversold condition with bullish
conditions.

Phase C, oversold, bullish buyers.

And then both three and four are like
that, four even more so because of the

shakeout action and it produces the
largest return.

So you could just create strategies just
based on that.

So how do we do this? We want the
structure and we want that oversold and

want that bullishness.

Okay, what else? We said that stock
number...

Two is very attractive to us long term
because when we were here, this is where

the point of entry would happen.

Because of a lot of things here, a lot
of strength, a lot of bind in this area,

structure is there as well.

We are thinking that probably we've
consumed a lot of the supply in this

and the move to the upside could be
quite fast as well. By the

move, we mean more longer term move.

Here it is.

And we're seeing that volume
deterioration and the movement of the

let's talk about this a little bit.

First of all, let's answer this
question, guys.

What do you think? Why is the volume
signature going down?

Why does the volume signature go down?

Supply and demand both decrease.

Correct.

Why else?

Less and less demand as price goes
higher. Correct.

Buying at lower prices.

Well, Sharon, let me rephrase this for
you.

I think this is where we're seeing that
bind.

And this bind is all value bind, right?
Because it's on the way down, on the way

down, on the way down, on the way down,
and then on the way up.

Here is our value zone.

This is where they bought in.

And we probably seen the binding to this
area right here.

And then when we look at this area,

what are we saying? We are saying that
both momentum has increased and

velocity has increased.

And then we look at the continuation and
we are saying that

In this case, momentum starts to
decelerate.

We don't have as quicker rate of change
as we had between 49

and 55.

It's smaller.

So momentum will start to deteriorate.
It will have some local jumps up,

but long term it will start to
deteriorate.

And then

velocity will reach certain level and
will start to deteriorate as well, a

little bit.

But still it will be more sustainable
than the momentum

deceleration itself.

And that comes because they have bought
in this area and then they just let the

price be.

kind of travel on its own. They are not
buyers anymore, but they are not sellers

either. And that supports the price and
its uptrend and either movement

to the upside.

Indeed, this whole area has multiple
commitments to the

upside, and yet it happens on the
diminished volume characteristics.

So extremely important to see that.

Okay, what else? I like how stock number
three has traveled, right? So we have

increase in momentum and then decrease
in momentum.

Why would momentum decrease here, guys?
What do you think?

And actually, let me just go, I guess,
to that particular stock.

Let's just see it. Stock one, two, and
then three.

Let's look at it with more details.

Momentum was increasing.

Actually, after this, it was slightly
decreasing, but definitely in this area,

if we're comparing this to momentum is
decreasing.

Why would momentum decrease? What do you
think?

ITFs have bought at the lower price
level already.

Okay, yeah, they bought in. I mean, the
value have been buying for some

time.

Momentum probably was getting in
somewhere here. We don't necessarily see

of momentum there.

They don't need to acquire anymore, less
urgent buying.

Well, if they're getting in on the
momentum right here, then they are just

holding here, this position.

So momentum players plus value.

And as they hold to this position, at
some point, some supply comes in

into the market. And as this supply is
being introduced, they're kind of

consuming that supply.

And this laborious move to the upside.

Looks like a big feather.

So some supply comes on profit taking.

And they observe this supply. So COO
observes.

Vertically.

It's being presented, it's being
observed, presented, observed,

observed.

But there is no like an original
momentum push that we have at this

point. Usually this type of development
of the uptrend characteristics where in

the first phase you have your momentum
buys, by the way I was talking about

in the bow.

you know, character of the up move and
of the down move, the structure of

the characteristics, then you're gonna
have vertical absorption.

And usually when this happens, because
momentum by itself, momentum has

those absorption characteristics, you
have the first zone where there is an

absorption, second zone where there is
an absorption, and

you're definitely going to have the
third zone that is going to be

wave and it's going to have less supply.

And it's at this less supply rally, this
is where swing positions are going to

be extremely important and where
leverage also will play a big role.

We want to have the trade, the swing
trades with a lot of acceleration.

either in the first momentum zone or in
the last speculative zone we

don't want to have let's say leverage
positions where we have all of those

and big spread type of the reactions on
increased volume signature in the

vertical absorption period

that's just kind of like the whole

structure here and then

What else?

Let's go to our next

slide where we have all of them
together.

All right.

Now I want you to look again at these
four stocks where they are right now

and tell me which stock would you choose

here?

We're continuing with the uptrend theme
here.

I don't see any violation yet on the
distribution side.

None of them exhibit any distributional
signs in the last portion of the chart.

So this would mean that all of them
should go up, continue the uptrend.

one would you pick out of four?

I'll give you 20, 30 seconds to think
about it.

All right, let's see your answers, so
please type those in if you haven't yet.

Okay, so we have not as many answers for
some reason. Okay, should I give you

more time, guys?

So maybe we'll stop here. So majority of
you are saying stock number three.

And then a couple of you are saying
stock number four and stock number two.

All right. So let me kind of like think
about this really quick.

Would definitely be thinking that
probably stock number one.

uh is attractive at this point that's
number one and then stock number four

why

am i choosing this two well all of them
are leadership stocks

all of them are bullish stocks they're
all moving in the same direction all of

them have had some causalities

I think that there are two points that
we need to bring up here for this

selection, for the next selection. I
think causality itself, right? So we've

talked about stock number two. We said
here is one causality.

Here is a larger causality.

Stock number three, there is a large
causality right here.

Stock number four, it had a causality
right here. Now this causality has

expanded.

So quite a lot of causality right there.
Stock number one, we talked about no

causality at this point, and yet now we
could have maybe

something like this, or maybe even this
or this.

So all four of them have enough
causality to make big

moves.

which ones made big moves and which ones
did not yet.

Obviously, one and four have not moved
quite substantially yet.

So we would be thinking about these two
stocks as having that potential

causality to have much larger moves. At
the same time, we want to look at the

second thing. So we looked at the
causality.

And the second analytical piece that we
have to consider, what is the short

-term performance?

Because the short -term performance will
define short -term leaders.

Again, if the goal was to come up with

the stock that will outperform in the
next months or three months.

Which stock would we choose? We probably
would be choosing based on the

outperformance, which will be short
term. So where are we seeing

outperformance? Well, probably in the
last three months since August.

Here and then here.

Here and then here.

Here and then here.

And then here.

Which stock, or maybe stocks, are
stronger?

Which ones are exhibiting ability to
hold on on the

reactions and not lose a lot of ground?

What would that indicate to you?

probably that institutions are not
selling those stocks.

And if they even do, you know, that
supply is being observed and there are

successful tests.

Whereas in some other cases, we might
see some short -term synchronicity

between profit -taking and how the price
reacts to that.

It doesn't mean that these stocks are
not going to

continue their run actually in fact
stock number two is probably

potential phase c the volume signature
is correct and then stock number three

probably is in a trading range of some
sort at least maybe there's going to be

another attempt to retest or something
but stock number one and stock number

uh four are in the interesting places

where they've experienced very correct

structural

changes.

And now we're seeing those structural
changes resulting in the outperformance

over the stocks that we look at.

And they suggest that short term they're
going to outperform.

So one of four definitely would be on
our list to consider. I would

say that then out of these two stocks,
one and four, which one would you

Out of one and four, which one would you
choose?

Four. Everybody's saying four. Why four?

What is the reason?

High in the structure than one.

Yeah, and there is, this last rally has
a lot of momentum behind it.

and this last rally that we have since
september low has some momentum but not

as much it still probably will
outperform two and three um

but four looks very very interesting and
attractive well let's see what happens

next okay so here we are revealing what
stocks they are

and the groups

So the first one is U .S. banks and a
Citigroup.

And this is in 2016.

So we're seeing that structure, phase C,
feather grinding out,

consuming the last point of supply,
suggesting that there's going to be an

acceleration.

And the whole group accelerates. That's
after the election.

So initially,

This is something that we could consider
as a short -term swing position because

we see how the price could potentially
accelerate and outperform.

Stock number two was from the insurance
brokers, Marshall & McMillan,

MMC.

And we said that it's not like it's not
going to go up again. It's going to

continue its movement. We're probably in
phase C.

But relative to other stocks, it might
not accelerate as quickly.

Stock number three, we said at this
point, probably

would be in some kind of trading range,
or at least it would retest first before

going up.

Ultimately, this was kind of the stock
to be in, stock number three.

aligned technology from the medical
supplies group.

And that outperformance all started
here.

This was stronger.

This was a really good momentum kick.

So another point of entry at this point
and on the way out. And look at how the

price moves.

But short term, it didn't outperform.

And then stock number four.

was Boeing in aerospace, and we were
right here.

And from this point on, this was the
stock definitely that actually

all of them.

And number four, with all of this local
outperformance, big course build, a lot

of institutional presence in this
shakeout area, that was just a very...

Good structure to be in, and then a
short -term strength suggested further

outperformance. And short -term, look at
how this swing into March is just

producing such a great profit. So 135 to
185,

50 % run during that time.

And the whole group is also performing
really well.

All right, well, I think that's it for
today, guys. We kind of went through

really quick.

Oh, maybe we should stop here.

All right, yeah, let's stop here.

So for the homework, obviously a bias
game, as usual.

Look at the trade desk because we've
opened officially, you know, as a class,

this position. So I want your analysis
as to what...

It's going to happen throughout the
week.

And then I'll see you guys next week.
Really good class.

We are kind of covering a lot of ground,
a lot of, you know, some in -depth

concepts. So it's definitely very
useful.

I'll see you next week, guys. Thank you
so much.

Bye -bye.