Original subtitles

Second session of the October special paper reading course series number one.

We're talking about basics.

Those basics include bar by bar analysis, which we did in the first

Today we're going to go through swing by swing analysis, and I'm going to give

you the basics.

We're definitely going to discuss swing analysis more with David Weiss, and

obviously David has a lot to say on that subject, so I'm looking forward to

that.

Just on that note,

I already have been working with David a couple of times on the curriculum,

so it's shaping up really nicely, so I'm extremely happy about that.

Next session and the last session of this series, number one, is going to be

next week on the 22nd. And I also want to say thank you for all of the emails.

was not answering emails.

today or yesterday but I look actually through all of them not through the

but just through the body of the email and just wanted to see what kind of

comments you have so I was just overwhelmed

find so much value in this information and a lot of you have said that you know

this is either was a missing piece or it was such a systematic detailed

information it really helped you some of you started applying this you know

right away in your in your trading with good results so I'm grateful

to receive all of those comments so obviously this is something that

So today I reshuffled a little bit our curriculum.

And in session number two, we will review the homework if we

have time left today.

And if not, you're just going to self -review.

And Sam is asking, do you have keys to the homework exercises? Yes. So you will

have those keys.

the same way as you did. I was working through those, and it is a very, very

meticulous job, right? So you go bar by bar. You have to think about which bar

you're going to compare it to.

What's the effort? What's the result?

And finally come to the conclusion.

But for those of you who actually did those exercises, you kind of started

seeing where the change of behavior happens, where something different

purpose of the exercise just to find those type of changes

volume signature, the texture with which the swing unfolds, and then also the

context, which is our Wyckoffian context, obviously.

Exercises. We have two exercises, and just kind of thinking, as I was

for this session about last session, and how we didn't really have a lot of time

for exercises, I tried to devote a little bit more time to those. So

today... will be able to do more of the exercises because it's through the

exercise that you actually gain the knowledge that's just my opinion

this material you can't just read and get the concept you

know on a very kind of like skill level you could get it conceptually that yes

okay supply increases that means the price should go down but there are so

variations

show you today's intraday tape freedom that I did and the trade

that was that emerged from that tape freedom and it's going to be really

helpful for us specifically with this session and we'll try to combine it you

know with also the bar by bar analysis and then session number three I'm

about the PNF and volume there is you know this is where

volume signature in tape reading, so definitely useful as well.

Some case studies I'm going to have to see, you know, I already have slides

prepared, maybe like 60 -70 % of the slides are ready, but something, you

usually before the session I could reshuffle, so you could expect that from

Most importantly, some of you were asking questions already.

regarding, let's say, an exercise from session number one, or maybe some other

questions, or maybe even some administrative questions, I am

those questions for session number three for the Q &A segment of that session.

And with that, I just want to say email your questions for session number three,

and we'll definitely cover that as much as we can.

As usual, everything that we've talked about in this... glasses is for

educational purposes only so keep that in mind all right well let's start

thinking about how we would be comparing a rally to rally or a reaction to the

reaction now um i always say to wtc students is that when we look at

the volume signature when we're trying to distinguish between the effort of the

supply and the effort of the demand I want you to concentrate on the supply

first. Supply is much more important than demand in the sense that

provide supply in the distributional formations and they absorb the

supply in their accumulation formations.

So it's important for us to recognize and observe on the chart

the availability of the supply at any particular point in different

market environments.

So therefore, we're going to start with the comparison of one reaction to

another. And then the way how we're going to compare it is we're going to

at the price extension.

And you can look at the price extension in different terms, right? You could

look at the extension, let's say, in percentage terms. You could look at the

extension in terms of the points. You could look at the price extension in

of the structural thoughts like resistance and support relative to

We're also going to look at how effort is behaving during those rallies and

reactions.

Is it expanding?

Is it decreasing?

If it's expanding, what kind of price extension do we have? So the law of

versus result is going to come very handy in here.

Also, and this has been introduced to WTC students.

couple of years ago so this is not in the original like of work the texture of

the swing how do we see the spread behave and how do we see the volume

relationship to that spread what about the volatility of the specific reaction

or volatility or to the upside of the rally so that defines the

So therefore, using like a price structural context is going to be of

importance. And here we are going to be thinking about trading ranges and

trending environments.

And on the trending environments, obviously, up or down.

And that's the work that we're going to do today. So maybe a little bit

simplistic, but somebody might argue after this class that it was as intense

the first session.

But at least to me, swing analysis is somewhat easier because it's not as

laborious. But yet, you miss something in this analysis, and you can come to a

different conclusion.

So therefore, we want to establish good practices, correct practices, where we

know how systematically we could approach our analysis and our

So in here is our first...

So the first thing that I would do is just to try to figure out what kind of

environment are we are in.

So a pop quiz here.

What is the current environment that you see on this chart?

Please write it down in the questions box.

Okay, answers are coming in.

So far so good.

answers that i would say you know they are on the incorrect side of the answer

we are in the big trading range right if we would be thinking more to the right

for those of you who said that we are in the uptrend you would be partially

correct as well because if we would be just thinking about the right side of

this slide of the chart then we're seeing

intermediate highs, and then higher low relative to the previous low, which

establishes the uptrend. We tell this that the uptrend is starting to

emerge. But overall, if we would look through the whole chart, we definitely

that the price is going down, going up, going down, going up, going down again,

going up again. So this is a consolidating type of action.

consolidation we have different type of swings and remember how we've talked

about analog bars they're going to occur in the same structural spot and they're

going to have the same contextual definition for instance swing number one

here could be compared to which swing probably this one right here because

contextually these are the swings that are starting at the top of the trading

range at the resistance and then we see how they are progressing to the

support and the lows of those swings establish that support so therefore

are the swings that are going to be analogous swings so obviously we want to

compare those we also want to recognize

So what are those?

Well, those are the swings that are testing the supply of the

previous swings down.

And then when we look into the next structure, it's very interesting how we

could potentially start comparing that structure to what we've seen with

the previous two swings. It is where the first leg down establishes the range.

the trading range and then the second swing is actually testing the first one

and that's the whole assumption that we're gonna make and by the way just by

this comparison if we would compare area one to two to three we're gonna see

right away that something different is happening in area number three the

down

the second swing here so that should tell us something about

about the nature of the bias we are not progressing to the downside

anymore as much as we did before and from that we could make a deduction

of on its own it's a bullish environment that we're expecting from here on

but let's be more detailed Because I want you guys to go through this

and establish those type of practices that are consistent and that are going

be successful.

Okay, so let's look at swing number one. We have 25 bars.

277 points if we would compare this swing

to the next swing and we would be thinking about you know the extension

progression of the price to the downside we're seeing that that number is

slightly diminishing on the second swing so we instantly start thinking that

maybe there is less selling

they are very similar so the selling is starting slightly to diminish it doesn't

mean that there is no selling we could see that from the volume signature in

both cases that's not the point we want to see what kind of result those swings

are you know showing us and by the way speaking about swing you

could see here the green lines that i put and this is just a very simple

simplistic zigzag function in the trading view software this is trading

and you could find this function in the in almost all major

softwares that you guys use and zigzag function could be defined by the number

of points by the percent by the atr so quite a lot of variables that you could

definitely look at

figure out how to put on the zigzag and i just put it you know for your

visualization here it's just easier to see those swings but if you don't want

use it i personally do not use that you could always visualize the swing and the

twin uh reversals by the uh reversal of the significant bar right so for

instance we have loss commitment to the downside and then the bar that reverses

that

that bar is going to be a reversal bar for us that shows the commitment of the

opposing force and the reversal itself all right well uh let's

come back to the comparison of swing number one to the downside to the swing

number two we said that in terms of the points in terms of the percent we are

actually slightly diminishing the result to the downside

And not only that, swing number one established an area of the support, and

low swing number two actually did not touch that support. So it's creating

high -low.

And from here, by looking at the result of what swing number two produced

relative to swing number one, we're definitely thinking, again, that selling

might not...

through the rest of our studies here. Let's look at the volume.

Is the volume increasing or decreasing?

Is there a consistency of volume?

And that is going to be selling in this case because we're looking at the

reaction.

Well, definitely we see the increase of volume in both cases.

And usually what I would do is I would look at...

Here, this bar is very interesting because it has a big tail.

So here is how it looks.

So demand has come in. We already know this from the first session. When we

a bar like this with the close into the top of the section, we

know that there was some selling. And then the price went up and closed, so

demand is behind it.

realistically looking at the volume that was selling volume just even prior to

that bar and then when we are comparing it to the volume of swing number one

what can we say is selling less or more

what do you guys think

looking at the volume signature i'm going to repeat the

question looking at the volume signature and

swing number two to the volume signature on swing number one is there more

selling or less selling and majority of you are saying less selling okay well

for those of you if you said more selling so you have to kind of like go a

little bit more into the details and just think about for instance you know

this is just some tricks that i'm gonna keep talking about you know during this

session i usually try to extract maybe visualize the average of the volume in

this in this area on this swing down so here is let's say one two three

four five probably somewhere here all right and then we have to

negate the last bar which had that demand built in so one two

three four five six

So looking at the visualized averages of the volume signature, is the volume

diminishing or increasing?

Definitely diminishing.

So therefore, we know that supply is diminishing as well. And therefore, we

that there is less selling.

So now that starts making sense, right? Because when we looked at the result in

terms of the point, in terms of the...

percent in terms of the overcoming the support area we see that there is less

selling now less selling does not automatically mean that we are done with

accumulation less selling just means exactly that there is less selling

but there is also something else that we have to look at and that is

is our texture volatility of the spread and the volume is

changing during those swings to the downside and let's examine this swing

kind of deconstruct it a little bit so we're seeing that on the way down in the

first case uh the bars are actually

such a huge velocity to the downside that we see how the increase of those

of both increase of supply and increase of the demand so we can't really take it

into the account but if we would look at everything else prior to that we could

see that there is probably just one bar that shows a lot of volatility and the

volume signature was the highest on that bar well that's quite different from

what we've seen before in swing number two the loss capitulation bar does have

demand tail that is of no comparison to the one that we have on the second

swing at the end so therefore even if you exclude this

that does not necessarily provide you the timing it just provides you the

kind of like the deductions about the nature of the potential

bias that we could have after accumulation is complete or after the

trading range

and what kind of volume as an effort takes to create that type of texture is

extremely important to us all right so what else could we

conclude here just from the comparison of those two bars

I'm sorry two swings let's look at the content so we don't have the

data

But we definitely could conclude from the volatility of swing number one and

volume signature that this probably acts as a change of behavior.

And by the way, some of you might have guessed what that chart is, what symbol

this is.

So I want to say right away, stop guessing.

Stop thinking about this.

This is not the purpose of this exercise. The purpose of this exercise

through, you know, a systematic analysis, and that's what we're doing.

distract yourself.

And I'm seeing some comments that are coming in, which is great, but, you

we're going to address it at a specific time.

So let's think about the WICA structure and the context.

An obvious change of behavior, and that change of behavior has its own mean and

trading range that has its own phase C.

All of that

so and we're thinking that we're going into phase C on the second swing down

then what kind of characteristics for phase C would we have

well we definitely want to see the volume signature

having you know a typical

diminished characteristics of the supply

between the supply and demand into phase C. So something like this. Do we have

that?

Yeah, I think so.

Look at that.

From potential phase A into potential phase C.

So we said that each swing to the downside has its own mini range.

So let's look at that and let's see and decipher some of the information that

those swings actually give us.

And specifically we're talking about this swing right here and this swing

here.

What do we see? Just look in the same way and I want you to establish this for

yourself.

I want you to establish that systematic practice of how you visually

analyze swing by swing.

These are analogous swings, and we establish the analogs here.

We establish contextual analogs. We establish the

belonging of those second swings to a much larger

swing that are coming before them. So those smaller swings are...

thinking about this swing relative to the change of behavior swing that comes

prior to that. We'll talk about this in a second.

So, same way, let's look at the point, at the percent, and

at the overcoming of the support and the resistance.

So, minus 9%, minus 10 .3%. So, we are actually

increasing.

potential accumulation here and we're seeing that not only we're slightly

expanding that swing we also undercutting the support and

not only that support but we also undercutting a long -term support right

and again we have to think contextually here phase c could we potentially

so right away we're thinking about what like of event would have that type of

behavior and obviously that like of event is please tell me what this is

correct at the spring at spring is the temporary

commitment below the level of the support and almost instant recovery up

into the trading range this definition is the definition of the up thrust that

gave you in the WTC so also slightly different you know from what you know

original methodology was telling us okay so what else do we see let's look at

the volume signature so we're seeing that the volume signature and this is

easy

increases so this means that the downward effort is increasing okay

so what about the downward result and we said that downward result we're going

to measure when we look at the bars we're going to measure through the

the bars we're going to measure through the clothes and we're also going to

measure through the intention

what was the latest the furthest the lowest commitment of strong hands

that are short in the market and where did the price actually stop

and where did uh demand started to emerge so we could look at the close of

one swing and the glow and the lowest close of another swing and then

the intention and the intention is something

also quite unique to us, to WTC course.

We're talking about what was the intention behind the effort on the

So the intention obviously was to commit to the downside and to produce some

kind of sign of weakness.

The sign of weakness would show a more significant commitment than just a

sprint. It would probably...

a shakeout where we have progressive closes below the support that's very

important for us we want to see that we want

to see that progress to the downside with the confirmation of the closes

that support so let's answer all of those questions and let's define

characteristics. Distance is increasing.

Do we have the lower close on that swing than the one prior to that? Yes, we do.

What about the intention, guys? So let's just answer this question.

The intention was to commit below the support with all of the effort that fell

in hands to the downside.

Did we commit below the support?

previous flow here's our support do we commit below no

and some of you are saying it's hard to see okay i'm gonna do this okay

did we commit below the support no what about this instance

what if we would have a bar like this and then the price would go up

what would we say then

their commitment yeah definitely the re is a commitment

but we're gonna say that this is a temporary commitment

so the price does not commit in the way of you know the bars going down

and having progressive closes to the downside right we just would have just

close and then instant recovery which would tell us that this is a spring

and we have our own spring action here where below the support we just have

tails here but we don't have anything else so again coming back to the

definition of the effort versus result effort on this swing is increasing

relative to the effort what we've seen before so there is

but what about the intention we said the intention was not satisfied so no and

we know from our wtc work when we talk about the intention intention is the

important thing if we can't commit on the uh good character or bad character

of the swing it still shows weakness in the direction of that effort so

therefore with no commitment to the downside we are saying that even with

increase of the effort there is we can't produce a favorable result for selling

so therefore we're going to say that the downward result is decreasing and

let's just solve this equation what does it mean what kind of deduction we could

make from here

What does it mean? Is it bullish or bearish?

All right.

And all of you are answering correctly.

Absolutely.

It's bullish.

And not only that, if it's bullish...

to the downside do we see a presence of the demand that is hidden in the volume

signature yes the answer to that question is

yes so this is what we have we have supply increase and we have demand

at the same time and these two forces collide and we've talked about this

Some kind of event, some kind of collision, something's going on here

there is a lot of exchange of shares that is happening.

And what is winning? What obviously demands is winning because the price

from going further down and then the price recovers up.

Orpheus is mentioning demand tails.

Yes, so demand tails also would be the indication that we...

so demand is increasing so this is a very interesting uh way

of thinking about the analogs and how we're comparing please note that not

we're comparing the swings we're comparing structures here how they

me ask you another question

answer I want you to think about the rallies in terms of is this rally

number two gonna be

So let's just kind of like go through this.

Well, first of all, we recognize that demand is increasing here, for sure.

But more importantly, we're going to say that supply is a little bit more in

control than it was here.

And this is just a function that demand came in much more aggressively on the

selling climax here, consumed that.

we had less supply and because of the less of

supply the rally actually quickly went and actually created a slightly higher

high because there is more supply here and it's not like supply

is totally in control at this point no demand is actually stopping the supply

but because of that more supply characteristics

probably thinking about the lower high relative to what we've seen before and

look how this rally unfolds it's actually lower than the one that

kind of fun to go through these exercises right because these

are simple deductions about what i would say complex observations

So what I'm seeing sometimes is that mistakes are actually made more on the

observational level rather than on the deductive level.

So therefore, you have to start thinking in these terms

and start thinking where supply is more, where supply is less,

and what kind of result it produces, and what can we conclude from that.

the character of the next move.

And Hamid is saying, I thought that the lower phase C exhausts the supply and

we're going to have a better rally from here.

Well, definitely demand was observed in the supply, but the demand

was needed more at this place than at this one just because supply was more

available.

of a lesser rally from here okay let's go to the next stage

of our analysis and this is this formation right here and now even though

structurally it has the same structure right so where we have first move down

and that move down is our change of behavior

they just have different characteristics the change of behavior in the third

example is not expanding so much to the downside so what could we conclude just

from that not going down as much so the

downward

considerably probably by you know a factor of two or more

okay that's not all right um how far away are

we from the support are we touching it are we close to that

you know and i mean this support where the previous swings actually

How about next item on our list here?

Is the volume increasing on that change of behavior or decreasing?

Well, let's visualize the volume signature here, here, and then here.

And we could see how from one instance to another, we have the diminishing

volume characteristics.

And therefore, we're going to say that supplies diminish.

and therefore we're going to say that there is less selling and if there is

selling

Look at this spread here. Look at this spread here.

And we'll take this into account as well. And then look at what we have in

third instance.

This spread is changing its structure. It's much less

volatile. This spread is diminishing.

And it's almost like we don't really see a lot of selling. What we are seeing

here more is the profit taken rather than selling.

And therefore, the selling cannot push the price as much to the downside as in

the first two cases.

All right. So what about Wyckoff context? We said that this could be a

phase C. So therefore, everything else is phase D. And we are probably here in

some kind of LPS trade.

on swing number one downward swing number one to the

diminished volatility on swing number two to the even more

diminished by multiple times volatility on swing number

three we are probably thinking that we are definitely

on trading rank we just have to see a confirmation of the reversal okay so

done that and we were comparing changes of behavior right those big swings now

let's compare those testing swings and again testing is going to be all about

phase c what do we see here well we see definitely that volume

is increasing relative to the previous

like this averages like this we have somewhat of a slight decrease in the

but yet look at the texture of the spread so this is definitely

something concerning and we would be thinking at that time that maybe some

of shakeout is being in progress maybe spring or maybe a sign of weakness but

the price commits only

This is minus 8 .3 % against 9 % and against 10 .3%.

So this is a significant decrease in phase C and how that swing unfolds.

And it's a decrease of the supply, and that swing stops around one

half of the whole formation.

So therefore...

Because again, WTC material asks us to

define the bias, to define the timing, and also to define the character

with which the price will go in one direction or another.

So what about the timing of it?

structure could we say that possibly the timing is now for the price to start

moving out of the trading range that the selling has been diminished to the

point where there is no follow -through to the downside and therefore the only

way that the price could move is actually try to overcome a resistance

couldn't do on the previous instance and that's exactly what is happening so

bias is bullish

this is just an analysis based on uh swing to the

downside based on the reactions we have not even talked about the rallies

and again in my opinion supply is of

utmost importance so whenever i look at the chart

built in into into them increases of volume signature when we where we see

selling is coming and selling is coming with more aggression so you want to look

at those places and you want to start comparing them and also don't forget

though you don't know how the price is gonna move even though you don't you

you don't know what's gonna happen exactly but Wyckoff always would say

judge the market by its own action

and this is what's so

great about our methodology literally all of the answers

in front of you if you adopt this belief and you would just religiously follow

that you would start asking yourself questions well what is the bias

based on the price behavior that we're seeing if we just look at the reactions

we see that there is less selling throughout the whole structure so most

chances, the more probabilities that the breakout will happen and will happen

successfully.

And then in terms of the character, judging the supply or the availability

the supply, we could make a judgment.

explain all of this let's do this exercise and from this picture here so

remember that we were in the trading range that we've experienced somewhat of

the last point of support trading range now the price is starting to move up

so here is our

half of the trading range and then we said that this time it's going to break

out and it did and then as we're breaking out what like event

would we be anticipating based on the breakout of the bullish pattern

which is going to develop

more bullish number one or number two

okay

and all of you are definitely correct number two is more bullish okay let's go

one by one so uh be ready to answer first of all we want to look at the

extension of the change of behavior so looking at almost seven percent and

looking at

Here is one point of the resistance. Here is the second point of the

What do you guys think?

Have we violated grossly, I would say,

the resistance? And some of you are saying yes. And we should recognize

yes, for a moment, the price committed to the downside.

But what did it do right away?

So therefore, we don't really have a significant violation of the support.

So therefore, second check here.

Okay, how about the volume signature? We would be comparing it on the changes of

behavior. And obviously, we're seeing that the volume signature is doing well.

visualize the average right so probably this one here and then on

the way down here there are only two bars that define the change of behavior

this one right here and this one right here so very easy to define the average

okay and again you could uh computerize you can

code all of that the only difficulty that you could have coding this

definition of the context?

How do you define the comparison between this reaction to that one in a very

automated way?

So obviously, you know, it's much easier and much faster to do it manually. And

obviously, you know, you know me, I'm all for basics. I'm all for, you know,

establishing, you know, really great observational skills and then really

deductive reasoning out of those observations.

and we could see that slightly supply is less so therefore there is less selling

on the change of behavior and therefore it is more bullish

okay let's go through the rest texture uh volatility has

increased right here didn't it right okay well with that increase of the

volatility what is the result and we already know that the result is plus so

know that when volatility increases and results diminishes there is presence of

the demand so therefore again more bullish okay let me ask you this

because observations are great but then we definitely want to make some kind of

deductions out of those what kind of deduction could we make

more bullish or less bullish.

of the secondary test as we go up i mean you literally could deduct and again

think about judge the market by its own action you could literally deduct what

kind of trading range we're going to have the this trading range is going to

more bullish so we would be expecting less volatility

so there is some kind of event right here so we're going to dismiss it i'm

going to say that this was an event so that's why volatility increased but if

would look through the prism of the average selling in the trading range

we probably would be saying what well probably somewhat the same maybe

less ever slightly and then look at how the price

about phase C and how reaction might happen there, you must be thinking, why

the price actually kind of, you know, hovering in the upper part of the

range? Well, it's because they don't want to sell.

They bought on the change of behavior, again, because they think that it's

bullish. They saw this as a point of value.

And then the price rises and they don't sell.

here so there is some absorption that still needs to happen here and then the

price when it goes up it quickly starts going down so there is no resting in the

upper part of the trading range so we are just basically one by one

identifying that this is a much more bullish formation so

such a valuable information

where we could define the character.

look at this bar right here

more bullish why is that again don't forget go mentally

through all of these points

okay

brian is saying less volatile i would concur with this there is less

even though it feels volatile here but there is more volatility to the downside

in number one than in number two

single bar this requires some time extension is left

number two yeah so all of those guys are correct and right away i mean like

even just from simple observations how much did we actually go from the top in

phase b into the phase c you know like from the last swing up 8

.3 and 7 .3 so slightly less

support with any of the uh you know swings to the downside and phase c we

an intraday commitment but we don't have a commitment that we have here where

there is progressive closes or at least one close

holding better holding in a much better bullish pattern so definitely from here

we're thinking continuation the texture in terms of the volatility of the spread

look into this spread and look into this spread so definitely such a huge vast

difference more bullish texture going into phase c in the second example than

the first one um and then you know in terms of the

with the recovery from phase c and we're expecting the breakout and continuation

also please note another very interesting point here

whenever i do the analysis you know not necessarily

like what we do in in classes but you know when you have your positions

on and um you know you analyze and you know before opening the position you

It's just in the classroom environment sometimes, you know, we don't have that

chance, especially for those of you who are taking WMD. I mean, like you could

see how Bruce and I, we are just, you know, trying to get as much material as

possible. So, I mean, Bruce and I are kind of like unique white coffins

almost instantly, like in 10, 20, 30 seconds, you need to give your opinion

the bias on the character.

So they are selling continuously more or longer

duration for selling.

And then that duration starts to diminish.

And then this duration right here, I didn't put it here, but 1, 2, 3, 4, 5,

7, 8, 9, 10, 11, 12, 13, 14.

So in the same 14...

bars we are making less progress to the downside

so a very useful sometimes

comparison and we could kind of analog whenever we go into phase c we could say

well it took us 14 bars to produce previous phase c this

is a little bit

Okay, so let's look at the latest trading range, right? So remember this

said that it was more bullish than the previous trading range.

Now I'm going to let you analyze the next trading range. And I would say that

this point right here is most likely a preliminary supply.

And then we have the conclusive climactic run. So therefore, this is our

of behavior.

What could you say?

about the change of behavior of trading range number two relative to the change

of behavior of trading range number one is it more bullish or less bullish

and this is a tricky one

So they're almost the same.

more bearish so we're probably thinking that the absorption is happening faster

in this in this on this change of behavior

and right away what kind of conclusions we're making out of that well first of

all the bias is still

still bullish correct okay so and then judging by the change of behavior

we're probably thinking well the structure might look somewhat similar in

of maybe like duration or in terms of the number of days to phase C in terms

how the phase C itself is gonna develop so we're looking for somewhat of the

same bullish type of behavior

Okay, well, do we see that?

Well, definitely some differences here at the beginning.

But then after that, I would say that phase C takes, you know, the same number

of days, the same time.

But something different about phase C, and whenever we are comparing, you know,

let's say a trading range to a trading range and, you know, those reactions.

So therefore, we want to compare a change of behavior to the change of

We want to compare phase C to another phase C.

And then we, you know, for those of us who are more advanced, we could be also

comparing phases B to phase B, phases D to phase D, and so on and so forth.

Analogs. And we're still comparing those reactions. So let's...

what could we say about the swing to the downside that we have in this area

to the swing to the downside that we have in this area

observation look at how phase c is resting above one half of the trading

where here we are at the low at the support so stronger

phase c interesting what does it mean if the phase

c is stronger here you know how what does it mean for the character going

forward

And this is what David is going to show us.

And use this volume and create the cumulative picture of that.

But look how consistent this supply is right here. And if we would use the

cumulative, I bet you that this cumulative volume signature is going to

than what we're seeing here.

Selling here is very sporadic, right? So selling.

Thinking about cumulatively, like this box right here compared to all of this,

this is going to be less.

And therefore, if it's less, it's still more bullish.

We've seen the bullishness in the results. We've seen the bullishness.

which the price goes up from here.

bullish or more bearish more selling on number two more bearish more volatility

more volatile deeper more rapid less bearish much more bearish uh much

greater volatility more bearish bearish bearish more selling more volatility

more bearish and so on so forth you all guys are correct if this is more

is this if this uh change of behavior

of deduction could we make from here what what kind of environment you know

obviously when we have a change of behavior that is being followed by the

of character that is uh confirming the trading range are we gonna have uh

what kind of trading rate a bigger trading range absolutely at

least a longer duration for the trading

Potential distribution, Rob is saying, maybe we would have to confirm or, you

know, the bullish bias has to fail, right?

Victory is saying wider, so more volatility, great.

Larger than the ones preceding, either longer trading range or distribution,

more volatile.

terms that we are describing.

extended so the uptrend has been extended and then suddenly we have this

so what does it mean you know this change of behavior

is not only more bearish relative to the previous you know area of the trading

range this is as richter is saying the biggest downswing since the utmost

before so therefore something more meaningful is taking place

and this reaction relative to all of the reactions in the uptrend and whenever

we are comparing a change of behavior as a reaction to something else we always

compare it to all of the reactions that have come before either on the last

climactic run or

all of those things that you guys said. Increase of the volatility, increase of

the duration for the trading range, increase of the bearish texture with

the price moves, and then the bias to be confirmed or to fail.

Okay, well, let's kind of see what happens next. Could we define the

bias out of the first two legs to the downside?

Seems to me that the result is the same.

this question what is more foolish reaction number one or reaction number

two what

is more foolish reaction number one or reaction number two and again I want you

to think in all of this systematic observational terms look at the

it's almost the same

look at the violation of the support look at the increased volume signature

what it does to the price look at the texture

how volatility is built in into this down spread

and majority of you are saying two is more bullish why

okay so the same type of the result i mean we're very close here

so that's a plus more bullish the volume signature is increasing there is no

doubt about that and there is definitely more cumulative volume on that swing to

the downside but what is the downward result relative to where we went before

we definitely diminishing on the intention we are not committing below so

of reminiscent of what we've had on our first line

So therefore, we would say that the result to the downside is diminution.

therefore, this looks more bullish.

Then look at the spread to the downside.

Increase.

Increase. Increase.

Lesser increase.

You know, maybe somewhat comparable, but still, if this is the largest bar...

is not it you know this is definitely more bullish and that's why sometimes

let's say in the practical i ask our students this reaction is bullish or

bearish and it's kind of a little bit counterintuitive how could the reaction

either bullish or bearish right well what i mean is more bullish or more

really and we could say that

is that we're going to produce some kind of rally from here.

And trading -wise, in terms of the tactics, we're just looking at the

here and looking for the point of entry.

And that's all she wrote. There is that much to that.

Okay, so what else should we be addressing here?

Swing number three.

What about swing number three relative to swing number two? More bullish?

it's another higher low we're diminishing the volume characteristics

is less selling we're diminishing volatility characteristics and now we're

thinking in terms of the white coffee and structure uh we don't necessarily

understand maybe the whole trading range here but we understand the small

structure right here and we could see that we're in the potential phase d so

therefore the rally should definitely take place

question from here if we're going to have the rally should the rally exceed

high of the previous reaction and if it does then why

because in this type of classes we are not just only concerned about

the answer of yes or no we want to understand why things are happening the

you are saying yes the intention is to

produce a sign of strength brian is saying

phase c rally should take us out of the trading

range to sign of strength from france yes supply got exhausted from hamid yeah

absolutely so look how functionality of the supply is just showing us so much

bullishness And it's not only the bullish bias that it shows, it also

the timing.

There is definitely some buying at the lows there, just looking at the volume

signature. And by the way, if you recognize, we started our bar -by -bar

analysis right here. This was the first swing that we were doing bar -by -bar

analysis. So you guys did all of the homework. Now think about this. We're

going through the reactions.

What if we do reaction comparison?

We do the rally.

by bar analysis plus we also add the layer of the structural analysis

that becomes extremely powerful okay well let's see

what happens here we are this is the next set of the reactions that we have

this was the latest reactions we said that in this mini structure this is a

possible phase t we don't necessarily understand the structure yet here Could

be a much larger trading range? Or could we actually go into the upfront or more

meaningful route here?

So we've just taken on the short -term trade that we might convert into more of

the campaign trade.

And what do we see next?

Diminished reaction, diminished reaction, ever more diminished reaction,

then, boom, right here, something else is happening.

Well, before we go into... there let's just kind of see what happens with the

progression of the price to the upside every time we have a rally there is some

kind of diminished characteristics and we call this a shortening of the thrust

that's a functionality of weakening demand

of it we kind of staying in the same type of selling until

probably this point I see somewhat of a slight increase in selling

for all of these points but yet result is not there

is there and you know this could be the demand by we can't but the latest rally

right here and we'll go through the rallies have the characteristics where

the character of the rally changes and we see the uh lack elastic behavior

on this rally which suggests that if there's going to be an increase of the

supply that type of like elastic

Is that a change of behavior?

Absolutely. And actually, if anything, a change of behavior was defined already

by the beginning.

that's it not only that when we are producing this type

saying the left most reaction on the chart absolutely correct

why because this was also a change of behavior and we do some other changes

do have some other changes of behavior in itself this could be a change of

behavior relative to uh this wedge formation and obviously if we

would compare it to reaction number two there is no comparison just like no you

know a completely different magnitude of the reaction well what about comparing

changes of behavior one and two all right so we are definitely moving

more to the downside so more bearish what about the

volume signature this one here and this one here definitely more supply

more bearish again

of this big bar and this big bar um you know which is comparable to this bar

right here uh we we could say actually yeah so that we're saying that we are

seeing the same type of volatility but there is a little bit more and by the

we are forgetting this volume signature so there is so much more selling

in general if it's more bearish robert saying expect lower highs

right there with europe so lower highs throughout and

we definitely could say more selling could lead to

said to us and screamed that the up move was done and this whole

swing then was kind of like saying we could have more selling pressure even

after that i think that the challenge was in this area right here because of

rallies that we have had and because of how some individual stocks behaved and

that was um at the same price level that we've had

on sales.

it felt at that moment that you know okay that's it the world is coming to an

end that's how it usually feels during this type of day

advanced students you know in our WTC courses to be able to do that this

cumulative signature is less

than what we've seen on

the first leg down so therefore

could answer that okay is of movement

demand got exhausted

correct absolutely less demand so for those of you who answered that

so then we should be thinking okay well why there is less demand well because

institutions are feeling some uncertainty at that point of time and

less willing to buy

is gonna stop at some point and they start deciding that I'm gonna start

what kind of character of the next move we're gonna have

so the price is going down

and there is less demand and then at some

point the let's say the news are changing

What kind of character of the rally we could expect from here?

V -recovery.

Amid the sand. Bullish sign of strength.

Quick. Aggressive accumulation on the way up. Aggressive.

It reminds me of what we've had in this rally of the COVID low.

I mean, actually, I traded the COVID low kind of in the same manner as this

chart is showing us here.

We would anticipate that because they don't have full positions on, they're

going to rush in into the market, and they're going to rush in with their

orders, and that is going to push volatility.

volatility you know to the extreme and we're going to have a very quick

most likely v -shaped and most likely our first stopping target is going to be

the value zone that we've had before somewhere here this is where we're going

produce some kind of stopping action

So actually, let's kind of go there.

Here's this rally that happens next.

So this is the reaction where we are observing less demand and less selling,

then they're just buying in aggressively, and then the momentum

price.

The logic is going to be the same.

We want to use the same systematic approach as to how we characterize our

rallies and how we're comparing rallies to rallies.

And we're going to start with the same trading range. So let's look at the

rallies.

And here also we need to contextualize rallies, right? So out of phase C,

those are going to be the rallies that we're going to be...

With the rallies and with the demand, it's slightly different. It's not

necessarily the same comparison as when we're comparing reaction to the reaction

of supply to supply.

Why? Well, let's see.

First rally, 17 .5%, slightly overcomes the previous high.

That happens on somewhat of the...

Usually with the rallies, we're going to have more demand at the beginning of

the rally because this is where they are buying, and then less demand as the

rally unfolds. Why is that, by the way?

Why would we see on the rallies usually less demand or less volume signature in

the second part of the rally?

less willing to buy so therefore their buying diminishes and that volume

signature usually starts to diminish we're going to talk about this in the

session when we're going to deconstruct this swing so the first

momentum signature is very important you kind of want to compare it and you kind

of want to see with that comparison with that type of demand what

kind of rally are we

myself here David is gonna show you this guy so I don't want to ruin you know

that type of the introduction but still you know we could talk about

the demand signature and the result

of supply lack of supply absolutely correct and we've defined when we looked

this reaction compared to the previous reaction we said that there is less

selling if there is less selling we said that you know potentially

we could have a better rally better rally in terms of the percent not

necessarily in terms of the comparing where it could go right so we said that

whatever supply was here it was increasing so we most likely not gonna

this high okay well then what happens with the third rally 16 so they're all

the vicinity they're all kind of the same looks the same right in terms of

result but demand is even less so what does it tell us about

okay let's look at some of the comparisons you know within the

whenever we talk about trading ranges we talk about the

volatility of the trading branches right and the less volatility the better it

is for the bullish scenario looking at the phase b rally what

could you say the volatility is doing just based on those routes

so here is our next uh slide here with the rally comparison so

we were doing 16 we were doing 18 the previous rally was 17 and a half if i

remember correctly now uh that supply is less what

is our expectation

franciscan is going to be better equality is going to be longer in

and that's exactly what we have we've observed the supply

by strong hands and now supply is in control of strong hands it's very

conceptually through the volume signature think about what kind of

have in this area on the rally

some profit taking and you know somebody was asking what's the difference

between the profit taking reaction and distributional uh you know more of the

change of behavior well selling comes in and then the price recovers almost

instantly selling comes in price recovers that's your

intermittent profit taking on the way up and you know uh institutions

constantly show this type of behavior because

Whenever one or two or multiple stocks exhibit high profitability, that

weighs on the portfolio in terms of the percent of commitment that these

unrealized gains on the big winners play on other positions as well.

So it's kind of unnatural to me what they do because they basically say,

we are overexposed in this leadership stock, so let's just take some profit.

and they would take maybe like 10, 20 % off.

Now, retail traders obviously don't function this way.

Retail traders base a little bit more on kind of like the emotional component of

the greed.

If it's going up, why am I closing it? Why am I taking the profit?

I think that a better strategy than those two is going to be a hybrid, where

as the retail trader...

understand, you know, institutional reasoning for taking the profits and you

that to your advantage. So, you know, in WTC classes, I'm obviously showing you

how you scale in into the position and then how you scale out as well, how you

take profits.

But you've got to take them anthropologically.

Such a...

going to go low because they will no longer be buying

or their add -ons

are going to be smaller so therefore overall volume signature

on the rallies could go down a very important point that is being so

misrepresented in technical analysis in general

it goes down is confirming the price movement up and not only that it's

confirming the character where now all of the reactions are much less than what

we've seen at the times where supply was much more present if anything the

character and the texture of this rally is the ultimate

I see a lot of questions, but I'm sorry, I just don't have time for this right

now. So just prepare all of your questions for session number three. And

just have two and a half hours for session number three. I just feel like,

know, there's so much more material. And there is much more advanced topics that

I wanted to talk about. And I see that, you know, we probably have to either go

to series number two and three.

to address those or I'm gonna maybe going into the new year just have it in

practical okay so let's look at the rally 11 .7 13

% another point here the steepness of the rise also matters right

so the angle of the rise look at this angle and look at this angle

into our P &F target number one if it goes into the overbought overthrown

conditions this is where we anticipate some kind of change of behavior

shortening of the draft and again look at the texture here it just

basically tells us that this is a trending environment so volume is

to us on the rallies and on the reactions that we are in the trending

environment but you are completely correct shortening of the thrust and

with that uh first change of behavior

Something very interesting about the reactions in the rallies.

Usually in the first part of phase A, I'm sorry, in phase A, in the first

half of phase B, this is where volatility is going to be the largest,

highest.

Same here.

So look at how from 4 .5 we're going to almost 10, 10 .5.

We're expecting that volatility... will be high both on the upside and on the

downside upside and downside so keep that in mind as well but

obviously again we want to compare all of these

points when we are discussing the rally so let's look at the latest two rallies

they are somewhat the same

What does it mean?

Well, the effort to the upside, so

let's say this is 2 and this is 1, is decreasing.

And what is the result of that rally? Even though it seems like it's larger,

does it overcome any points of the resistance?

No, it's actually a lower high.

So the intention for the rally is not being fulfilled so the result of rally

number two is diminishing as well we are diminishing effort to push the price up

above the point of the resistance and we are decreasing results bullish or

bearish

And that's on the background of our analysis already of the change of

itself compared to this change of behavior, which suggested a much more

profound...

those of you who are really into this stuff and you have time

i want you to rewatch session number one and two now and

make notes believe me this is based

on already you know an extensive 10 -year experience of me teaching this

material

It's worth it. If you have time, absolutely do this. If you don't have

just do what you can with the homework that I'm giving you on the slides.

So your first homework is simple.

Just review and, you know, I'm showing you bar -by -bar analysis for the

homework that I gave you last time.

And there are quite a few. We said, like, what, 140, something like this,

bars that you have to go through, right?

Definitely check this out.

If you have any questions, shoot me the question. We're going to have the Q &A.

Here is your second homework from last week. And here is your third homework

from last week.

So as you could see, for those of you who are new to Wyckoff Analytics, I'm

of pushing everybody to work, right? So pushing everybody to improve.

So you have to work here.

So that's homework number one.

so just review and homework number two is your swing by swing tape reading and

kind of started combining this so this is the continuation of this chart

unfolding picture so here is your reactions

And here's your rallies.

so here's your homework number two and you're just applying your analysis that

we've done throughout this session if you can watch this recording again

make notes send me your questions that's your homework guys and obviously the

review of the previous homework all right well with that we are done for

interesting things that were not on the agenda in this uh two sessions so pnf

and volume uh horizontal volume i'm gonna give you you know some

of the swing maybe i'll you know actually leave this out of this so we'll

some case studies so i'm gonna show you you know what kind of practical

exercises you could do on tape reading um you know i'm probably gonna leave

out reading the momentum it's a little bit more complicated

But we'll do some case studies.

And we're going to look at the current market analysis.

We're going to do some Q &A. Oh, by the way, bonus session. No, let's not go

anywhere. Let's just finish this up.

This is going to be most amusing.

All right.

So here is today's date.

This is a one -minute chart. I was actually trading it as I was working

Bruce on the newsletter. Check that out, by the way.

Wow, we are putting so many hours, so much quality material that goes in those

newsletters that Bruce and I create each week. Right now they are for free, but

in a week or two, that's going to be a subscription, so you might as well just

check this out.

So as I'm working with Bruce, and that's what's so cool, it kind of felt as if

we were trading together.

What do you guys see?

Reaction number one.

number two just now based on the material that we've done today what

could you say about this to reaction okay let's just say reaction number two

less bearish to is very

bullish more bullish more bullish based on what let's just see

how you understood this material

volatility left supply absolutely volatility goes down left supply

so there is left selling okay

high low look at the volume signature right so diminution look at the texture

laborious move down into a high low whereas here volatility is

obviously

So therefore, we know that with that, we are expecting some kind of rally.

And then you have to go a little bit on the multiple time frame analysis and see

where we are going to be rallying from and potential points that we could

And what was cool, so my point of entry was right here.

And I was actually expecting this reaction, but I just don't have time.

so cool as we were working on the newsletter and i was like you know bruce

i'm in a position uh have a look and then he's like well you know let's

calculate it on the pnf you know if you're expecting the rally and i told

right away i'm expecting that the rally is going to overcome this high and he

said okay let's just

so this was the cluster where the price should have gone now um i don't exactly

know you know what bruce calculated this or both of the segments or he has

extended it further but he gave me a target of 11 940 and he

said well i took extra couple of columns so maybe it's slightly less so like 11.

by bar analysis for the points of the entry with you know other like

often layers like context of the structure context of the target

you know could bring this type of the results and you know this type of trade

all right guys that's it this was a little bit of a bonus today for you to

how you could

wave by wave analysis on the intraday