Original subtitles

Hello, everyone. Today is November 5th, and this is session number nine of the

practicum course.

Next session is in November 12th, 19th, and 26th.

Announcement. This Thursday, we're going to take off on the journey.

The journey about volume and momentum and how they create

structure.

It's not the relative strength. Relative strength only confirms what momentum is

doing. Momentum confirms only what effort is doing and

what effort is winning, and we want to catch that moment. So we want to be

before the institutional momentum kicks in.

We want to be in the very, very early stages of opening the position.

I think this is the next step for us as a community, right, to find a much

earlier point of entry.

So we'll work on that.

I'm excited that, and John is here today, so I'm excited that John's going

you know, intermittently here and there.

We're going to use him, you know, and just kind of produce some kind of scans,

probably second, third session.

The first one is going to be more theoretical, you know, just the

But this is going to be really, really like a discussion in depth conversation,

you know, research on the momentum, velocity, volume,

how that influences the structure and why the structure is being created that

way. So kind of like a much deeper understanding.

So for this class, this is almost like a mandatory special that you guys have to

attend because we are going to talk about exactly what we talk here.

For today's session, we have a mini presentation by Dmitry on his current

positions. I just looked at that and I thought, okay, well, you guys always

to know what your peers are doing. Speaking of which, by the way.

This website is driving me crazy with all of these things that need to be done

for the new website.

So I keep promising people that we're going to launch, we're going to launch,

but we're still there.

So hopefully in 10 days, two weeks, we will.

And that will be an opportunity for you to start communicating with each other.

That was probably number one request from the community. We want to talk to

other. We want to connect.

We want to share our experiences.

So in 2020, after the launch, we're going to add to that. We're going to

like, more communal tools so that you guys, you know, just chat and, you know,

all of us communicate at the same time.

All right.

But I thought that Mitri's logic on some of the positions was very interesting,

so let's just go through that. That's number one, as usual, bias game, and

probably produces the most participation from this particular class.

I think you guys are taking this more seriously than other people, and I love

it, because that's how I am.

WTC is still, you know, people are...

getting into the knowledge so they don't really know how to analyze

systematically, you know, using Wyckoff method.

But you guys at the level where a biased game is a deep game, you know, it's

kind of like, you know, I see at some of the things that you send me, wow, I

don't even go that deep.

Not because I can't, just because I don't have time.

So it's an extremely useful exercise.

Please continue doing this.

I'll go on through this exercise.

And I want the numbers.

So whenever you send me the next email, and we're close to the end of the

semester here, session nine, so not close, like 30 % is still ahead.

So what we need to do is we need to understand where we are with that game.

I want your numbers. I want...

out of nine homeworks that i gave you as a biased game how many of those did you

um did you do correctly so please send those numbers to me in your emails i

would appreciate that anatomy of the trade ttd trade uh death we're gonna

quickly look at that um i just want your opinion you know as to what the class

wants to do there uh and we'll use one of the homeworks to analyze it Q &As

throughout market update will go really quick. There is really nothing there of

extraordinary value for us today.

But there are some spots there like Bitcoin, gold, you know, something that

some kind of resolution. I placed a hint of that.

And then we're going to go into the exercise seven. I hope that we will.

That's going to be on the selection. Last time we didn't, so I want to make

that we do today.

All right, as usual, everything is for educational purposes.

Stop the recording and read the whole disclaimer.

All right, well, with that, let me find Mitri.

Hey, Mitri, how are you doing?

Hey, good, Roman, how are you?

Yeah, I'm doing well.

All right, well, let's look at two of your trades that you...

have done, and please walk us through the logic of the trade, you know, why

you're selecting this particular stock over other stocks, and then where are

we structurally at the point of entry, what was kind of the conclusion, what

the volume price bias?

Definitely.

First of all, really excited for the website, Ramon. That's going to be

Thanks for giving me the opportunity to share my, to my trades. I think it's

going to be great for the, for everybody. And also guys, feel free to

comment and let me know like what you would have done differently.

Maybe Ramon can talk about a few of those comments too. It really would help

So for my first one was VIPs, VIP shop holdings.

By the way, guys,

These two trades that I'm going to talk about, I got these ideas from WMD, the

Wyckoff Market Discussion.

I took the scanning class. I do a lot of scanning on my own, but I think that

the Wyckoff Market Discussion is a great place to get ideas, especially if

you're relatively new to Wyckoff.

I just wanted to mention that it's a very valuable class to be in. Thank you,

Mr.

For the reaccumulation that's going on here in BIPs, I identified

the trading range, right, and I labeled everything. I really liked the shakeout

spring phase C here.

I thought that that showed a nice institutional presence and demand to get

I have a common theme, and you'll see with the next one.

When we have phase D, I saw a reaction

to that last LPS, and I saw that reaction happen on very minimal volume.

So I did not see a lot of heavy selling going on there. I also noticed that

there was relative outperformance through many of the metrics that I'm

looking at, and I also saw that the momentum was.

And speaking of momentum, I'm very excited for the November special, Ramon.

Let's do it.

Yeah. So I made a place to trade, sorry if it's small there, but a point of

entry at $9 .15 on that bar right there.

I just felt like this was a good trade for me to take. I felt

confident in my analysis, and I placed the trade.

And so far, it worked out really well for me. As you can see, we had

a big S -bar recently, and we're consolidating right now.

So one quick thing I'd like to mention is I

tweet when I enter trades, and I like to do my analysis with the

point and figure and the chart.

As a sense of accountability, it's part of my process.

So if I enter a trade, it's almost like I have to do the point and figure count

and I have to do the analysis on the chart. And I

just like it just kind of reinforces the fact of, you know, my trading process.

So I just wanted to mention that.

I actually exited the position today, not because

I think that the position is deteriorating, but I actually wanted to

capital elsewhere.

We can take a look at it today. I think it's still in good shape, but I had a

relative outperformance doing great.

I had another position that I wanted to get into.

I wonder what was, just out of curiosity, I wonder what was kind of

cost and benefit analysis for you of closing the position that is actually on

the way and your targets were somewhere here in the long -term range between 15

and 18, 19. So that makes a lot of sense. When PNF shows that, that's so

awesome.

So I wonder what was that dialogue in your head, like should I close the

position, should I not?

How did you resolve this?

It's a great question, Ron. I was going to ask you about this. Can we look at

this talk?

Let me just comment really quickly on this because a lot of you guys,

including myself, are becoming more and more accountable in front

of the community.

And what that does, it improves your analysis.

Not always.

Not always. I see some people tweeting out, you know, and kind of like it's

just, you know, who kind of like went through our system and education.

And then it's just nowhere.

I mean, obviously, here we have a different example.

So I really like that sense of accountability.

I think we were going to.

maybe create a much safer place for us to be wrong and to be okay without that.

So forums are going to be the place for us to kind of, you know, have our

small circle where we would be okay to be wrong.

I just want people to relax, you know, and study rather than just like be

always, oh my gosh, if I'm going to post this chart.

What do people will think about my analysis?

People will think about your analysis is that you're brave by posting this

because majority of them will never do that. And majority of them will always

doubt whether I'm right or I'm wrong.

Should I post? Should I not?

So hopefully, this is something that we will be able to do as a community.

Speaking of forums, and I'm giving you a small preview of the website.

Still working on a lot of technical stuff. I will ask the community to help

out with some QA once we launch, once it's live.

But let's go to forums really quick and look at these threads.

And I was discussing this with Franz because Franz is going to be behind kind

like the forums, checking on the ethics.

I want to make sure that our community is respectful.

There is no bullying.

There is no bullying of any type of the analysis that you post.

I will make sure that, you know, our team is very, very vigilant about that.

There will be nothing of the sort where somebody comes and just says, oh, this

is all wrong.

This type of members will go away.

So this will be a very safe place for us. But looking at the threats, what do

you guys think?

Really quickly, just, you know, type in if there is something that, you know,

you think that we should add.

Obviously, I want us to reside, you know, in this discuss charts, analysis,

trades. I think, Mitri, I'm going to change this.

Discuss charts, trades, and analysis.

So something what you're doing right now I think will be highly appropriate, you

know, to post a chart like this and then just like, guys, what do you think, you

know?

Yes and no. What are your thoughts? What are your, like, you know, thoughtful

ideas? Not something like, oh, yeah, this is great.

You know, let's be thoughtful about what we post as a community.

Crypto and market analysis is just because there is a lot of interest in

crypto, so I just want to let them be and kind of, like, you know, populate

that.

John is going to be probably residing here a lot.

WICA filtering and scanning, and hopefully John will be just posting some

scans and some of the results of the scans. I think this is going to be very

popular. Some general administrative things. And then for each class, we're

going to have a protected thread. This means that nobody else

but us in the current class, only in the current class,

discuss what we want to discuss.

And that's kind of like type of approach that I want to have here.

Email me and let me know what your

suggestions are.

I really like Eric's comment here. He says, I like it.

Focused threads, but not too many. Gets too diluted. And that's exactly the

point that I had for the developers. I said, i don't want all of these threats

just want maybe like five six no more than ten and then um to kind of

have more discussions in one thread rather than like in like hundreds and

and dozens um rick is saying i want to help forums rick Shoot me an email. I

would love to have more help on that. And I'm sure that we could find the ways

to help in different ways, not necessarily with forums. But if you want

involved with that, you know, I'll connect you with fonts and, you know,

guys can figure out maybe just like, you know, how we can do this.

Maybe also place for alumni of past classes from Sharon. Yeah, absolutely. I

mean, as an alumni, you will be able to, you know, comment.

any of the threats here not necessarily in the current class I kind of want to

keep it you know very tight to that group to that particular group but any

threats you're welcome to to comment how about a body of knowledge area for

instance FAQs how does accumulation reaccumulation look like from Marvin

well the body of knowledge is all here under the Wyckoff method

And we have the same article that, you know, translated into

Spanish and Chinese.

So here's how it looks.

That I'm really pleased with, the design. So you have quite a lot of

here. This is in 19 or 20 pages of PDF file.

So check this out.

Do many of the White Coffin follow trade gold?

Okay. Well, and this is exactly the type of questions. Like, do any of you

follow trade gold?

And if you post it on somewhere here, discuss the chart, or

it's even better if you post your analysis of gold and then, you know,

start the conversation that way.

So then definitely.

But probably, Arvind, if you're thinking gold as a threat, probably not.

Again, that comment from Eric about dilution of the material, I think it's

valuable. All right. Well, sorry, Dimitri. I'm just kind of like jumping

over. No problem.

Let's come back to the logic of the trades here. So we were talking about

the cost and benefit.

switching the positions you know let's say if um and i always kind of in this

position as well i always feel even though i have maybe like um a dozen

positions right now um i always feel like i wish i would have more capital

because i always see opportunities so i always want to kind of like be deployed

um so what is another stock if you don't mind me asking

Yeah, definitely. So my intention actually was to play this other stock

quick swing trade and get back into this trade, and we can talk about after if

that's a good idea or not. But the other stock was MIK Michaels, and yesterday

night I was doing my – I'm sorry, Nike?

Did you say Nike?

Oh, well, Nike is another position, but no, I said MIK Michaels, M -I -K.

So yesterday – yeah.

Yesterday, Dimitri, are you there?

Dimitri? I really liked the reversal bar.

Dimitri, are you there?

Hey. Hey, sorry. Can you hear me?

Yeah, there was some kind of disconnect.

I don't know if it's just on my side or on your sides as well, guys. So

not sure. Sorry about that.

I think it might be on my end. Okay, so you were – we kind of like

probably lost the last half a minute.

Could you please repeat?

Sure. Sure, definitely. So, like, yesterday night I was scanning, and I

liked – if you zoom in maybe to, like, August through now on this chart, I

really liked the fact that it – again, another common theme is the

low volume signature.

Well, first of all, you see a lot of – yeah.

And then you see a lot of volume on the buying. And then that last reaction.

um, in right before November started, had a very, uh, low volume signature.

then last night I saw that reversal confirmation candle.

So that like right away this morning, I decided to hop out of Vips and

into Michael to just ride it up, maybe at least to 11 and then hop back into

Vips. Now I, It might be a dangerous game I'm playing here, and I definitely

open to feedback.

But, yeah, I wanted to get some exposure to Michaels, and all my other money is

tied up in my next trade that I'll talk about and also Nike calls.

Okay. All right. Well, guys, what do you think?

I mean, like, what's your thought here? So, basically, it's a very interesting

exercise.

kind of like intellectual exercise on what would we do here?

Why are we changing the direction

for the selection, going from one stock to another?

So let's put them together really quick.

There should be some kind of probably technical reasoning as to why get

from one into another.

I mean, obviously you're anticipating more potential here, but then you are

saying that you want to get out at 11?

Yeah, I just wanted to get into Vips.

I'm sorry, I wanted to get into Michaels for just a quick swing trade.

I always have my screen open at work, so I was going to just keep an eye on a

breakout on FIPS and get back in.

Okay. All right.

Well, let's see.

Eric is saying, juggling the rise between two stocks with limited capital.

You are so good. Okay. Well, I'm assuming, Eric, this is a compliment.

VIPs, you're expecting a backing -up action. And MIK, you're expecting a

strength rally, both concurrently. So if they both time with each other, great.

But, and something else obviously is coming.

Okay, well, I think that we kind of get the sentiment here.

What would be my recommendation?

Well, I definitely see a lot of great signs here. It feels that this momentum

will continue.

So I probably would be thinking that not just $11, but if I'm going to go into

this trade, let me kind of like be carried above the moving average. So

even above 12.

I mean, a very short term trade is probably available here with high

probability. And the low probability is that it goes to 11 and then fails and

then creates a much larger trading range.

I still would prefer.

probably to stay in this position more and be more exposed.

So I would probably just say, okay, well, let's get rid maybe like of one

-fourth of this position, maybe one -third, maybe one -half.

Like still leave the money in the position that is doing so great for you

technically does not show yet elements of the distribution or local

reaccumulation. Plus you have some targets that are higher going to 15 and

zone. So this is a really good return here from 11.

So you're thinking from 11 to 17, and here you're thinking from maybe like 9

to 11.

So the potential is slightly different.

So that probably would be the only recommendation is just to keep the money

the winning position if you still have more potential and characteristics are

still there.

And then if you want to get into a new one, well, you know, take a little bit

money, put it in the new position.

So probably that would be my recommendation.

What do you think about this, Dimitri?

I think that's a great idea and definitely probably what I should have

The one thing that you mentioned when you were drawing on the BIPs chart, what

was anticipating was a slight pullback to the area of support,

kind of like right there.

So I was thinking like, well, I have limited capital and I'm actively

these charts. Maybe what I can do is pull a fast one.

Get out of VIPS really quick, ride that wave up in Michaels, and then catch that

dip on VIPS, get back into VIPS.

Right. I think, you know, I also work in nine -to -five jobs, so. Of course,

yeah. It's amazing that you could actually track all of that like this,

with nine -to -five jobs.

So, okay, well, let's see how. It's too much sometimes.

Right. Well, let's see how it's going to develop, right?

So I think that the key.

that we want to get out of this particular discussion is when you're

when you're in the profitable position and the trend has just established, so

you have your sign of strength, major sign of strength, you're a little bit

early in the trend, right? So this is your CEO relative to phase A here.

So this is the whole trading range and you're just kind of barely getting out.

So I wonder if the major sign of strength is actually going to be that

that you had, you know, $15, $17.

And then there's going to be a much more meaningful reaction.

So kind of thinking out loud here, what would I do here? I probably would still

wait and try to get out somewhere here into the target zone,

into the climactic action. There's a little bit of the supply here.

But, yeah, run.

Run the winners more, and then it's not that this is not going to be a winner,

but, you know, already here you're established. You know, you're in the

position.

All right. Excellent.

I appreciate that, Roman. And I think that you've said this before in the

especially if somebody has a nine -to -five job, it's probably better to take

the longer -term swing trades than to, like, juggle back and forth all the

So I appreciate the feedback.

you have a lot of energy and you're able to watch while you work, which maybe is

not available to other people.

So for you individually, I mean, I don't mind, you know, like giving an advice

for you.

Like, yeah, you know, go to another position if you want to just think about

money that you already made and potential money that still could be done

VIPs. So that would be the only thing. Hold on to your awareness longer.

and get rid of you losing positions faster.

Okay.

What about the second one? Thank you.

So this was Crescent Point Energy.

I've been following your work, Ramon, on oil.

Right. And I got really excited about this one. I love the causality that has

been built since around late 2018, early 2019.

Another one discovered on Wake Off Market Discussion. So I'm telling you

if you guys don't subscribe already, it's probably the best place.

And let me advertise the WMD correctly with this comment from Mitri.

Yes, please sign up. Yes, please take analysis that we present and make your

own judgment, and that's what Mitri is doing. But I also want to be frank.

as always with you guys, and honest, because I'm a trader, and I know that if

want to be the best trader that I can be, I have to be brutally honest with

myself. So not all WMD calls work, and you know that.

So you still, even though we are presenting, you know, here is an idea on

energy, and we're thinking like... out of, let's say, 10 stocks, we are kind of

like, this is our watch list for the energy.

And then your job is to go deeper into this, analyze deeper, find our mistakes,

you know, and, you know, make sure that you are responsible for your last

choice. Okay, great.

Yeah, definitely.

Again, just like I was saying earlier, I saw a major sign of strength in late

September, and I saw the diminishing volume on the pullback after that.

So in my head, I thought selling is going down as the price is going

down, so maybe not so much eagerness to sell anymore.

I saw that intraday trading range develop, and I got in.

at some point in that trading range.

Now, Crescent Point Energy ended up having earnings, which produced that gap

down, and full disclosure, I actually got stopped out of entry number one.

At the same time, after that bar closed, the

second to last bar on this chart, I noticed that Oil futures were at the

of their trading range.

And I anticipated, if you can go to the oil futures chart, but I anticipated

that essentially, so when was this?

Daily?

Yeah, daily.

Yeah, so.

Right before that significant S -bar, like right in November, yeah, right

So I saw that position in oil futures, and I've noticed that

price -to -point energy is obviously very correlated with the price of oil

futures. So I decided that I made the decision in my mind that

we were, for CPG, that was actually an LPS. I saw the high.

volume signature on that day right there, and I saw the demand table.

And then the next day, in the intraday time frame, I made a second entry,

and I deemed this as an LPS.

So right now, the chart's not updated, but it actually is doing pretty well. I

think it's closer to $4 again.

Open to suggestions on this one, too.

Well, let's definitely give some of our comments to Dmitry.

I was in this position as well. I opened a position somewhere here, closed it

out on the way down. Did not like how the supply started to increase because

basically have to analog.

the latest rally to the previous rally that we had of kind of the same

the same quality so i wasn't seeing a lot of supply coming in on the first leg

down so that was the reason for the exit so this became kind of like a very uh

you know quick trade uh for me in this particular stock but i really like uh

dmitry's analysis and logic here look at how the price actually moves down.

I said that I was looking at this.

Yes, there's definitely a little bit more supply that's coming in. But at the

same time, look at the texture with which the price travels.

Spread diminishes, and then the volume starts to diminish as well.

So all of that are bullish.

Plus, we have two legs to the downside here. We have two legs to the downside

here as well.

but they are incomparable, and the reaction here is much smaller than in

previous instance.

And I would totally concur with Dmitry. This looks like a demand coming in on a

spring that is in the structure of the backing up action,

and we have this trading range, and it was a gutsy entrant here

into this position re -entry.

But at the same time, you know, if we would look a little bit closer and we

would just say, well, let's just put our Wycoffian glasses on, so to say.

And then it just becomes so evident on this date right here, on the

day, that that was potentially a spring.

High volume signature going into phase C.

a lower volume signature relative to phase A and B.

So that just tells us that there is a local supply that has been observed. The

price quickly comes back.

And now we could anticipate that it's either going to consolidate here, try to

retest the highs, or it's just going to start moving up.

Okay, well, Dmitry, let's definitely see how that's going to unfold.

Should we look at Nike?

Yeah, I'd love to.

Thanks. I don't have a slide on it, but... Okay.

Great. All right. Well, and again, this is something that, you know, we've

discussed in the WMD, so I think that maybe this is where it's coming from as

well.

2018, no reaction.

2019, especially second leg down.

goes into the oversold but much stronger than the market um you know on the

comparative basis so shows up here on the relative um and then definitely

momentum so uh this was a good point of entry and then the range and going

into august again we're exhibiting that you know emergence of the strength right

here this would be a good point of entry and now i'm thinking dmitry that um

you're probably looking at this as a potential sign of strength in the

-up action.

Yeah, and just to circle back to that point of the backing -up action, Roman,

did the Wyckoff market discussion and the backing -up action together.

I got this idea from Wyckoff market discussion, but additionally it came up

my backing -up action scan in the September special. And that's the best.

And that's the best.

You take somebody's idea, and I had a student today that emailed me, and I was

asking her, well, how did you do, you know, in 2019? And she said, well, you

know, I'm positive but not extremely, you know, taking on some of the

advices and then just kind of like not following on my own analysis.

Please make sure that all of the positions that we discuss in any of the

classes. That you analyze yourself and you doubt me.

Doubt me.

Doubt Bruce.

Doubt anybody who comes and tells you what to do.

Because I do that. I always doubt what people say about the

markets because I don't necessarily want to be

subjective like this and kind of take it.

for what it is from other people.

At the end of the day, you're buying or selling.

So you've got to make your own decision and be responsible for that.

So with WMD, it's kind of like that.

You still have to filter what we go through, and we go through so many. So

are definitely mistakes.

Okay, well, Dimitri, a question here.

Rick is saying, don't worry, we will check you on Bruce. Yeah, absolutely.

Please do that.

Eric is saying, can you comment on volume profile of backing up action?

what do you think about that increase in volume?

I definitely, it was a little concerning.

I see that the supply definitely came in, pushed the price down.

but I see that the price action is starting to level out right at the area

previous resistance and new support.

All right. I definitely would say that this was a gutsy entrance for me. I

actually bought some January 2020 options on these.

What is the strike price?

They were $92 .50.

Okay. So slightly out of money?

Slightly out of the money, yeah.

Because I think that it's just my risk tolerance, I guess.

What is your expectation here for, I mean, from now to January,

which is going to be January, what, 17th, 18th, I think, or 20th, you know,

expiration, somewhere there?

I have to check. I forgot.

All right.

Because on this stock, obviously, you could have the weeklies as well. So you

could have any week.

So you have about two and a half months.

17th January.

The month is January, yes.

So what are you anticipating? When you guys are building that type of position,

leveraged position with options, and the only reason why...

I can talk about this is because I'm directionally trading options as well.

Also trading options, I started trading options for hedging purposes, and that's

been going really well for me.

I kind of see the value of the theory now in practice.

I will bring this material more and more to you and will push you to think this

way.

But what is here the expectation?

based on the technical analysis picture.

Are we expecting a quick move into November, December, into the end of the

Is that what we're expecting here, Dmitry?

That's what I'm expecting, yeah.

Okay, and that move would go obviously above 92 .5, but would it overcome, do

you think, 96?

I anticipate it overcoming 96. I was going to deploy some trade management

it got to that level.

My stop is a – actually, I wrote it down in my log. My

stop is if the price goes below the start of the gap.

So I kind of – yeah,

or the open of that candle.

Right. So you're taking it from here?

Yeah, yeah, yeah.

Because the gap started right here at the close of the previous day, just FYI?

True, true, yeah.

So, yeah, I mean, I'm anticipating that this is going to reverse. It might

consolidate at the support a little bit and then hopefully.

And that's kind of like what I'm trying for you to see right now.

The question about the volume was very interesting, and I think the question

about the volume is very relevant here because we're discussing options

position. We're discussing the position that might go up, but how quickly? Would

we still be in the consolidation? What if the structure does this?

Let's say maybe like late November, maybe something like this, early

So your premium.

on the option is going to deteriorate during this time right because i mean

though we're going to be let's say from time to time above um our strike price

um it's still probably in this type of the scenario we're still not going to

have like an acceleration of the premium um the reason why you know it's

important is because we have an still overhead supply that we're trying to

observe where where does it come this bar right here for sure there's a lot of

supply that we see here and the selling that we see

predominantly just on these two bars there is no more selling after that i

if somebody is selling this is not aggressive selling if we would just take

we would see that volume is diminishing

And spread is diminishing.

And the price goes into the support that acted before as the resistance.

Those are the elements of the absorption. Those are the bullish

But we still need to work out through the supply.

So that would be the only question that I have here.

How do we deal with this, right? What's the solution?

Or maybe not even a solution because I think selection is good, timing is okay.

not maybe like the best, but still okay, and only because of this possible

scenario, because we could retest here.

Possible solution here, if we're thinking that maybe there's gonna be

of like structured development of the BACNAP action, is to think about

longer expiration, right? So maybe think about much

expiration.

I know that the premium will go up.

So your size will go down.

But what it does, it gives you a little bit more kind of room to operate time

-wise.

So any type of directional trades where you have less than three months in

auction life left, you gotta be in the move that happens now,

right? So you have to go in here, and then exit here you have to go in here

and then exit here or here you have to go in let's say somewhere here and then

exit somewhere here um you see what i mean it's just that that duration of the

swing trade uh you know has to happen that way so there should be like a mini

built -in before that you know like mini causality and i think that's what

exactly we are you know building here i'm very curious how this trade is going

to unfold there's definitely some probability that it will go up from here

through the resistance uh why well just because of this latest action right here

on the spread all right great um dmitry what else what

other thoughts we have about you know all of these positions

as a concluding thoughts

My only thought is, boy, I wish I could do this every week.

Thank you so much, Roman, and all you guys for giving me the time to go over

positions. And, Roman, I'm really excited for the website and the forums.

think that's going to take the Wyckoff community to the next level.

I hope so. I hope so, yeah. We're working really hard, guys, and we are so

-tech. you know with our team so it comes really hard for us uh but we'll

we'll get it you know i just you know i just want to make sure that the

first version that comes out has the functionalities that we need And at the

same time, you know, it has a lot of communal tools that we could use and

we could build on the website.

And actually, I'm going to be talking to community more and more about the

website itself.

I think, you know, as we're building communal tool, I need your help.

So that's just basically how it is.

Dimitri, thank you so much for the presentation. That was awesome.

All right. Thank you, Roman.

All right.

Well, with that, let's come back to our.

Class. All right.

Let's quickly talk about the bias game. First, a comment from a student in this

class. I'm not going to reveal who this is. I don't know whether that was said

to me only or whether this could be said to the class with

the name. So I thought that maybe like more anonymous way. But this is the

sentiment that you should be having right now.

And this is the thought.

As you go through each homework on the bias game, you have to think this way.

What does this student say? I must say that the bias game is

humbling. And I love that because markets always humble us really quick.

And the more I trade, the more I invest, the more I understand this concept.

If you're not...

Humble. If you're not listening to what the market is saying to you, either

about the analysis of your execution or maybe like your emotional execution or

the process itself, you're not learning.

You're not improving.

And therefore, you're going to make more mistakes in the future and your trading

is going to be kind of the same.

So you have to stay humble.

it absolutely reveals the degree of comprehension or lack thereof of the

material. So true.

And that's why I want to know how many of them did you get right and how

many of them did you get wrong.

I think it's a very good barometer of where you are analytically. Not

-wise, not process -wise.

Not emotional escape -wise, but more your analysis itself.

And I would say if you are on this bias game below 40%,

you should still keep paper trading and keep working on your analysis.

If you're above 40%, please go ahead and trade.

Hopefully my results get more consistent as I keep doing them. They will.

But more than being right, what I really strive for is being right for the right

reasons.

Love it.

In a way, when Mitri was talking about his positions and this idea of switching

from one position to another, as a speculator, oh boy, I do understand

Sometimes I see so many opportunities, but I have to think.

through those opportunities also in terms of the cost and benefit analysis.

And we kind of were doing this, right? We were comparing two stocks, and we

to be in one or another stock for the right reason.

If we feel that the other stock will outperform significantly, then most

definitely yes.

If we're just seeing that, oh, there is a trade available here, that doesn't

excite me.

There are...

thousands of trades available each day.

Probably not thousands, probably more.

So how do you choose the one that will go fastest, longest,

and is going to have such a P &L influence

on your equity?

That's the one we are looking for.

Enjoying the process and keeping the faith that this will start to gel over

and much more practice.

It will.

And the reason why I know this is because I've been at this place.

Some of you might say, well, maybe not. Yes, I did. And periodically I come back

to that.

If I, let's say,

Don't practice each day.

Go away from the markets. I mean, like, it's like an exercise.

You know, it's a mental exercise that you always go through.

Obviously, habits, you know, are very strong right now for me, you know,

what, almost 20 plus years.

But still, from time to time, you forget stuff. You know, like, you go away from

your regular patterns.

But it will get better.

And again, the reason why I know is because I'm going through the same

as you guys. And I see how after hours and hours and years and

years of working on this stuff, you improve.

Not necessarily to the point where every call is correct.

I don't have every call correct.

But I'm trading my correct calls in the correct way.

that, you know, is profitable.

So this is where we're trying to go.

Let's look at the bias game.

What was the key here?

And we already published this, so maybe I'm just going to jump into the solution

really quick.

First of all, it was an accumulation.

Secondly, please note that the timeframe, it was a four -hour

an intraday trading range that on the daily you will definitely have quite a

dates here, right? So from beginning of April to June, two months of data.

So what do we have here?

Ooh, kind of reminds me of oil a little bit, of the structure of the oil right

now, right? So we have that selling climax, and then the first supply that

observe with our eye is going to be somewhere close to the preliminary

before the climactic action. Please note how climax is not necessarily the

climax that we would be expecting with a lot of momentum to the downside, a lot

of acceleration. No, this is different.

We see that there is some bind on the bars like this.

probably like this one right here. And the volume signature actually goes down.

So the selling is decelerating throughout this local picture

of this last leg.

And then obviously a change of character, really good bars.

There is really not a lot of buying that's happening. It's just exhaustion

selling at this point. And then an excitement comes on this gap.

So please note the position of the gap.

that happens.

If we were to think about where supply has come in, so somewhere in this area

right here, then the jump actually happens right

above that area. So if we're thinking overbought, oversold, it becomes

overbought almost instantly with that bar. Right away when it's overbought

this, some supply is going to come.

And it's going to increase, and that's going to push the price down.

As the price goes down, we want to see how it goes down. What are the

characteristics with which the price goes down? Well, we see diminishing

characteristics as the price goes down to the lows. So that's bullish.

We see that predominantly selling has been done on two bars.

Here's the selling into.

an overbought condition and here's the selling as a giving up the positions

were established earlier there is really not no more

heavy selling after that and secondary test creates a high low

so that's great and the price reacts to the upside and there is some demand

behind it so we know with this high low that The downtrend has been stopped, and

we had the first test.

All right, second jump up.

This is very interesting because we have the same type of conditions or somewhat

similar. We have a jump, an attempt to jump on the gap.

The volume signature is less, so that's very encouraging.

This is probably the first time on this chart when you should be thinking,

not the first time, this one right here, high or low, the second time when you

will be thinking, hmm, this is a confirmation of the not just stop in

stop in the downtrend, but probably this is the beginning

of the absorption and possible accumulation.

Why do we say this on this bar?

Well, a lot of supply has come in.

and then some supply has come in here, but there is less of an effort to push

the price up, and yet how does the price travel?

It has a gap, and then it has throughout the day this consistent move

up. Here we're a little bit more limited, and on the intraday level, we

would be thinking that this was kind of like the intraday picture for this bar.

Intraday picture for this bar.

was much more interesting.

It kept up, tried to go down, went up, and closed like this.

So a much more bullish day for the analogous bar that we see in the

area where supply is present.

So this tells us, and this is going to be in November special, that there is

some kind of ease of movement and

there is definitely some momentum behind these

two attempts to go up. So there is some buy.

Third attempt to go up.

And here we are thinking kind of the same way. We have to think, how does

compare to the previous times when there was an attempt to go up?

Because after the reaction right here, we're still creating a higher low after

the original higher low.

So bullish, bullish, possible absorption, possible absorption,

initial absorption.

Now for the fourth time, we're trying to get over this level and we want to see

how supply comes in and then how the price reacts to that supply.

So what do we see? This is a measure of supply and demand, obviously.

Is there a supply on this bar?

Yes.

And it actually increased. Look at these bars, right?

And yet, what do we do?

Do we stop?

No, we travel.

Do we have some kind of supply tails?

No, we don't. So even though supply has increased, we're kind of seeing that

demand here is present as well.

And the demand is starting to absorb the supply.

Now, what if we're wrong?

I mean, like, what if we are still thinking what kind of bar this is? Is

really an absorption bar, vertical absorption?

Or is this something that contains supply and we could expect this type of

this type of move to the downside?

And that's exactly what we want to see.

So I believe that we stopped the bias game somewhere here on this bar.

on this red bar so you have to assess what kind of reaction you have relative

to the reactions that you had before every time supply comes in and you kind

of could see that this reaction right here is shallow it doesn't have that

depth on the reactions the volume diminishes and that suggests that um

That supply at this level has been observed and the price is ready to move

much freer way.

So this one, guys, was for you. I was thinking about WTC students

when we were working on this bias game because this is a little bit more

advanced concept and you have to go through that type of analysis to get

we are.

Twitter was...

predominantly bullish.

And I think it's because we have this higher highs, higher lows structure.

So I think that's what people are going for. I don't think that there is a

very in -depth consideration of how the volume behaves with the price there.

But the price structure was so evidently bullish with the higher highs, higher

lows, so everybody was voting.

on the accumulation.

All right, let's see some of the questions here that we have. Let's

Simon's.

With the benefit of the historical chart, I can identify the upsloping

structure. If this was in real time, at which point would you be able to confirm

and start drawing the upsloping trading range?

I think that This is the point where you could definitely start drawing it

because you have a higher low and you have a higher high. Those are the two

requirements for the sloping trading range.

So you have to have three points where you have a higher high and a higher low,

and you can connect them like this and then project.

Once you have additional points, then you just basically check.

for the validity of those points and the validity of the trend channel itself.

You could also entertain an idea that this is an upslope

even earlier. So for instance, you could think that because supply has come

here, why don't you connect these two points?

And again, guys, this is something that I would never say.

in wtc just because i know i'm going to confuse people but again you're here a

little bit more advanced so why would we be drawing it like this well points of

supply and points of demand are going to be extremely important points for us to

identify as um you know points where resistance and support will

reside where it will occur And that's exactly what we see here. All of these

four points are on that line.

Even this one right here, this is just a test.

And then we definitely see how, again, supply comes around the same line, the

same upsloping resistance.

All right, from Eric.

A sloping range versus a horizontal range does not necessarily change one's

acceptance of the result on a bar -to -bar comparison.

However... and I would agree with that.

It could, if you're trying to decide if result of a particular effort committed

above resistance representing by the sloping trading edge versus committed by

defined by the top of the bar.

Okay, so basically the question is here in the

upthrust actions.

Would it be fair that we could say that there is

let's say a definitive commitment right here?

Probably no.

We definitely would still say that it's a temporary commitment.

And therefore, you still have to go through the analysis of the volume by

itself.

Having said this, let's look at the possible resistance lines, right? And

going to use the closes. So I'm using the highest close here to define

What is the actual commitment on that upthrust, on the next upthrust?

So we have a commitment up temporary going down. We have,

after this, an attempt to commit at the close, but we

can't really do that.

Price gaps up, which shows some strength, and this is actually intraday.

is an element of strength by itself. So we could even put minus sign of strength

here.

And then the last bar, just because look at where the close is, right? So these

are the three spot.

Do we commit to the upside here?

And let me see, Eric, do you see that?

Do we commit to the upside on the close?

Yes, and Eric, we're committing above the close. So just a small nuance right

there.

And the nuance here is more about what is the actual commitment on the close? I

mean, like, can we have so much supply?

And then could we finally commit? So in the first two cases, we see that even if

we have that temporary commitment goes down, we can't commit above on the close

here. This is just an open.

But here.

We have a distance that we've traveled above the last close as a commitment.

It looks like the price after that spends all of the time above that

And that would define the strength.

So, Eric, I would be thinking both ways.

I would be thinking both upsloping resistance and horizontal resistance.

And I would be thinking more deeply in terms of... I'm not going to just look

the highs, but I'm going to look also at what is the actual commitment on the

close.

When are we having that first commitment that commits, and then after that

reaction does not go back into the trading range, but actually stops

here.

And then I would be looking for the upslope, and with the upslope, I think

major sign of strength. This is where we are going to...

be that commitment above.

So you have to think about that as well.

Because if we're thinking in terms of overcoming the upsloping resistance,

let's say, which is based, let's say, on the highs of the bars, then when would

be that first time when that would happen in a trading range?

Obviously on the major sign of strength and into the backing up action.

So this bar is somewhere in the middle of the range.

And we have to use slightly different technique.

All right, great. Good questions.

Here is your next bias game.

So I want you guys to write it down really quick.

What do you think?

Accumulation or distribution?

I kind of want to gauge you a little bit in this game.

engage you a little bit more because before we go into the actual reveal,

and you guys know already the Twitter game, so solution comes out each Friday.

So I want to make sure that we have that accountability here right now.

Okay, I'll give you a little bit more time.

All right, okay, all right, okay, okay.

Okay, three more seconds.

Three, two, one. Okay, we have

accumulation, accumulation, accumulation, and I'm considering

reaccumulation as well.

And then we have accumulation.

So four accumulations and then we have one, two, three, four.

And this is from just people who wrote this down. So we are slightly on the

distributional side, but we are close to 50 -50.

Okay, well, that's great. So now we know bias game number 24.

We're like 50 -50, slightly on the distributional side.

Let's see next week where we are with that.

As always, you could check out our Twitter.

on Friday for the solution.

And as always, I'm just expecting your analysis.

So definitely analyze this before you see the solution.

All right, market update. And we kind of went through this a little bit with

Mitri.

Very dull action in the indices.

And that's by design.

And the reason why it's by design is because, again, in the latest WMD class,

was talking about how this was the area where supply has been observed, then

supply has been observed a little bit more.

We don't have the volume signature, so I'm expecting technical analysts that's

screaming, we're going up, but we don't have a confirmation from the volume.

We're going up, but we don't have the confirmation by the momentum.

We're going up.

but something is still not healthy about this rise.

So it's time to start hearing those comments when the index is starting to

away from the structure.

Now, in our case, we know when supply is going down,

it just suggests that absorption has happened.

Now, this has to happen in the structure that is a bullish structure, and we

have higher highs, higher lows. We're not seeing a big complete structure

here.

That's the complete structure.

And this was phase C.

But if we look at much larger structure, then we would be thinking that as long

as... Absorption has happened, and the prices are showing that the result is

moving in the bias of the absorbed supply.

We are at a good place.

We don't have to have demand pushing the price up.

Absorption by itself will allow the price to go up without

a significant demand signature.

you know alluded in the wmd that that's kind of the character that we're

expecting the price to go the uh kind of like a laborious move up uh

grinding you know day by day you know this type of action uh on the very low

volume and then somewhere um let's say where we have

news on china

All Brexit.

This is where we're going to have acceleration.

So there is a trade that is built in here. This is an intraday trade.

And I don't know if we can catch this because if news comes, news comes,

So we could only technically catch the news. We can only see how there is some

absorption before the news.

Momentum starts to kick in. We don't know what's going on.

And then suddenly the news comes out. So we want to be before the news when we

observe those momentum characteristics.

Now, having said this, I think that there is a little bit more increased

that we could have some kind of reaction here.

And I think it would be very natural for us to have a reaction here because a

lot of people would be expecting what? Would be expecting coming out.

in the upthrust type of action and coming back into the trading range. So

should be some selling at this spot.

We see some tails, some indecision bars.

So there is a possibility that on momentum

-dimension volume characteristics, we could have that type of reaction.

Simon is asking, is the movement on the upside? I thought we wanted to see a

synchronicity of effort versus result to confirm the upward bias.

Yes to both, Simon.

So, yeah, so please, you know, note that somewhere, you know, put

a note in your material somewhere.

Where do we see the synchronicity? We usually will see the synchronicity

the process where the price goes down, retests, and then goes up. And

synchronicity usually is going to occur somewhere in this area when it comes

out.

Here as well.

After that, synchronicity could be compromised, right? Because as we go up,

momentum goes down, buying goes down. So there should be some kind of weakness.

And that synchronicity is going to be done.

And then there's going to be some synchronicity to the downside. Like, for

instance, this bar shows that synchronicity to the downside. This bar

synchronicity to the downside. So we would be expecting some kind of

continuation. This is a synchronicity bar.

To the upside, let me just quickly find that.

Okay, so here is our synchronicity bar right here.

Why? Because the volume is increasing, the price is increasing, you know,

breaking out. Before that, all of the demand volume signatures were kind of

diminishing, so we don't have that move in the volume and

then move in the price.

But I think it's very reasonable because here we are observing a lot of supply.

The same will come.

Here, we're first observing the supply, but then note the bars that are

increasing in the volume signature.

This was the bar.

So this was the opening of the position. I actually, in different

accounts, in the institutional accounts, you know, I have some of the just index

positions, some diversified index positions like spiders, queues.

And this was the bar where it made sense to come in and then just add on the way

up.

Okay, so what else is going on here?

Let's skip Bitcoin for a second. I think oil is kind of doing exactly what we

wanted to do. I think the key was this reaction just lately.

So look at this redistribution and then what happens afterwards.

Such an attempt to go down, and yet it creates a higher low. It's on lower

volume signature. It has demand tails, and then it recovers so fast.

So that was phase C, possible phase C. I'm expecting a continuation into that

-62 zone at this point.

I was thinking that there should be acceleration. There is really not a lot

supply that is left.

at these levels.

This rally right here as a minor sign of strength in phase B was very attractive

because it basically suggested absorption of supply on the way up, and

would have a reaction and stop at the high or low, a very quick recovery.

So it happened that way, at least for now, so that's great.

Gold, the idea here was that This is an overcrowded institutional

trade, and we could expect some kind of taking of the profits and then

unwinding of the speculative position.

So speculators have to go away from this position, and that speculative supply

has to be observed by huge institutions first before we start moving to the

upside. So my call here was to the downside, a very quick move to the

Well, you know, guys, one of the things that I work on in my trading is timing.

So it seems to me that I'm seeing a lot of changes of behavior prior to

the actual timing when the move starts.

Okay, so this is just my personal rant here on my trading.

So I'm working on this. What am I doing here?

I'm thinking, okay, change of behavior, why am I seeing this change of behavior?

Well, because I trained my mind to see those patterns of change earlier on.

And I think that kind of the disconnect that I have right now between analysis

on the bias and analysis on timing.

It's not necessarily a bad thing, right? Wouldn't we want to know what's going

to happen?

before it happens.

So what would be the adjustment here? And maybe something that you can write

down as a comment for me, as a suggestion.

As Dimitri, I'm open, always open here, you know,

to listen to the suggestions.

Eric is saying, wait for the retest.

I would agree with that.

It's almost like, you know, also in oil, if you kind of like look through my

analysis, the call was here it was not a bad call even for this trade or you

know for the trade that unfolds but it happened prior and it happened in phase

um so yes waiting for that last test in this case what would be the test for uh

for gold this high and this high those are still lower highs um and i thought

that okay well here i'm kind of right um and then it went up again but today You

know, I'm thinking this is what I kind of was waiting for.

The way how it reacted was not the greatest, by the way.

Can anyone tell me why?

This bar is not that bearish. That's what I'm saying.

Why is that?

Okay, Francis is saying hi, hello. Absolutely.

I mean, like, if there is so much effort, what the heck?

Why are you not going lower?

Why are you not committing below the support?

Eric is saying big effort, big result, but doesn't commit below prior low.

Thank you.

Yeah, so something very strange. So unless it continues to the downside and

breaks these levels, then we could expect it to accelerate because this is

speculators are going to give up their positions.

so we just have to kind of like see what's going to happen tomorrow um and

the end of this week but the very interesting you know development in oil

sorry in gold bitcoin is even more interesting well why well because

much talk about this and oh my god uh i wish i would be trading bitcoin

uh

more actively, to have a much more comprehensive idea.

So our crypto residents, Alessio,

is doing this work.

In the discussion with him, the key I thought was all about just

still being in the downtrend.

I mean...

This is something that we still need to understand as a context of what's going

on.

And what is the context for this?

Still in a downtrend.

Okay, something like this, maybe the wedge.

And if we do this, by the way, Look at this.

Okay, let me just give you this picture. How about this, guys?

What is the environment right now?

Where are we? Are we in the trading range?

Are we in the downtrend?

Are we in the uptrend?

I mean, this looks very basic.

but that's what it comes to.

Within the given environment to us,

that is lower highs, lower

lows, after a very clearly defined buying climax.

we definitely are still either in the downtrend or in the downsloping

trading range.

If this is a downsloping trading range and you're thinking, okay, well, here's

our phase A, B, B, C, and this could be, you know, this test

could be as a low, a low, then most likely you want to see a

commitment above.

And yet, it doesn't go above that level.

So every time we try to do that, once here, once here, another one attempt

and then on the news that Chinese government, you know, want to be in the

business, Bitcoin rallies that much.

Obviously, some supply.

So what do we do here?

This was a really good discussion with the WTC course on Monday.

We need to see how the test is going to unfold.

And there is definitely an idea here that I'm hearing from

the community and Wyckoff community as well, that this was really bullish.

It looks bullish.

I don't see the result being bullish, though.

Because I know that within the downtrend or within the trading range, would we

have some kind of rallies?

Yeah, of course.

Look at all those rallies.

Some of them are very aggressive. I'm trying to highlight their aggressiveness

here.

So this is just another rally, let's say, within the downtrend.

Well, even if we are wrong,

and this is the emergence of the uptrend, then how would the price

Well, we probably would have this type of test, and then this type of bar would

actually start either committing to the upside, or we would have the next bar

that commits to the upside, and then we see something like this.

Maybe it will still happen.

I don't know. I mean, like the news on Bitcoin really surprised me because they

just... so unusual when they come, just like big splash, and there's just so

much. There's so much volatility in this instrument.

But I want you to think in terms of the confirmation.

Be bullish not on the character.

Be bullish on the structure.

Does the structure confirm the breakout?

Not yet.

And then, therefore, we're probably still in the downtrend.

yesterday's bar, this type of spike to the downside where there is a big drop

84, and if you saw this on the intraday, you're kind of going to see it better.

I'll just do this on the hourly.

So when we look at the hourly, here is that rejection of the price, and plus

also, I don't know if you guys noticed, first rejection was at 10 ,000.

another attempt to go up, rejection again, and this comes on a lot of

And then after that, more supply comes in.

And it doesn't matter that it recovered because the structure is still damaged.

So until we actually have this, we still stay in bearish long -term, not

long -term, intermediate term, and we're looking for the short -term structure

to change.

Then I would be saying like, yes, this looks bullish.

You know, once we have that confirmation.

But before that, I want to be conservative. This is not the instrument

you know, I want to be extremely kind of like speculative.

Because when we announce the call, I mean, we want to make sure that the call

comes out when we...

know that there is change that has happened and not necessarily

we anticipate the change to happen.

What would be a good example of this?

Okay, well, maybe something like this, and we actually commented on this at the

time in WMD.

This is a really good pattern, increasing the volume signature, and

don't give up our position.

We're just consolidating.

throughout this whole thing, and we're still observing the supply.

If that's not enough, next bar is the confirmation.

So if we have a bar like this, then it would confirm that, well, at least we

might consider that we are in the sign of strength structure right now.

All right.

Here's our market update.

Let's go to the next segment.

All right.

This one is very interesting, but I think, Simon, can we leave this for

Thursday?

Could we do it on Thursday and not necessarily here? I'm just going to give

guys, you can stop the recording here and just kind of read this.

The question here is what the difference between the price velocity and the

price momentum.

And in preparation for that class and anticipating that question, I've been

researching a lot of that.

So let's leave this for Thursday as a discussion.

But for you guys, I'm putting these definitions here and I want you to think

about what's the difference between momentum and the velocity of price.

And those are two different things. You could have...

let's say you could have a deceleration of momentum and and this could happen

during the high velocity environment and we'll talk about this um on thursday

all right anatomy of a trade trade desk this comes from arvin

um and i just used arvin's example and thank you for sending other examples you

know just to see where we are let me just

double check and let me double check on

where we are and actually I'm gonna show you the latest really quick there you

go so we are still in this range right

here and then this was today's bar right here

okay

Let's go and discuss this. So in the long

-term channel that Arvind is showing us, we are at the

oversold condition.

This is a weekly chart.

We have been in this oversold condition, excuse me, in this channel

multiple times before, right?

We came out of here.

We were below the oversold here.

So that kind of extends this range for us as well. So it's possible that the

price could go down to this level as well. And that would still be okay. And

then somewhere here.

So just based on this picture, let me ask you a couple of questions, guys.

Do you think that the trend is broken?

Okay, I have only, okay, so yeah, coming in.

All right, so everyone is saying no, it's not broken. Okay, great.

But Franz is saying, but it's vulnerable.

Well, I would agree with this.

Okay, let me ask Franz you a question.

Was the price vulnerable at this spot?

And obviously, when we say vulnerable, vulnerable to the decline, vulnerable to

changing the uptrend to maybe a downtrend or to a major consolidation,

know, like a cyclical reaccumulation.

Okay, well, let's go with this again.

Was the price vulnerable at this spot?

Was the price vulnerable at this spot right here?

Maybe like on this one.

Yes. Is the price vulnerable here?

Yes. All right. So we basically are going through the same conditions,

right, where, you know, patterns repeat.

I could reverse this and I could say, hmm, how about for the strategy?

We're going to sell and we're going to hedge every time there is some kind of

closeness or touch to the defined channel,

right? And we're going to say that we've defined that channel within the first

year, you know, since inception.

So like right here, we've defined it.

How did we define it?

There are different ways of how to realize that the mean is here, and then

use the overbought conditions to do exactly that, just to create this line,

then this line comes naturally.

By the way, could be a little bit lower here as well, but this is the point of

touch.

So imagine the strategy where we say every time it's close or

touches, we short.

Here.

Here, here, here, here, here.

And then our other strategy is gonna be, okay, how about this?

Every time in the oversold condition, we're gonna be buyers or close to that.

Here is another strategy around the price cycle.

How about another strategy?

Every time the price goes through the mean,

um on the upside we're going to be buyers

and we're going to swing uh trade this into the overbought condition

another

strategy right um so we already have three strategies here

What about if for those swing trades, we will add some kind of definition of the

Wyckoff structure, right? So then we're gonna look into this trading range, this

range right here, this range right here.

Then let's say this range right here,

this range right here. Some of those trades are gonna go away, like this

in the middle of the range, we would never do that.

And probably that's it.

Right. Everything else seems to be OK. But we could be a little bit earlier

this trade.

So this is how we would be thinking in terms of the strategies.

Now, we are at a very interesting spot where we are saying it's an oversold

condition, but it's vulnerable.

So what do we do when it's vulnerable? We need some kind of confirmation.

One way or another, either confirm that you're going to go up or confirm that

you're going to go down.

We don't really care just because we are not necessarily in this position,

although a couple of you actually, you know, had like a swing position here,

right? So, and we were discussing that and I said that, you know, actually, you

know, if it breaks, you know, it actually would be okay for a swing.

So we need to find those confirmatory points.

Is the price going to fail through this support or is it going to go down and

then go up again?

Maybe we're in the trading range of this bigger magnitude like at the beginning

of 2018.

So we have to consider that as well.

So with this, I want you guys...

Quickly, give me an idea of where you stand on this.

So tell me, what are we doing here?

And you can just write it down. I don't have the poll for you here, guys.

What do you guys think?

Should we keep it? Should we keep it and add more?

Should we...

Should we do nothing? Should we go short here?

Because that's definitely some other things, some other action that we could

think of.

Let's see what you guys are saying.

Okay, Rick, what is your comment here?

Look for the confirmation in add or short.

okay long term nothing short term possible short okay

yeah there is definitely some deterioration here that we could see all

right so some supply that comes in

this was

actually observed this was good.

Not a lot of supplies coming in right now, but the price moves down.

So if we're not in the position, we're probably staying away still until maybe

something like this.

Then this would be very attractive.

You know, that type of retest if truly there's not a

lot of selling.

that is going on.

And we kind of don't see a lot of selling here, right? So this is selling,

is the value selling, value selling, selling, selling, selling,

selling,

and then as the price

goes down, please note that, you know, it doesn't necessarily go aggressively

the downside.

It goes into the zone. But we need to see better rallies. We need to

see a finding of the support, and we need to see this type of the

So let's just wait, right? So a lot of you are saying, let's wait.

Okay. Well, what about a short?

How would the short work?

I mean, somebody who is thinking that, you know, you're going to short this

stock. are you shorting right here and then for what reason

what

do you guys think would anybody short here

not

short in here okay interesting a simple breakout strategy would probably suggest

that

let's say going through, let's say 185, about 180 would

suggest that we are overcoming this level and we could collapse.

And I think it's possible here just because there are quite a few areas

where there was somewhat of an aggressive cell.

And we want to see demands coming in. That's the key.

In a lot of cases, after the initial value selling,

there might be some

inactivity that would be depicted with the low volume signature.

And then this would suggest that demand is poor.

And I think that in case of TTD, I think I'm conscious about

that. I'm still thinking like, well, how come demand is not showing up in a much

larger way?

So wait for the confirmation.

Would it do this or would it just collapse?

All right, well, let's see what's going to happen next.

Eric is saying, this was one of the biggest down reactions in the uptrend.

we expect some sort of mini trading range here for reaccumulation as before

distribution or wait until the structure unfolds a bit more?

We would be somewhere in phase B in this mini structure.

Okay, if we're talking about the mini structure right here, yeah, we could be

phase B and that's why we have to wait, but also just... looking at the whole

thing at the whole cycle that we're in uh we're definitely expecting you know

we're thinking like this is the range that had that stop in action and the

supply came in this is the range this is the reaction that we had this is the

reaction that we have and then a trading range and then we could consolidate

here for quite some time so yeah absolutely possible

All right, great.

Where are we? Okay.

Still some time left for the exercise.

So excellent. Let's do the exercise.

Yeah, we have a really good pace today.

All right, guys.

This is the exercise on selection.

Your goal is going to be to select a winning stock and...

The winning stock is going to be not the one that goes in your direction.

This is not an interesting game.

The bias game is all about that.

The winning stock is going to be the one that is going to outperform.

So let's dig into this, and hopefully we have enough time to go through the

whole exercise.

All right, and here is your first action sequence.

We have four stocks.

I'm showing you all of them at the same time. I want you kind of like to get a

sense of where we are.

And then, you know, we could start discussing them stock by stock.

So here is your stock number one.

And I put here the industry group. Please note that these are not

stocks. Different industry groups, different stocks.

So what could we say about this? And maybe like a volunteer, anybody wants to

step in, feeling comfortable, we could go through this together.

Let me see.

No volunteers? All right.

Okay, so... Okay, Eric is saying, I'll go.

All right, Eric.

Eric, you're becoming, you know, a regular contributor.

Hello? Yeah, hi, Eric.

Yeah, I think the word's guinea pig.

Or target.

All right, all right, all right.

Okay, so...

Stock number one, is it stronger than the group itself, or is it weaker?

To be honest with you, it looks just like the group.

Okay. Yeah, and when you have those type of doubts, and by the way, there is

some kind of echo in the background. I don't know, maybe I'm on speaker.

It might be the feedback from the speaker.

Sorry. I don't know why it's not coming through on my – I know what I'll do.

I'll switch my – I've got to switch my speaker off and go to headset for the –

Okay. Thank you. I appreciate that.

Okay. There we go. How's that?

I think – yeah, I think it's better.

Okay. So take a significant low and then compare that

throughout both of the charts.

And you could instantly –

decide what was stronger what was weaker you could do the same for uh for

the resistance line as well and you could basically say okay so what's the

extension here for the stock um you know over the group probably not as much

would you say eric would you say that the stock is weaker at that point Just

generally, kind of like in this area?

Well, there is no overextension above the prior high. It just touches the

high.

Right, right, right. Okay, so this area is definitely weaker for the stock.

So we would be expecting for what was this weakness, Eric?

Underperformance in the future.

Yeah, so look at how here the group is not touching the support line.

Whereas here, you know, for the stock, we're very close.

Okay, well, what about next rally? What about this place? Are we stronger or

weaker for the stock?

Weaker, no commitment above that trading range, upper trading range boundary.

All right, would suggest that not only we're going to have some kind of

reaction, but we're probably going to underperform more than the group itself.

And look at what time.

We have a break into the downside, kind of the same.

All right.

And then stock is weaker or stronger on the way down?

It looks weaker. It's very gappy.

Not much of a rally back up to the ice like we have with the industry group.

then gappy following that attempted retest.

That's what I see.

All right, so in general, we're saying that this stock looks weaker than the

group. Okay, so what other observations could we make about this stock?

What about volume observations? And specifically, I want to look at the

volume signature. What does it tell you?

That a lot of people are trying to get out.

It's above average, clearly a sustained above average volume if the blue line is

the average volume.

It seems to be increasing on the way down and sustained.

And it seems to be a little bit more gradual with the industry group.

I mean, it's still increasing on the way down, but not quite as gappy.

Let me ask you a different question. What do you think big institutions, big

market participants are doing here in this area?

Where the volume increases?

Well, they're like the institutional trend followers. Maybe this is like a

late capitulation.

Okay.

Late capitulation, maybe general capitulation.

What does happen on, let's say, general capitulation?

What do institutions do? I mean, you were talking about weak institutional

hands, so obviously they're selling. What about strong institutional hands?

Would they be buyers here at this point on the general capitulation?

Well, somebody is buying that, right? Somebody is buying, right? Because I'm

thinking, like looking through this whole structure, I'm thinking, okay, so

where is our early capitulation?

Probably this. We kind of see that increase in the supply signature.

Where is our late institutional capitulation?

Probably this.

Where is our general capitulation? Probably what comes after that. So

always will be.

going into the actual terminal climactic action.

This is where everybody is just getting out.

Retail institutions.

Prior to that, this looks like institutions are capitulating.

And some of them are buying already at this point. Like on the way down, we see

it from this. We see it from this signature. So there is some buying. If

is some buying, Eric, let's just speculate as to...

What structural spot are we in?

Well, then we would be coming into maybe a preliminary support.

It could potentially be there and then maybe a selling climax.

Maybe, yeah.

Maybe, but it's hard to see because you don't see what's happening before the

trading range.

So I don't know whether we're in a prior uptrend or downtrend. Okay.

That doesn't matter. We've lost 50 % of the value, so that seems like a pretty

good drop and maybe a value zone for somebody.

Okay. Could we actually kind of speculate whether this is a

possible stop in action?

Look at the volume signature, right, how it climaxes here, and then look at the

volume signature that comes next. So probably we see some decline.

selling so the momentum of selling actually goes down on that

last move to the downside right here and then we have this volume spike right

here on this bar so suggest maybe some buying is going on all right well do we

have any trades here not for me I haven't seen any

confirmation of stopping action.

And after a move down like that, I wouldn't be touching the first rally.

You would want to see what the automatic reaction is, where it comes to, and see

if we're setting up into a reaccumulation trading range.

We're early in a potential trading range, so I wouldn't touch it.

Right. And I think rightful is so, because

This is not necessarily our trade. But if you're a speculator and you're

thinking in terms of where the structure is, this is the same spot.

So what is the trade that built in just naturally into that structure? A

possible automatic rally?

And that would be kind of like the only thing that's going to be available to

you here.

Now, this automatic rally, we have to assess.

to what kind of degree we could have some kind of up rise in the

price into the automatic rally out of the selling climax.

Would that be enough for the trade for us here? You know, if we're short term

oriented traders.

So I've often found that the, I don't know if this is...

Right or not, but often the automatic reaction comes up into the area of the

the preliminary support so that would be about six bucks on a On a $34 stock.

So that's about 15 % Let's say if you caught part of that 10 % Okay. What

the character was which the price might travel here?

I Think it could potentially travel pretty quick because you probably have a

bunch of

People shored in there, so as soon as it started to take out that last red

candle, you'd have some forced buying, and it would head up there pretty

quickly. Okay, so when I'm drawing this candle, that was my next question.

We are improving as a class and individually because I had all of those

questions in my mind, and you asked them before I did.

So that's a good sign.

I would agree with you that, and that would be my comment as well, the price,

it reacts into the automatic reaction, it's going to go probably into the area

of the preliminary support. This is where they found some stop in action, so

there was some value there and a fair price in their opinion.

We definitely need some kind of confirmation of the reversal, although

thinking that maybe we might be close here.

So if we have that, we could be thinking about that type of trade into the

automatic.

This is something that also comes out of the deeply oversold condition. So when

we look at the analogs, they are in the oversold condition as well, but this is

extreme.

So therefore, probably the rebound is gonna be much better than what we've

here or here.

And I would probably concur that maybe 41, 42 or slightly above that.

like going into, let's say, this gap right here into 43, would be that type

trade. So let's keep this in mind, stock number one. Let's quickly go to stock

number two.

Eric, what do you see here?

Let's first talk about the performance.

So, again, same as before, we see the –

so from the –

The peak at the left, and you're drawing the automatic reaction.

You know, the industry group kind of peaks above. Our stock doesn't.

I'm not sure about that upthrust kind of action in June. Seems to look similar.

We're above.

Yeah.

Somewhat similar. Maybe it's slightly stronger.

I'm sorry, maybe slightly weaker, slightly weaker.

Yeah, but then it kind of looks the same. And then to the last part of the

trading range, you know, we have outperformance.

Let's look at the reaction in August because I think this is very important,

right? So what about that reaction in August?

Are we performing or outperforming or underperforming?

Well, initially, I'm not sure on a percentage -wise, but it looks like

underperforming on the break.

What about the close?

The close of that first candle?

Yeah, like the lowest point.

We've talked about the closes today, right?

That's kind of like the points of commitment where...

We have some buying here on the selling climax.

I mean, we see this from the tail. So we're looking at the close, and relative

to what we see in the group, what can we say about this close? Actually, this is

the close. This is not the correct bar. Oh, boy.

All right, sorry about that. So here it is, and then here it is.

Yeah, so that probably would be looking somewhat similar, I would assume.

Okay. But what's interesting, though, is if you just look at those, I almost

have to get a ruler out to see, those two bars on that reaction down,

the stock looks like it has some buying in it. The industry group, no.

The next day, the stock tries to push down again.

And the industry group is up. So I'm trying to figure out whether the stock

leading the industry group on those two bars or the other way around, I guess is

what I'm trying to figure out. Okay.

Bar number one, bar number zero, bar number two.

Bar number zero, bar number one, bar number two.

Okay. So the stock looks stronger than the...

I don't know. In terms of range, the stock went below the support but came

back.

So look at the same bar for the industry group, and then you said

for the stock, the price came back into the trading range. What's stronger?

Well, I would say you measure result four ways, right?

The industry group doesn't really penetrate that support level very much

closes on it.

The stock goes way below. Hold on a second, Eric. So you're talking about

right? So close.

We're kind of here.

I'm talking spread, the absolute spread and close.

Okay, so let's just go one by one. Okay, so close to close.

Close.

to the spread.

Okay, so spread is increasing, kind of the same, right?

In the way of, yeah, so somewhat the same, plus there is a gap here, so there

might be a little bit more weakness initially.

Okay, we're gonna say it's the same.

Close to close, right, so here is this movement, here is this movement.

Maybe the same?

Yeah, the same.

But close to spread is going to be different.

Stronger than the stock.

Yeah, stock is stronger.

Why is stock stronger?

Well, because of what Eric said, the demand tail and the volume behind it.

Somebody comes in and buys the value.

So it was very interesting.

On the gap down, the stock is much weaker.

creates more value in the group where institutions are interested.

And because of that interest in that particular stock as a potential

outperformer, it starts to behave better on the intraday. Okay, so by the end of

the day, would you say that the stock has behaved into the close more

bullish than the industry group or vice versa?

I would say more bullish.

It went down and then it came right back up into the top half or third,

whereas the industry group just sold off on that day. Okay, great. So that first

day is definitely stronger for the stock.

What about that second day?

We have a lot of effort, but...

It looks like it opened high and just sold off, but the industry group

Look at the low of the previous bar. Look at the low of the previous bar.

do we have the close?

Where do we have the close?

Well, we have a lower close on the stock on bar one if we're using that same.

Well, we're looking at the second bar, right? So

relative to bar number one, what is stronger, what is weaker?

Well, the industry group is stronger than the stock. The stock closed lower

the prior bar, and the industry group closed higher.

Okay, so we have... Am I not looking at the right bars, perhaps?

Probably not, yes.

Oh, sorry.

Double check.

Apologies. Okay, so we have... I'm going to take a screenshot and put a ruler on

it. That'll make it easier for me. Okay, I apologize. You know, my drawing is

obviously very bad.

Okay, so bar number one, bar number two. This is the stock.

So what do we see? We see the close of bar number two as a

higher low, correct, Eric, than the low of bar number one.

On the stock, right? On the stock, yes.

Yes. Yes.

What do we have here for the group?

We have a lower low.

We have a lower low.

Stronger or weaker?

the stock is stronger. So the group is weaker and then we have strength on bar

number one for the stock. Somebody's actively buying in. A lot of volume

the bar number two and we're seeing that it's stronger as well.

So we see that on the climactic action the stock is outperforming.

So right here we're thinking okay so value investors are

doing what probably buying into this position right okay so then after that

once we define the selling climax once we define the automatic rally

we have our range and then let's go through the comparative analysis

really quickly okay this spot right here stronger stronger

this stock uh this okay this this level

right here right this low in october what is stronger what is weaker stock is

stronger stock is stronger okay great so we said stronger at the uh support here

on the uh selling yes what about the automatic uh rally

uh

i'm not sure what to compare it to i mean yeah

It's going to be a little bit hard here, so I would probably take this as the

close when the price dropped, and then kind of do the same and just see. I

they are somewhat the same comparatively.

What's interesting, though, is you've got kind of three highs in a row there

the stock that are slightly higher, and on the industry group, they're just

slightly lower, kind of downtrending. I don't know if that means anything.

It does.

Everything means everything, right? So because what did Wyckoff say? I think

this was one of his probably statements that, you know, if I want to know one

statement from him, that's probably it.

Judge the market by its own action.

All of the information on the bias, timing, outperformance is already on

chart. We just need to open up that secret, right?

Why is this important? Higher highs, higher lows? Because it's

It tells us that there is less selling and more buying in the stock than in the

industry group.

So we want to acknowledge that. Then you said that there is strength here at the

conclusion of phase A, and we conclude in phase A with the secondary test on

diminished volume signature.

Okay, so what about potential phase B?

stronger, a stock or an industry group? Just generally, just looking at the

area.

I would say the stock looks, that next rally in B looks, the first rally in B

looks better.

And I don't know, it looks like we have.

More time above or more commitment above the top of the trading range.

Whereas on the industry group, we have some time

spent below the top of that range.

Everything's correct.

Everything's correct.

So just keep going. Just keep going.

So we're spending more.

closes above the point of resistance that was created by the automatic rally.

There's really no commitment below that range except for that one bar perhaps.

Right. That one there.

And then it reverses quickly whereas the industry group does spend some or does

commit below that for half a dozen bars.

Okay, great.

So strength on the climactic action, strength on the automatic rally,

on the secondary test, strength in phase B.

What would we be expecting going where? What, in the potential phase C maybe?

Would we be expecting a strength?

We would expect strength in the stock, and we see that because we do a

higher low.

compared to the prior secondary test in A, and the industry group

shows, I don't know, a minor sign of weakness. That's a pretty severe

-looking down reaction on the industry group, whereas the stock kind of has

some little up movements in that down reaction, so it's less ease of movement

down on the stock than the industry group.

Okay, great.

Let me ask you this question, and this question is for the rest of the class as

well.

Looking at the chart of the industry group, is this an accumulation or a

redistribution?

I don't see – I would say a –

Just to throw one out because usually I like to spend hours and hours and hours

looking at it. I would say a redistribution.

We haven't committed.

While going into the trading range, our bias is down.

We see some volume kind of at the top, and the result of that volume in the

industry group is a lower low.

And on the last rally up, we seem to have some selling tails, and we don't

touch the top of that trading range.

So for me, that looks like a

redistribution. Great.

I want to hear really quickly your answers, guys. So just put either A or

and that would be enough, or D for the distribution.

Let's see your comments really quick.

Okay.

All right. All right.

Maybe a couple more.

All right. All right.

Okay.

So majority of you are saying redistribution in line with what Eric is

Okay. So let's do this.

This is a bias game, right? I'm asking you basically, give me the bias.

I think Eric has started this analysis correctly.

What's the environment?

We are going down and then we are going into a trading range.

So we are in the downtrend and then we are in the trading range and we need to

figure out, you know, within this trading range, what is the bias?

Okay, well.

What would be the next thing, guys, that you would look at going through this

bias exercise?

So obviously, that first step was defined correctly.

This is a change of character that leads into the downtrend.

Lower highs, lower lows.

Okay, so what would be the next step?

When you look at the trading range, Eric,

What is the next priority in the analysis of the bias in the trading

The next priority.

Well, I tend to try to look where the volume is coming in and

then what is the result of that supply.

A little bit hard for us to identify the volume signature on the industry group.

wouldn't you say?

Yes, it's a little small.

Yeah, just because of this volume spike.

Unfortunate that, you know, we kind of like in between of the trading range

that.

So let's just kind of look maybe at the rallies and the reactions.

Sure. So clearly, I move to the downside and we're going to use the stock as the

proxy for the group as well.

Just because if, let's say stock,

is doing something that's probably going to be highly correlated to the group.

And we see how these two charts are so similar, right?

So for the untrained eye, you know, it would look almost the same.

But for us, there are just, you know, subtle differences.

The volume profile might be similar, right? Exactly. All right. So we're

to use the stocks volume profile just to help us out a little bit.

Okay. So let's compare this reaction and then the subsequent reaction right

here. They are all the same magnitude.

They look to be.

Yeah. And we're going to look at the volume signature here in the same way.

So how would we analyze these two reactions, and specifically the second

Is the second reaction more bearish or more bullish?

Well, I would say.

bearish. I mean, it's produced a lower result on similar volume.

Okay.

All right. So, let's decipher this.

Similar spread, sorry.

That's what I mean by result.

Similar range.

Oh, you mean like the distance traveled?

Yeah, the distance traveled and then so that's the spread of the of the move.

We probably would have to go like this, just because this is the highest point

here, or we can take this and we could just compare like this, right?

I'm just looking at what's highlighted.

Okay, all right, let's do this.

Okay, so we have this and then we have this.

Okay, so we're saying

Two is bearish.

Okay, so and then what are the bearish characteristics here? So a low, a low,

right? So we have a commitment below

support.

Okay, so what's important about this commitment is, is this a temporary

commitment or...

Is this more of the commitment where we are permanently committing something

like, you know, maybe like this?

No, it's clearly temporary.

Yeah, so temporary means that we are committing with one or two closes and

quickly recovering.

And that usually would suggest that there is some kind of value here.

That's why the recovery is so quick.

And we should be...

expecting a rally from here which does happen in this case right so we are

committing below the previous low uh how many closes do we have maybe like two

or three and then we are recovering not necessarily very quick but still we are

recovering you know generally quick okay so even though we say that there is a

commitment the price came back into the trading range and actually came back

significantly above the one half point.

So we can't really say that it was a permanent commitment.

It was probably a more temporary commitment.

What do you say?

Yeah, and it's also the only, from a structure perspective, the second kind

test of that.

If we want to call that first circle a selling climax, the bottom of the

range. So maybe we're early and maybe we're still in phase B here,

Selling climax, test, test, test, test. So I'm probably thinking this is

phase A, right? So we've tested. We had all elements. Stop in action, change of

character, test, test.

Probably we're done with phase A.

So probably the same for the industry group.

Okay, so we are saying that this was a temporary commitment.

When do we have a temporary commitment below the support? How do we call that?

And then the price recovers back into the trading range.

A minor sign of weakness?

Minor sign of weakness or?

Spring. Spring.

All right.

So this is where we are. This is the biggest question, structural questions.

Are we in a sprint situation or are we in the sign of weakness situation?

All right.

So with the sign of weakness, you know, if we're still in phase B, then we would

be expecting what?

An upthrust?

Maybe.

Right? In terms of what comes next?

Right. Uh -huh.

In the structure.

If we're thinking that this is a minus sign of weakness.

Yeah, we would see a UTAD potentially

or maybe an equal high.

Okay,

so we are expecting a rally from here.

One way or another.

Whether you're thinking this is a distribution, whether you're thinking

the low, so you're thinking that this is an accumulation, you're still expecting

a rally. If this is phase C, there will be a rally. If this is phase B of the

distribution, there will be a rally into the LPSY and into the Utah.

Okay, how about this? So we've talked about the low, low. How about something

else? How about a downspread?

Which one is more bearish?

and which one is more bullish one or two

um

well i i

don't i don't really know how to answer that other than think about the uh here

on the down spread think about uh the size

of the spread itself, right? Think about also how closes are located

to each other, right? So here, for instance, we see closes have that

momentum to the downside.

Here, closes are a little bit more sticking together, especially at the end

this reaction right here.

So it seems to me that Reaction number two will look a little bit more bullish

just because of lesser selling and how those bars do look to the downside.

And then there is maybe some buying behind it as well.

It looks like my first thought when I was looking at it was like the first

reaction looks like a free fall. The second one looks like almost like a like

one, two, three, you know. Right. Right. So one, two.

three, four, five, you know, that type of reaction. And look into this area.

This is very laborious. This is attempt to go down, up, attempt to go down, up,

attempt to go down, up, attempt to go down, up, down, up, down, up, down, up,

down, up, down, up.

There is a lot of volatility in this area, and we know when there is a lot of

volatility with no result, usually... This means that demand is behind it, in

this case, in their accumulation, obviously, you know, if we're thinking

accumulation.

Supply is going down through that little kind of flat range with no progress,

right? Okay. This is absorption, right?

And then look at the character with which the price rallies out of that.

Right. A lot of demand again. So demand increases on value buying.

Supply decreases through the absorption and then demand increases again and

pushes the price in synchronicity to the upside.

Okay, so another thing here about number two.

Let's talk about, okay,

so size of the spread closes.

We've talked about the intention.

Okay, and we said that the intention seems to be not to be a major sign of

weakness, but either a minor sign of weakness or a spring, and we're

rally. And looking at the stock, we've seen a lot of buying, right? So we saw a

lot of buying here, and then we see some buying in this area.

Okay, one more item here, because this is a very kind of like heavy content

chart for us.

So we define that there is some buying in this area, the price stopped from

going up.

We've defined some buying here in this area and also on the way up.

Well, what happens in between in phase B?

Is there anyone that is buying in phase B or is there anyone who is selling in

phase B?

Anybody that matters, you mean?

What do you think? They bought in here, and then what do they do next? What

does Phil do next?

Looking at the volume signature.

Nothing,

I guess, is the right answer. He's inactive.

The volume's dropping off, and then we kind of have it jump up again.

Let's think about the market participants.

CO is going to be comprised of value strategies and momentum strategies,

right? So value and growth or trend followers.

So they are buying here, CO is operating here, CO is operating here.

In between, let's say the momentum trend followers got into this trend somewhere

here, maybe on the breakout.

What do they do here?

Well, it's not progressing to the upside.

So they're on the second test. So it went up.

Maybe they're selling because, you know, they're expecting an overbought

condition. But then on the second test, you know, the volume really picks up and

no more upward progress.

So it looks to me like there's.

Like some supply coming in, so they're getting out.

They're getting out.

Everything's correct, Eric.

Everything's correct.

So I just have to have more high conviction in what you say, right? But

comes with practice. That's going to come.

So this is the trend followers that are buying.

They are thinking, okay, it's taking off. We're seeing kind of like this

We saw the climactic action.

We got to get in.

So they're getting in on the way up in this area right here, and then they stop

buying.

As they are in this position and the CEO in this position, their behavior

starts to differ.

The trend followers are going to be all relying on the performance at this point

of time. For the CEO, performance at this point of time is not as important

because they are still getting into the position.

their preference to accumulate the position at the lowest prices, so

they will be waiting for the value again.

Trend followers cannot afford this. They have to get in into this position, and

then they have to bring to their clients some kind of performance matrix where

they say that, listen, we got into this stock, and then it just took off, and we

are producing absolute return and relative outperformance.

So they might have held in for that first reaction down to the top of the

trading range. And then on the next rally, which looks poor, until it gets

of up to the top, the volume really starts coming in. There's no further

progress. And then it's like, okay, this isn't going up anywhere. We're out.

Absolutely.

So here they see in deterioration.

in both absolute and relative terms.

And then they're starting to sell on the way out and they're starting to

capitulate. So here, you know, there is a selling by

ITFs, institutional trend followers, into the value, into the strength.

And then they start selling into the weakness, right? So capitulation,

capitulation.

and then kind of like this general capitulation.

So a small downtrend, which we could break down into those same segments,

where we see that not necessarily CO who bought as a value investor is selling,

but the trend followers, just because the price just goes down and they don't

want to be in the position that underperforms on both sides. They've

that position for a quarter and it hasn't really... Right.

gone back up the way they expected so and this is the thing with the double

bottoms this is the pattern

double bottom one and two phase b whenever it

spends time here it shows strength long -term strength and usually

this type of stocks really great stocks for us to pick up into phase C, just

because we saw what strengths we had in phase B. It basically gives us an idea

that CO and trend followers got into the position, trend followers got out,

and that's the last supply that the CO gets at the point of value.

So now think about this, absorption of the supply,

absorption of the supply, and then absorption of the supply again. What

happen with the stock?

It's not just going to go up.

When supply is exhausted and phase B is showing that strength, it's going to

run.

So we're probably going to have both increasing the momentum and the

All right. So I guess the thing that's a little misleading is that selling tail

on the second last bar, but that could just be the normal reaction at the top

the range, and we're forming an LPS type thing is what I think you're

suggesting. Yeah, absolutely.

And think about the current market. We just kind of had today this type of bar,

right? So we might be expecting, I mean, today's bar, suggest that the next

movement, you know, tomorrow is going to be 50 -50.

50 % to the upside, 50 % to the downside.

I mean, like, that's what this bar tells us. Why to the downside?

Well, it has a supply tail.

Why to the upside?

Well, we're still in the upswing.

We have not had a reversal.

So, you know, there might be some absorption here.

And not a lot of supply on that either.

that second last bar, right? Very different, lower supply. Actually, both

this last two bars, right? Not a lot of supply.

So it does look like a potential LPS.

So now combining all of this together and just kind of like thinking this

through, we see how stop in action is being tested.

Then a lot of investors are getting in.

They're spending a lot of time in this trade.

Some of them are getting out.

There is an attempt to commit to the downside, yet COO is coming in and

at this point.

Very bullish behavior on the rally, and the last point of support has no supply.

Biases to the upside.

We know that stock is going to outperform the group, and we also know

likely we're going to have acceleration to the upside.

Why don't we do this? It's 5 .30, 5 .33.

So I'm going to show you guys what comes after

for these two stocks, stock number one and stock number two. And then next

class, we're going to continue with this exercise.

Okay, so for that, so that I wouldn't show you everything, I'm going to stop,

and then I'm going to show you what happens.

Okay, let me know when you see my screen.

Yeah, I can see it. Okay, great. So stock number one, industry group number

we were talking about this action right here

into the climactic action. We said that maybe there is some kind of preliminary

support, selling climax. If we are going to have a bar like this that reverses,

that climactic action and that bar is going to have that momentum

characteristics. This is going to act as the reversal and we would be expecting

some kind of automatic rally.

We said that most likely we're going to come to the point of the preliminary

support. There was another test here that could spook us here, but the price

go exactly in that range.

Okay, so this is where we are. We're going to analyze this next step.

in the next class but let's look at stock number two here it is all

right so both the group and the stock went up but what's important to us is

just to see a couple of things did the stock outperform the group eric what do

you think uh clearly yes okay did we have out of phase

c you know the story that we've created a situation where the stock has moved

with such bullish characteristics where we had increase of the momentum increase

of the velocity and so on so forth did we do that yeah very little down

reactions on that whole up move exactly so why did it happen so much absorption

here so much absorption here there's a lot of strength in phase b

The group is confirming.

Please note, and for the November special, we're going to be talking about

momentum and velocity, two different things.

Momentum is accelerating as the velocity is accelerating.

And then what happens further with the momentum?

We see this from the spread. We see this from the swings, right? So shorter

swings, smaller spread.

What does it mean?

momentum is decreasing, velocity is decreasing too.

It takes more time for us to travel the same distance as we've traveled before.

So velocity is decreasing as well.

We could be expecting some kind of reaction, but not necessarily right

in the near future.

And then the last leg is very interesting because Velocity -wise, it's

probably somewhat the same or close to that or slightly less.

But momentum clearly is going down.

We could have situations when momentum deteriorates and velocity kind of stays

the same.

So momentum accelerates the velocity to a certain level, and then velocity could

stay at that level, and momentum could start going down.

And this is just, like, you know, some of the things that we will be discussing

on Thursday.

All right, great. Eric, really good job.

You know, just keep grinding. I can't say anything.

You know, like, keep grinding.

Soldier on, they say.

Exactly. Thank you. Cut wood, carry water. There is nothing else for us to

All right, guys.

Thank you, Eric.

Thank you.

All right, guys, this was a lot of fun. So let's do this next week again.

I definitely might show up for next class.

So Thursday, tomorrow, WMD, for those of you who are attending Thursday,

for those who want to, you know, dive in into the momentum, volume and

structure, the class is on. And then next Tuesday, I'll be expecting you guys

here. Thank you guys so much.

And I'll talk to you in a week.

Bye -bye.