All language subtitles for 📉 How Richard Wyckoff Explained False Breakouts (Spring & Upthrust Secrets) - Richard Wyckoff Trading Methods (720p, h264)

There are few experiences in the stock
market more universally painful and

frustrating than being forced out of a
position at a low, only to watch in

disbelief as the price immediately
reverses and surges upward without you.

For most, this event is dismissed as
simple bad luck, a random sting of the

market or proof that the game is
hopelessly rigged.

But for Richard Wyckoff, this was not a
random event at all.

He recognized it as a frequent,
deliberate, and most importantly, an

identifiable maneuver.

He saw that these false breakouts to the
downside, which he termed springs and

shakeouts, were not acts of chaos, but
rather calculated tools used by the

market's most informed operators, the
composite man, to mislead the public and

eliminate competition just before a
major advance was set to begin.

He understood that these deceptive
moves, while ruinous for the uninformed,

offered a golden opportunity for the
astute analyst who knew what to look

This video will pull back the curtain on
these powerful maneuvers.

We will explore the manipulative
psychology behind them and provide a

step -by -step guide to the specific
price and volume characteristics Wyckoff

used to identify these bear traps,
turning what was once a source of

into a signal of immense opportunity.

Before we continue...

Please subscribe and leave a quick
comment, even one word.

This small action helps the algorithm
show this video to more people and tells

me these deep dives are worth making.

To understand how to identify a spring,
one must first understand the

manipulative logic behind why it is
created.

The composite man, after a long and
patient campaign of absorbing shares in

accumulation trading range, has one
final problem to solve before he can

profitable markup campaign.

He knows that there are still other
traders who have also recognized the

potential and have taken long positions.

He also knows that many traders have
placed their protective stop -loss

at the most logical place possible, just
below the well -defined support line of

the trading range.

These two groups of market participants
represent a potential source of supply

that could hinder his future advance.

If he begins the markup, these traders
will sell to take profits, and he will

forced to absorb their stock at higher
and higher prices.

His solution is the spring.

The maneuver has four distinct
psychological objectives.

First, its primary goal is to create
panic and mislead the public.

By driving the price decisively below a
support level that has held for weeks or

months,

He creates the powerful illusion that
the stock's period of stability is over

and that the prior downtrend is
resuming.

This appearance of acute weakness
frightens the last of the weak -willed

longholders into throwing their shares
overboard at the worst possible time.

Second, the spring is engineered to hunt
for and trigger the clusters of stop

-loss orders.

The composite man knows that a
significant number of shares can be

forcing the price down to the level
where these stops are placed.

This allows him to absorb a large block
of stock in a very short period of time

without having to bid the price up to
acquire it.

It is a highly efficient method for
consolidating the last of the available

floating supply.

Third, the move is designed to trap
bearish traders.

Breakout traders who play the short side
will see the break of support as a

clear signal to sell short.

When they do so, they are effectively
selling shares to the composite man.

These new shorts are now trapped, and
when the price reverses and begins to

up, they will be forced to buy back
their positions at higher prices.

Their covering provides additional fuel
and buying demand that helps propel the

subsequent markup phase.

Fourth,

The spring serves as a final, definitive
test of supply.

Before committing the vast resources
required to push a stock significantly

higher, the composite man wants to be as
certain as possible that the major

selling is over.

By breaking the price below support, he
invites anyone who is still inclined to

sell to do so.

If this break fails to produce a
significant cascade of new selling, He

his final confirmation that the supply
has been exhausted and that the path of

least resistance is now definitively
upward.

With the psychology of the maneuver
understood, we can turn to its specific

anatomy.

A spring is not simply any drop below a
support line. It is a specific event

with a clear context and identifiable
characteristics.

The first and most important rule is
context.

A true spring can only occur at the end
of a prolonged and clearly defined

accumulation trading range.

A price break below a support level in
any other context, such as in the middle

of a clear downtrend, is simply a
continuation of that downtrend.

The spring is a terminal event that
concludes a period of preparation.

The analyst must first have evidence
that accumulation has been taking place

before he can even begin to look for a
spring.

The price action of a spring is its most
visible feature.

It is a sharp, often rapid and decisive
thrust below the support line that has

contained all previous reactions within
the trading range.

It is designed to look convincing, to
give the clear impression of genuine

weakness.

The extent of the penetration can vary
from a fraction of a point to several

points, depending on the price and
volatility of the stock.

The true secret to identifying a spring,
however, lies in analyzing its volume

signature.

Wyckoff identified two distinct types of
springs, each with a different but

equally powerful bullish implication.

The first is a spring on low volume.

This is arguably the most powerful
bullish signal of the two.

A thrust below support on conspicuously
light volume is a direct and unambiguous

message from the market.

There is no supply.

It indicates that the selling pressure
has been completely exhausted.

The composite man has broken the price
down into new low ground, and instead of

meeting a wave of selling, he has found
a vacuum.

The sellers are gone.

This is proof positive that the
accumulation campaign has been

the stock is ready for an immediate and
often aggressive advance.

The second type is a spring on high or
climactic volume.

In this scenario, the break below
support does succeed in triggering a

number of stop -loss orders.

and inducing a final wave of panic
selling from the public.

This appears on the chart as a very high
volume bar.

While this may look bearish on the
surface, its interpretation depends

on the price action that accompanies it.

If the price stops going down on this
high volume and then begins to reverse,

is a sign of strength.

It shows that the composite man was
present and that his buying power was

sufficient to absorb the entirety of
this final wave of selling.

without allowing the price to collapse
further.

The high volume represents the
successful transfer of the last of the

from weak hands to strong hands.

This leads to the final and most crucial
element in the anatomy of a spring, the

confirmation.

The true secret to a spring is not the
break below support itself, but the

character of the price action that
immediately follows.

A genuine spring must be confirmed by a
swift and decisive recovery.

The price must not linger in the
territory below the old support line.

It must quickly reverse and climb back
into the trading range, reclaiming the

support level.

This rapid recovery is the non
-negotiable proof that the move below

a false breakout.

It proves that the buying power that
appeared at the low was superior to the

selling pressure.

A price that breaks support and then
stays down or rallies feebly back to the

underside of the support line only to be
met with more selling.

is not a spring.

It is a genuine breakdown and the start
of a new markdown phase.

The confirmation, this quick reversal,
is what turns the spring from a point of

fear into a point of maximum
opportunity.

To make these concepts practical and
immediately useful, we can distill the

identification of a spring into a simple
but effective checklist.

This is the mental framework a Wyckoff
analyst uses to test the validity of a

potential bear trap in real time.

First, is the stock in a clearly defined
and prolonged accumulation trading

range after a significant prior
downtrend?

Without this context, the signal is not
valid.

Second, has there been a clear and
decisive price penetration below the

established support line of this trading
range?

Third, what is the character of the
volume on the break?

Is it conspicuously low, indicating an
exhaustion of supply?

Or is it climactically high, indicating
a powerful absorption of the final wave

of selling?

Fourth, and most importantly, has the
price quickly and decisively rallied

above the old support level, reclaiming
its position within the trading range?

If the answer to all four of these
questions is yes, the analyst has

a high probability buying opportunity.

Even with a clear checklist,

Traders often make critical errors when
attempting to trade this powerful

maneuver. Understanding these common
mistakes is as important as

the signal itself.

The first and most dangerous mistake is
confusing a genuine breakdown with a

spring. A trader eager to find a bottom
may see any move below support as a

potential spring.

The key difference lies in the
confirmation.

A genuine breakdown which signals the
start of a new markdown phase will have

follow -through.

The selling pressure will continue and
the price will stay below the old

level.

Any rally will be weak and will fail at
or below the underside of this old

support, which has now become new
resistance.

A spring, by contrast, fails to produce
any meaningful follow -through selling

and quickly snaps back.

The second common mistake is buying too
early.

A trader may anticipate a spring and buy
the stock as it is breaking down,

before the price has confirmed its
recovery.

This is a highly dangerous practice.

It is an attempt to catch a falling
knife.

The correct Wyckoff procedure is to wait
for the confirmation.

The trade should only be entered after
the price has proven its strength by

rallying back into the old trading
range.

The lowest risk entry point is often on
the first small pullback after this

recovery, a maneuver that tests the
reclaimed support line.

By waiting for this confirmation,

The trader sacrifices a few ticks of
potential profit in exchange for a much

higher probability of success.

To see these principles in action, we
turn to the historical examples from

Wyckoff's own chart books.

A classic case is the action of Anaconda
Copper in 1935.

After a long period of what appeared to
be accumulation, the stock experienced a

final, brutal shakeout from February
into March.

The price plunged through all its prior
support levels, falling from above 11 to

a low near 8.

This move had all the characteristics of
a final cleansing action.

Crucially, as the market averages were
still weak, Anaconda began to show

superior comparative strength by
refusing to make new lows and holding

The selling climaxed in mid -March, and
the price then quickly reversed,

climbing back above the old support
levels.

This confirmed the shakeout and set the
stage for a massive advance that more

than doubled the stock's price in the
following months.

Another powerful example is the terminal
shakeout in Allied Chemical in 1932.

After a long period of building a cause,
the stock experienced a sharp downward

drive from 55 to 43.

This move was clearly identified by
Wyckoff as a shakeout, because the stock

immediately found support and began to
edge steadily upward.

with volume drying up on all minor
reactions.

This confirmed that the supply had been
exhausted, and it preceded a bull market

in the stock that carried it to 135.

In every case, the pattern is the same.

A period of preparation, a final
deceptive move to the downside, and a

confirmation through a swift recovery
that signals the true intent of the

composite man.

Having thoroughly examined the mechanics
and psychology of the spring and the

shakeout, The Wyckoff analyst
understands how the composite man clears

market of supply at the bottom.

We now turn our attention to the top of
the market, where the same manipulative

logic is applied in reverse.

Just as a spring is designed to create a
false impression of weakness, its

mirror image, the upthrust, is
engineered to create a powerful illusion

strength.

It is the final deceptive act in a
campaign of distribution.

designed to trap the last wave of
enthusiastic buyers at the very peak of

market move.

Understanding this maneuver is just as
critical as understanding the spring,

it provides the clearest and most
reliable evidence that an advance is

that a significant decline is imminent.

The upthrust is the composite man's
signal that he has completed his selling

is now ready to allow the stock to seek
lower levels.

The psychology behind the upthrust is
rooted in the public's inherent bullish

bias. and their fear of missing out.

After a long and sustained advance,
public excitement is at its peak.

News is overwhelmingly positive and
stories of quick fortunes abound.

The composite man who has been quietly
distributing his shares to this wave of

public buying needs a final event to
unload his remaining inventory at the

highest possible prices.

The upthrust serves this purpose
perfectly.

Its objectives are the mirror image of
the springs.

First, it is designed to create a state
of euphoria.

By pushing the price to a new high,
above a well -defined resistance level,

signals to the public that the strong
uptrend is resuming with even greater

force. This entices the last of the
hesitant buyers to jump in, fearing they

will miss the next great leg up.

Second, the upthrust is engineered to
hunt for and trigger the stop -loss

of short sellers.

Traders who have been bearish on the
stock will have placed their protective

stops just above the obvious resistance
line.

The push to a new high is designed to
catch these stops, forcing the shorts to

buy back their positions at a loss.

This wave of forced buying provides
additional demand into which the

man can sell his shares.

Third, and most importantly, the
upthrust provides the final,

of public demand.

that the composite man needs to complete
his distribution.

He uses the excitement of the breakout
to new highs as the perfect cover to

his large line of stock into the market,
transferring the last of his holdings

to the weak hands of the euphoric
public.

Once this transfer is complete, the
stock is in a technically weak position,

the composite man has no further
interest in supporting the price.

The anatomy of an upthrust is a direct
reflection of this manipulative intent.

Just as with the spring, context is
paramount.

An upthrust is a valid signal of a top
only when it occurs after a prolonged

advance and within a clear distribution
trading range.

A move to a new high in the early stages
of a powerful young uptrend is not an

upthrust. It is simply a continuation of
the trend.

The upthrust is a terminal event that
marks the exhaustion of demand after a

long campaign.

The price action of an upthrust is a
push above a well -defined resistance

that fails to hold.

The stock may look incredibly strong for
a moment, but it is unable to sustain

its gains and quickly falls back below
the resistance line.

Once again, the most vital clues to the
true nature of the move are found in the

volume signature.

An upthrust typically occurs with one of
two distinct volume characteristics.

The first is an upthrust on
conspicuously low volume.

The price pushes to a new high, but the
volume is unusually light.

This is a powerful sign of weakness.

It demonstrates a lack of genuine
demand.

The move has no force, no effort behind
it.

It shows that the composite man is not
participating in the buying and that the

public's buying power has been
exhausted.

Such a move is doomed to fail as soon as
even a small amount of supply appears.

The second and more common type is an
upthrust on high or climactic volume.

In this scenario, the price pushes to a
new high on a massive burst of volume,

but it makes little or no further upward
progress and then stalls.

This is a classic example of the law of
effort versus result showing a fatal

divergence.

The immense effort, which is the high
volume, is failing to produce a

corresponding result which would be a
sustained price advance.

This indicates that the apparent
breakout is being met with an

of selling or distribution from the
composite man.

He is using the public's excitement to
unload his shares, and his supply is so

great that it is completely absorbing
all the demand.

Following either type of upthrust, the
definitive proof of the maneuver is the

confirmation.

the failure of the price to hold the
breakout.

The stock will quickly fall back below
the resistance level and into the old

trading range.

This failure is the clear signal that
the breakout was false and that the

have been trapped.

For the Wyckoff analyst, identifying a
confirmed upthrust is not only a signal

to exit any long positions immediately,
but it is also one of the safest and

most reliable signals to initiate a
short sale.

as it indicates that supply is now in
control and a markdown phase is the most

probable outcome.

To make the identification of this
critical topping signal a practical and

repeatable skill, we can establish a
clear checklist for the Wyckoff analysts

follow.

This framework ensures that a conclusion
is based not on a single observation,

but on a confluence of evidence.

First, Has the stock experienced a
significant and prolonged advance, and

now in what appears to be a distribution
trading range?

Second, has there been a clear price
penetration above the established

resistance line of this trading range?

Third, what was the character of the
volume on the break?

Was it suspiciously low, indicating no
genuine demand?

Or was it climactically high, with
little or no subsequent upward progress,

indicating heavy distribution?

Fourth, and most importantly, has the
price quickly and decisively fallen back

below the old resistance level, failing
to hold the breakout?

If the answer to all four of these
questions is yes, the analyst has

a high probability selling or short
-selling opportunity.

Just as traders make predictable errors
when faced with a spring, they make a

similar set of mistakes when confronted
with a potential upthrust.

Understanding these pitfalls is
essential for avoiding the bull trap.

The most common mistake is shorting too
early.

A trader may anticipate an upthrust and
sell short as the price is breaking out,

before the maneuver has confirmed its
failure.

This is the equivalent of stepping in
front of a speeding train.

The stock may, in fact, be experiencing
a genuine breakout or a reaccumulation

phase. and the premature short seller
will be forced to cover at a significant

loss.

The correct Wyckoff procedure is to
always wait for the confirmation.

The short sale should only be considered
after the price has failed to hold its

gains and has fallen back into the
trading range.

The second common mistake is ignoring
the context.

A trader might see a small temporary
push to a new high in the middle of a

powerful healthy uptrend and mistake it
for an upthrust.

As previously stated, an upthrust is a
terminal event that occurs within a

distribution range at the end of a long
advance.

A minor new high that is quickly
followed by the resumption of the

not an upthrust.

It is simply part of the normal two
-steps -forward, one -step -back rhythm

bull market.

The analyst must have prior evidence of
distribution, such as labored rallies

and increasing volume on reactions.

before he can begin to interpret a move
above resistance as a potential

upthrust.

To see the upthrust in action, we can
look to the historical examples Wyckoff

used to instruct his students.

The climactic top of the 1929 bull
market, as analyzed on Wyckoff's point

figure charts of the market averages,
provides a macro example of this

principle. After months of building a
massive distribution formation, the

made a final euphoric push to new all
-time highs.

This move, however, was the terminal
upthrust, designed to draw in the last

the public's buying power before the
collapse.

A more specific example can be found in
Wyckoff's analysis of a topping

formation in the stock reading.

He describes a moment where the stock,
after a long rise, experienced a sudden

burst of activity.

with tens of thousands of shares trading
within a very narrow range near the

high.

This was a clear sign of effort without
result.

The immense volume failed to push the
price materially higher, indicating that

massive block of stock was being
distributed to the public.

This upthrust action marked the
immediate top, and the stock promptly

severe decline.

In every case, the anatomy is the same.

the creation of a powerful illusion of
strength that is not supported by the

underlying evidence of volume, followed
by a swift reversal that traps the bulls

and signals the victory of supply over
demand.

For those who wish to truly master the
lessons discussed here, it is essential

to study them from the source.

Please take note of a unique new edition
of Richard Wyckoff's masterpiece How I

Trade and Invest in Stocks and Bonds by
Max Davidson.

It has been meticulously adapted for the
modern trader, complete with

explanations that make Wyckoff's
timeless wisdom more accessible than

For anyone who wants to truly absorb the
lessons we are discussing, this adapted

edition is an indispensable part of your
library.

The link to this book is located in the
description of this video.

The true power of the Wyckoff method is
not in guessing the direction, but in

reading the logic of the composite man's
actions.

Understanding the secrets of the spring
and the upthrust is perhaps the ultimate

expression of this principle.

These maneuvers are the composite man's
most direct communications, his clearest

statements of intent.

They are deliberate deceptions, designed
to prey on the public's most

predictable emotional responses, fear at
the bottom and greed at the top.

The analyst who learns to identify these
false breakouts to understand their

manipulative purpose and to read their
telltale signatures in price and volume

elevates himself from a mere participant
in the market to a reader of it.

He learns to use the composite man's own
deceptive tactics to his advantage,

buying when the trap is sprung on the
bears and selling when the trap is

on the bulls. This is the essence of
trading in harmony with smart money.