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Hello, everyone. Today is February 25th,
and this is our session number eight of

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the Wyckoff Trading Course.

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Thank you for sending your homeworks,
your notes, your questions. We're going

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go through this today.

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Next session is going to be March 4th.

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At the same time, a few comments here,
really quick. We have a lot of things to

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cover today, so this is going to be
really fast.

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I kind of highlighted the thoughts that
I wanted to talk about from your

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comments. You could read the full
comment after the class when you watch

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video.

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So here is a comment. I'm moving from a
state of feeling I'm understanding this

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moment to total confusion.

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I'm sorry. I'm moving from a state of
feeling I'm understanding this to

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of total confusion.

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And then another comment here. I
interpret this as a good sign of

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which I really like.

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You said to grind it out.

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And this course is so interesting. Okay.

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Yeah, so definitely from a teaching
-learning perspective, this is

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a great comment, and I'm really pleased
to hear that. Why?

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Well, because...

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The course is constructed in such a way
that I'm giving you layers of

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information.

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So, for instance, we started with the
price structural analysis, and there

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so many sublayers under that subject.

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Now we switch to the volume and price
analysis.

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And the first session was the hardest
session for you guys.

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A lot of you were telling me how it was
difficult.

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to understand those concepts and they
were kind of like not very intuitive

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concepts.

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So therefore, you are absolutely going
to get into the point of confusion again

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in the course.

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Why? Well, because that knowledge is not
there or it's not maybe

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a correct knowledge. Maybe it's not
cemented correctly.

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So we kind of...

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Build the foundation again.

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And to build that foundation, you've got
to get uncomfortable first with

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something that you don't know.

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And then just trust the process. Trust
me as a teacher to get you to the place

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of understanding.

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And this is what I'm receiving today
from all of you throughout the week, is

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that the message in the email is like,
I'm getting it. Yeah, I am getting more

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comfortable. I understand the concept.
So that's great. That is exactly the

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process that we want to go through.

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all of the concepts that we have, all of
the concepts that we go through.

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Next comment. And here, I just want,
again, you know, kind of like to go to

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same statement of grind it out. You
know, just it's the stuff that you have

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learn. If you really want to use this in
a very practical way, either

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understanding the market, analyzing the
markets, or trading the markets, then

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you have to study.

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And you have to, you know, study
consistently.

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I was just today watching the video with
Arnold Schwarzenegger, and he was

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talking about, I don't know what it was,
but he was talking about how he was

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practicing for the Mr.

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Universe and then the movie career and
the politics and so on and so forth.

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Every day I was in the gym for five
hours.

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People were asking me why, and he said I
have a goal.

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So we have a goal here. We have a goal
to understand this material to the point

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where we can practically apply it to the
markets and extract the money from the

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markets. That's our goal.

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So let's keep grinding to the point
where...

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we go from a state of feeling of
understanding to the confusion and then

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understanding again.

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And that would definitely make me so
happy.

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This first lesson has really helped to
solidify things in my mind, even though

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there is so much more to learn for
certain.

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Now, after only seven lessons, I can
visualize the markets in a whole

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light. And this is very important as
well.

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This is the time when students come to
me and they say, like, whoa, now I see

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differently. Now I see the structures
everywhere. I see the change of

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environments. I see how different phases
unfold.

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I mean, obviously, I have to learn more
and I have to develop the skill, but

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that's the initial feeling.

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It's like a feeling of excitement that
you see the market in a different light

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now, and it makes more sense. Why? Well,
because it's more systematic.

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You know, it's more kind of like
something that where you translate the

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that comes into your mind through the
visualization, through the chart. And

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you're saying that I know this pattern.
You know, it seems like this is the

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behavior of composite operator or, you
know, something else.

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So if you are there, if all of this
changes, that...

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different students are reporting to me
via emails, are happening to you, you

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in the correct phase of your studies and
you're developing correctly.

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If you feel that you're not there, if
you feel like still the price structural

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analysis causes some hesitation, some
kind of like level of uncomfort, and

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specifically with the volume and spread
analysis, you're still uncomfortable.

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You know, shoot me an email and say,
like, what can I do?

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And my answer is probably going to be
kind of the same. There are multiple

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options here.

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And if you want to continue with the
studies and understand this material

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well, then my first suggestion would be
continue with the course right now.

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Finish the course.

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And then next cycle, which will be a
summer cycle, enroll as an alumni.

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The alumni rate.

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for the next cycle is going to be $398,
something like $400.

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I'm doing this with the purpose that
some of you are going to come back.

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There are quite a few alumni in this
class, and it's always beneficial to

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this material. So if you feel like
you're a little bit behind, no worries.

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You could repeat the course again. You
could just watch the videos again. That

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would be the easiest, cheapest way to do
this.

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But in general, I'm pretty satisfied
where the group is.

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So we're just going to build on what we
have built in the seven sessions.

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And specifically, volume and spread
analysis still needs a lot of work,

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needs a lot of repetition for us to feel
comfortable about that. So for the next

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two, three sessions, we'll definitely do
that.

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Today, we will go first through volume
phase analysis.

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This is where we are identifying volume
in the specific phases of the

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consolidation. And today, specifically,
we will be talking about supply

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signatures, whether we identify those in
accumulation or distribution.

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Next session, session number nine.

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We'll talk about the volume phase
analysis again, and we'll talk about the

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demand signatures.

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We're going to go into some Q andA. There
were a couple of very interesting

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comments and questions. I want to go
through those.

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And then we're going to come back to our
group exercise on the supply and

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demand.

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And as usual, I look forward to hearing
from volunteers.

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Again, you know, our volunteers are
going through the exercise of me giving

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guys live feedback. So be prepared.
Whenever I'm going to ask you, just say

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and I'll unmute you and we'll do this.

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Group exercise is this, I'm sorry,
homework is a group exercise again.

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And this is where, again, I want to
receive your notes after watching.

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recording again. We'll talk about this
at the end of the session again. It's so

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crucial to do that, especially if you're
extremely serious about this stuff.

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Again, I totally feel okay with students
who

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are more advanced students and I feel
from them

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kind of like a determination to get this
material and to assimilate this

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material to the highest level of
understanding.

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And this type of students, I'm going to
be most strict with, and I'm going to

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push you guys so that, you know, you
would produce even more during this

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time with me.

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Having said this, for somebody who's
just attending classes and just... to

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observing the classes and listening and
kind of incorporating it at just the

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level of listening, that's fine too.

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You know, I totally understand where you
are and I think the most important

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thing for a student like yourself is
just to listen, just to be present. But

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be present for this two and a half,
three hours with full capacity.

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So if this is the only time when you can
listen to this recording or when you

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can attend a live class, do me a favor
and yourself a favor.

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Be fully engaged and be fully kind of
like present, and that will go a long

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way.

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All right, next session, we're also
going to go into some volume case

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Those are one of my favorite case
studies, just in general, because volume

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just so fascinating to me.

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how we look at the volume, how we
interpret the volume, especially in the

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relationship to the price. So we're
going to look at some of the case

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Okay, let's go to the material.

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And we're going to start with the volume
phase analysis.

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And specifically, we'll discuss the
supply signatures in accumulation and

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distribution. The question that I want
you to keep addressing in your mind is,

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what are the main supply signatures?

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in accumulation and distribution
formations.

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How do they differ?

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So supply could increase both in
accumulation and in the distribution.

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Supply could decrease in both
accumulation and in distribution.

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So what are the differences there? And
what are the price structures would look

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like if supply signature occurs under
different bias definition?

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All right, let's look at the first one.
So this is a schematic that I built for

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you guys a long time ago.

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The most common question here,
unfortunately, is not related to the

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signature. The most common question here
is, why is it not a horizontal range?

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Well, guys, I don't know. I was just
drawing.

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I was not thinking. It just kind of came
out of the inspiration, and this is

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what I drew. And when I drew it, I
realize that it's just a downsloping

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So there is no intention here to show,
you know, let's say an increase of the

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supply signature and then relate this to
the specific structure.

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It's just what it is, just a schematic.
It's the theoretical representation of

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the supply signature in the accumulation
throughout different phases.

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And we'll talk about the two main
examples.

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of the accumulation -reaccumulation
supply signature.

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That is example number one and example
number two.

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These two examples have very specific

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characteristic of

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supply signature between phases A and C.

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As you could see, going from phase A to
phase C, we do have a decrease in

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supply signature.

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And that's a very important thing for us
to see.

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Because everywhere else, we're going to
see either increase into phase B

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or increase of the supply into phase C.

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So the more common supply signatures and
accumulation, reaccumulation, the ones

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that we really look for...

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to see and identify are going to be
where supply in general, and we're going

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say that this is a long -term supply
signature, supply would go

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down from phase A to phase C.

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Now, there could be some variations on
the volume signature in phase B.

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Sometimes it's going to dry out a lot,
and then it's going to locally increase.

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from phase B into the phase C test.

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And then we're going to say that from
phase A to C,

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which is kind of like a long -term
supply signature for us in the

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supply went down. And this is a bullish
sign.

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And then from phase B to phase C.

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which is a short -term supply for us,
more of the local formation supply.

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going to say that supply could
potentially increase, but that also is

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draw an increase in the demand signature
because increase of the supply

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signature is going to be identified by
the selling of weekends.

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selling by weak hands, I'm sorry.

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And then the increase of the demand is
going to be identified by strong hands

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buying.

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Weak hands are selling because of fear.

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It's the second point of fear.

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Strong hands are buying because there is
liquidity in phase C and value.

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all right um and then a variation where
phase b still would have

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a considerable supply relative to phase
a so phase

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b here the characteristics of the supply
is going to be still considerable

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and that requires some kind of testing

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and therefore

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diminishing supply signature into phase
C. So these are the two most common

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supply signatures that we want to see in
the accumulation, reaccumulation.

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Now let's look at some of the supply
signatures that are going to be

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somewhat difficult for us to interpret.

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And we would really have to rely a lot
on the price action in the work like

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this.

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Supply signature number three has a very
interesting increase

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of the supply into phase B.

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And usually that type of increase of the
supply into phase B is going to be

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associated with some kind of, you know,
shakeout type of action, shakeout type

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of reaction.

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Let's think about the sentiment here.
Why is it that there is a lot of

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Think about what has happened before, a
downtrend, a stop in action. So supply

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was increasing a lot at this spot.

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So the sentiment is still very much
bearish. And then if that sentiment

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persists, then on the next reversal
after the automatic rally

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or after some kind of upthrust, we are
going to see that the bears are going to

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come back.

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and they're going to still be dominant
on the sentiment side.

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And that's going to produce a wave of
selling that could take us to a lower

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Now, in this case, you know, the
downslope actually works really well

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definition.

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So we would see that increase in phase C
of supply.

229
00:17:26,260 --> 00:17:28,540
We could see that the price might go.

230
00:17:28,890 --> 00:17:34,330
below the level of the support, and the
supply is gonna be higher than supply in

231
00:17:34,330 --> 00:17:35,630
phase A, the stock in supply.

232
00:17:36,090 --> 00:17:40,830
And then going into phase C, what we
wanna see, we wanna see two things.

233
00:17:41,590 --> 00:17:47,730
The first one is that the supply
decrease

234
00:17:47,730 --> 00:17:53,870
from B

235
00:17:53,870 --> 00:17:56,330
to phase C

236
00:17:57,040 --> 00:18:03,900
And then the second thing that we want
to see is supply decrease from phase A

237
00:18:03,900 --> 00:18:04,940
phase C.

238
00:18:05,740 --> 00:18:07,880
So why are those two important?

239
00:18:08,280 --> 00:18:10,760
Phase B supply is the highest.

240
00:18:11,660 --> 00:18:16,300
It almost sometimes could be identified
as the stopping supply.

241
00:18:16,500 --> 00:18:23,400
And in some cases, I see labeling
mistakes where phase B lower low looks

242
00:18:23,400 --> 00:18:24,440
like selling climax.

243
00:18:25,320 --> 00:18:28,140
But the change of character has already
come prior to that.

244
00:18:28,500 --> 00:18:32,280
So the change of character would define
phase A, would define the stop in

245
00:18:32,280 --> 00:18:34,000
action, would define the automatic
rally.

246
00:18:34,320 --> 00:18:37,900
And then phase B would just have, you
know, a sign of weakness.

247
00:18:38,520 --> 00:18:43,760
Sometimes it happens just because the
sentiment has not changed and there are

248
00:18:43,760 --> 00:18:46,580
still quite a lot of sellers in the
market.

249
00:18:47,280 --> 00:18:52,300
And then, obviously, we could also argue
that the quality of the demand itself

250
00:18:52,300 --> 00:18:57,920
might not be sufficient enough in order
for us to

251
00:18:57,920 --> 00:19:04,140
create the low that is going to be on
the same level as the selling climax or

252
00:19:04,140 --> 00:19:05,780
more favorable higher low.

253
00:19:06,480 --> 00:19:13,140
So we want to see how supply in Phase C
is going to diminish relative

254
00:19:13,140 --> 00:19:14,840
to what we've seen in Phase B.

255
00:19:15,240 --> 00:19:22,000
So it has to be a somewhat considerable
decrease

256
00:19:22,000 --> 00:19:23,000
of the supply.

257
00:19:23,360 --> 00:19:30,180
And we also want to identify the
decrease of the supply from

258
00:19:30,180 --> 00:19:31,860
phase A to phase C.

259
00:19:32,400 --> 00:19:38,960
Because at the beginning of this trading
range, of this formation, phase A

260
00:19:38,960 --> 00:19:42,460
supply was a stop in supply in a way
that...

261
00:19:43,260 --> 00:19:49,480
It increased the liquidity, which
brought in the demand increase, and the

262
00:19:49,480 --> 00:19:54,400
overall volume signature has increased,
and that produced a stop in action. So

263
00:19:54,400 --> 00:19:58,600
I'm just saying stop in supply from that
point of view. But then going into

264
00:19:58,600 --> 00:20:05,400
phase C, we want to see that supply is
so exhausted, and it has been

265
00:20:05,400 --> 00:20:12,280
observed in phases A and phase B, that
supply in phase C is just negligent.

266
00:20:12,520 --> 00:20:17,080
No one else is selling at this point.
And that would be the timing for us to

267
00:20:17,080 --> 00:20:20,920
identify the beginning of the move for
this particular stock.

268
00:20:21,640 --> 00:20:26,360
Okay, supply signature scenario number
four.

269
00:20:26,940 --> 00:20:32,900
This one is even more tricky because we
have a very substantial

270
00:20:32,900 --> 00:20:35,120
supply of increase.

271
00:20:39,820 --> 00:20:41,040
Increase of the supply.

272
00:20:41,770 --> 00:20:43,110
going into phase C.

273
00:20:46,150 --> 00:20:49,010
So let's just think why this would
happen.

274
00:20:50,470 --> 00:20:54,210
Why would we have a period of
accumulation?

275
00:20:58,470 --> 00:21:02,410
And then at the end of the accumulation,
we're going to have almost like a

276
00:21:02,410 --> 00:21:04,010
climactic type of supply.

277
00:21:06,170 --> 00:21:09,970
Well, there are quite a few things that
could happen.

278
00:21:10,330 --> 00:21:15,630
in such a way that the structure, the
price structure, will be constructed as

279
00:21:15,630 --> 00:21:20,870
accumulation. And that supply signature
will be the highest in phase C.

280
00:21:21,450 --> 00:21:27,470
Imagine a situation where a composite
operator,

281
00:21:27,970 --> 00:21:32,130
strong hands, were accumulating the
stock for quite some time.

282
00:21:32,410 --> 00:21:37,450
And then the news, let's say some
earnings, or maybe some management

283
00:21:37,450 --> 00:21:38,450
maybe...

284
00:21:40,160 --> 00:21:46,620
unfavorable government ruling against
the company has happened.

285
00:21:46,800 --> 00:21:53,740
What that is going to produce is a quick
general liquidation out of

286
00:21:53,740 --> 00:21:55,200
this position by weak hands.

287
00:21:55,660 --> 00:22:02,080
And while this is happening, CO
accumulates with the purpose

288
00:22:02,080 --> 00:22:07,720
to have a sustainable business cycle
move.

289
00:22:08,170 --> 00:22:09,170
in the stock.

290
00:22:09,370 --> 00:22:14,510
So therefore, they see this increased
liquidity and opportunity and the point

291
00:22:14,510 --> 00:22:21,290
fear from weak hands as an opportunity
to load up even more, to create a

292
00:22:21,290 --> 00:22:23,850
very sizable position, to control more
supply.

293
00:22:24,450 --> 00:22:30,750
So therefore, they are absorbing a lot
of the supply that's coming in.

294
00:22:30,950 --> 00:22:37,390
And the not only supply signature,
demand signature is increasing.

295
00:22:37,960 --> 00:22:44,380
very rapidly, and the volume signature
increases rapidly just because of both

296
00:22:44,380 --> 00:22:46,100
supply and demand is increasing.

297
00:22:46,520 --> 00:22:51,620
In other words, only the CEO is
believing that the company is going to

298
00:22:51,620 --> 00:22:58,560
a bad news in the moment, and the CEO is
observing whatever supply from

299
00:22:58,560 --> 00:23:02,120
we can is coming at a very rapid pace.

300
00:23:02,720 --> 00:23:07,060
So that's what could happen here. So on
the price structure,

301
00:23:08,880 --> 00:23:15,420
we usually would see this type of moves
as sprints and

302
00:23:15,420 --> 00:23:21,520
rather deep sprints or just a shakeout.

303
00:23:23,440 --> 00:23:29,980
Please note that if this supply
signature is going to come on a sign of

304
00:23:29,980 --> 00:23:35,300
weakness, it's going to look the same.
Because if we're talking about the

305
00:23:35,300 --> 00:23:39,160
shakeout, and the major sign of
weakness.

306
00:23:39,480 --> 00:23:42,120
In a lot of cases, they might look the
same.

307
00:23:43,080 --> 00:23:49,240
And it's only what comes afterwards is
going to define in reality what it's

308
00:23:49,240 --> 00:23:50,240
going to be.

309
00:23:50,360 --> 00:23:56,240
So keep this in mind that we always have
to come back to the price structural

310
00:23:56,240 --> 00:24:00,840
analysis. We always have to see with the
increase in

311
00:24:00,840 --> 00:24:04,860
supply signature.

312
00:24:05,340 --> 00:24:06,340
What does the price do?

313
00:24:07,920 --> 00:24:08,920
All right.

314
00:24:13,780 --> 00:24:17,660
Let's go to the next slide. Well, let's
look at some of the examples.

315
00:24:18,540 --> 00:24:24,240
So here is our first scenario where we
see that there is a long -term

316
00:24:24,240 --> 00:24:29,740
deterioration of the supply from Phase A
to Phase C. And then locally, we could

317
00:24:29,740 --> 00:24:33,660
see that Phase B has kind of like a
smaller supply.

318
00:24:34,470 --> 00:24:38,190
And then locally, supply is increasing
going into phase C.

319
00:24:38,690 --> 00:24:41,870
So let's look at the example. This is
Amgen weekly chart.

320
00:24:42,330 --> 00:24:47,750
We have had an uptrend, so therefore
this is a buying climax, automatic

321
00:24:47,950 --> 00:24:52,890
or a shakeout, however you would label
this. I would probably label this as a

322
00:24:52,890 --> 00:24:53,890
shakeout. Why?

323
00:24:54,110 --> 00:24:57,810
Look at this bar right here with the big
lime signature.

324
00:24:58,510 --> 00:25:00,150
That suggests...

325
00:25:00,990 --> 00:25:06,370
some kind of in the reaccumulation, more
of the rotational shakeout type of

326
00:25:06,370 --> 00:25:09,590
action where some of the institutions
are taking profits.

327
00:25:09,810 --> 00:25:14,230
So they get rid of their position or
scaling out. And then other institutions

328
00:25:14,230 --> 00:25:16,810
seeing still a lot of value.

329
00:25:17,070 --> 00:25:20,230
And that usually happens in a lot of
leadership stocks.

330
00:25:21,150 --> 00:25:27,770
Boeing just recently, look at Cisco just
recently, and by recently I mean 2018,

331
00:25:28,170 --> 00:25:32,550
the trading ranges that they have had.
They have the same type of structure of

332
00:25:32,550 --> 00:25:37,890
upsloping reaccumulation range that
starts with the rotational distribution

333
00:25:37,890 --> 00:25:42,010
has elements of the shakeout action
right here on the increased volume,

334
00:25:42,110 --> 00:25:47,890
signature increase, spread, but an
ability to produce a significant result.

335
00:25:48,570 --> 00:25:50,990
and commitment to the downside below
support.

336
00:25:51,390 --> 00:25:53,550
So that's what starts the trading range.

337
00:25:53,750 --> 00:25:57,210
It's that shake out rotational
distribution type of action.

338
00:25:57,410 --> 00:26:01,890
So then the next rally is going to be
automatic rally and look at the

339
00:26:01,890 --> 00:26:06,890
characteristics of the automatic rally
here. A lot of volume coming in, a lot

340
00:26:06,890 --> 00:26:13,250
demand coming in and then it produces a
really good quick jump back

341
00:26:13,250 --> 00:26:15,090
to the area of the resistance.

342
00:26:16,460 --> 00:26:21,620
Those are the characteristics of the
automatic rally in the reaccumulation.

343
00:26:21,620 --> 00:26:27,020
just tells us that whatever supply has
come in, quickly it's being observed in

344
00:26:27,020 --> 00:26:31,620
phase A. And then the next test is just
going to be a test of what has happened

345
00:26:31,620 --> 00:26:35,900
on the changes of character twice, on
the way down and on the way up.

346
00:26:36,820 --> 00:26:42,020
So in that final test shows us that yes,
supply is under control and whatever

347
00:26:42,020 --> 00:26:44,640
supply is coming in, specifically on
this bar.

348
00:26:45,080 --> 00:26:50,500
right here after that it's even lower
low low throughout this local structure

349
00:26:50,500 --> 00:26:57,000
all right so then as we go through phase
b look at how supplies diminish and

350
00:26:57,000 --> 00:27:02,320
just stay in very very low and it's only
going into phase c that we're starting

351
00:27:02,320 --> 00:27:09,120
to have you know some volume spikes that
are not necessarily uh we're not

352
00:27:09,120 --> 00:27:13,450
present in phase b They were, but we are
looking also at kind of like the

353
00:27:13,450 --> 00:27:18,070
overall picture, overall volume
signature, right, or averaging. We're

354
00:27:18,070 --> 00:27:21,970
here, I don't know if you guys could see
this. This is the moving average right

355
00:27:21,970 --> 00:27:25,870
here on volume, and we see how the
volume signature diminishes, diminishes,

356
00:27:25,890 --> 00:27:30,690
diminishes, and then we have that volume
spike that has a little bit of the

357
00:27:30,690 --> 00:27:35,030
consistency of the increased supply.

358
00:27:36,550 --> 00:27:39,610
So we are seeing that.

359
00:27:41,170 --> 00:27:47,750
locally from phase A to phase B, a very
clear, definitive decrease of the

360
00:27:47,750 --> 00:27:52,010
supply. Look at the price, what the
price is doing with that decrease of the

361
00:27:52,010 --> 00:27:56,990
supply. Is there an ease of movement to
the downside where the price starts

362
00:27:56,990 --> 00:28:00,150
committing below specific levels of the
support?

363
00:28:00,550 --> 00:28:05,330
No, right? So every time we come to the
level of the support, we are springing

364
00:28:05,330 --> 00:28:09,470
back. We are springing back, springing
back, springing back.

365
00:28:09,980 --> 00:28:13,960
not even springing back, but going up
without touching the support.

366
00:28:14,260 --> 00:28:18,860
And we're not even touching the lower
support in this area right here.

367
00:28:19,080 --> 00:28:24,180
And all of those spring -type actions in
phase B, they happen much, much higher.

368
00:28:24,340 --> 00:28:30,020
So that is an element of strength. That
would act as a confirmation

369
00:28:30,020 --> 00:28:34,200
of what we've experienced in phase A.

370
00:28:35,060 --> 00:28:38,760
And you kind of could see at this point
how analysis...

371
00:28:40,199 --> 00:28:46,760
becomes more of the rolling over
analysis right so I've used this

372
00:28:46,760 --> 00:28:53,540
before and I really like this rolling
over analysis meaning

373
00:28:53,540 --> 00:29:00,360
that in phase a we are determining the
bias and then we are rolling over into

374
00:29:00,360 --> 00:29:03,240
phase B and we are confirming that bias

375
00:29:04,240 --> 00:29:08,760
phase B and then we are rolling our way
into phase C and we're confirming it in

376
00:29:08,760 --> 00:29:15,520
phase C so that way you have more handle
on the

377
00:29:15,520 --> 00:29:22,140
logic as it unfolds all right so locally
we could see that phase B

378
00:29:22,140 --> 00:29:28,820
supply is very low then slight increase
into phase C and I like how supply

379
00:29:28,820 --> 00:29:34,400
slightly increases into phase C it
doesn't have to be you know a big volume

380
00:29:34,400 --> 00:29:41,300
signature but even with this small
increase of the supply it

381
00:29:41,300 --> 00:29:46,980
tells us the story that whatever selling
we have by weekends

382
00:29:46,980 --> 00:29:49,400
it's not very strong

383
00:29:49,400 --> 00:29:54,300
and

384
00:29:55,470 --> 00:30:00,330
Because it's not very strong, then
whatever supply comes in could be easily

385
00:30:00,330 --> 00:30:06,410
observed by institutions at the levels
probably of a higher support level

386
00:30:06,410 --> 00:30:08,030
than lower support level.

387
00:30:08,230 --> 00:30:14,850
And we kind of see that as a spring
situation happens and relates to this

388
00:30:14,850 --> 00:30:21,810
support level in Phase B, not at the
support level in Phase A. And that's a

389
00:30:21,810 --> 00:30:22,810
big distinction.

390
00:30:23,160 --> 00:30:25,800
We'll talk about this more in the wake
of practicum.

391
00:30:26,040 --> 00:30:27,800
Those are more advanced concepts.

392
00:30:29,180 --> 00:30:34,140
And then, obviously, we want to compare
the emergence of the supply in Phase C

393
00:30:34,140 --> 00:30:39,780
to Phase A, and we're seeing, obviously,
a long -term deterioration of the

394
00:30:39,780 --> 00:30:44,920
supply. So all of those elements are
confirming our reaccumulation bias.

395
00:30:46,200 --> 00:30:51,360
Then, by itself, increase in the volume
signature.

396
00:30:52,560 --> 00:30:56,920
suggest that we could be possibly in
phase C.

397
00:30:57,540 --> 00:31:02,880
So all of those definitions for phase C
that we went through, we said that we

398
00:31:02,880 --> 00:31:04,500
need to have three tests.

399
00:31:06,460 --> 00:31:08,860
Then we need to have a second point of
fear.

400
00:31:09,720 --> 00:31:14,800
And look how second point of fear is
going to be related to that local

401
00:31:14,800 --> 00:31:16,620
of the supply from B to C.

402
00:31:17,480 --> 00:31:21,900
So that's that second point of fear. But
second point of fear in a lot of cases

403
00:31:21,900 --> 00:31:27,720
is just going to be obviously not as
fearful as our phase A.

404
00:31:29,040 --> 00:31:35,860
And then you could identify phase C also
by the

405
00:31:35,860 --> 00:31:36,860
volume signature.

406
00:31:41,200 --> 00:31:45,360
And specifically in this type of
structure, we're looking for the volume

407
00:31:45,360 --> 00:31:46,360
increase.

408
00:31:46,959 --> 00:31:51,660
or we're looking for the supply increase
and demand increase at the same time.

409
00:31:53,140 --> 00:31:55,840
So that's our volume equation right
there.

410
00:31:56,740 --> 00:31:57,740
Okay.

411
00:32:00,700 --> 00:32:02,380
Comments, questions, let me see.

412
00:32:09,280 --> 00:32:14,940
Any particular time period for the
moving average? So I don't know what the

413
00:32:14,940 --> 00:32:16,000
moving average right here.

414
00:32:16,600 --> 00:32:21,840
I would just go with some basic
definitions like 21, 22, 20.

415
00:32:22,320 --> 00:32:25,640
This would define the month to month
average, so something like this.

416
00:32:26,900 --> 00:32:32,460
On the weekly chart, though, you
probably would want maybe like two

417
00:32:33,160 --> 00:32:35,540
So that would be like 40 weeks, I
believe.

418
00:32:36,800 --> 00:32:38,260
Actually, not two quarters.

419
00:32:40,940 --> 00:32:43,720
63 days.

420
00:32:45,480 --> 00:32:49,320
So that would be, yeah, about 63 days.

421
00:32:51,040 --> 00:32:56,080
But I'm not necessarily using that type
of indicator. I already don't remember

422
00:32:56,080 --> 00:32:57,420
how it got in here.

423
00:32:57,880 --> 00:32:59,640
I think this is from TradeStation.

424
00:33:00,760 --> 00:33:06,000
So you could see and visualize the
volume in different ways. You don't have

425
00:33:06,000 --> 00:33:07,000
have the volume average.

426
00:33:07,140 --> 00:33:11,340
I am seeing that in this area right
here, the volume is completely different

427
00:33:11,340 --> 00:33:12,640
than, let's say, somewhere here.

428
00:33:13,440 --> 00:33:18,820
and then it just has some kind of
characteristics of the increased volume

429
00:33:18,820 --> 00:33:23,640
signature. So to me, the volume
signature still looks the same, right?

430
00:33:23,640 --> 00:33:29,720
going lower into B, slightly increasing
into C, and still there is a diminishing

431
00:33:29,720 --> 00:33:33,020
supply signature and volume signature
into C from A.

432
00:33:34,420 --> 00:33:36,680
Okay, great. Let's look at the next
example.

433
00:33:37,560 --> 00:33:41,120
And this one is where the volume
signature...

434
00:33:41,470 --> 00:33:43,750
in phase A is going to be the highest.

435
00:33:44,010 --> 00:33:49,990
And usually this is going to be a CO
seeking that opportunity to accumulate

436
00:33:49,990 --> 00:33:52,310
stocks at the point of fear.

437
00:33:53,350 --> 00:33:59,570
So accumulate majority of holdings in

438
00:33:59,570 --> 00:34:01,990
phase A.

439
00:34:04,170 --> 00:34:08,870
So we're seeing from the volume
signature that the stop in action is

440
00:34:08,870 --> 00:34:15,820
where supply is going to be the highest
and is going

441
00:34:15,820 --> 00:34:22,639
to reflect the supply that is of weak
hands and supply that is

442
00:34:22,639 --> 00:34:29,440
a panic supply where we are clearly
experiencing a first point of fear.

443
00:34:30,320 --> 00:34:33,820
This is where big institutions are
seeing value.

444
00:34:34,040 --> 00:34:38,139
We were discussing the other day Goldman
Sachs trade that Warren Buffett was

445
00:34:38,139 --> 00:34:39,400
conducting in 2008.

446
00:34:39,920 --> 00:34:46,659
He was buying on the way down because
that presented an immense liquidity and

447
00:34:46,659 --> 00:34:50,860
value opportunity for him for the stock
that he considered to be a leadership

448
00:34:50,860 --> 00:34:56,940
stock in the value at $120 and below for
that particular stock.

449
00:34:58,760 --> 00:35:02,880
Going into phase B, we're still going to
have a considerable supply.

450
00:35:05,720 --> 00:35:09,780
And again, you know, the story here is
all about the sentiment.

451
00:35:10,040 --> 00:35:14,000
I mean, think about the sentiment at
this spot right here.

452
00:35:14,480 --> 00:35:20,240
You just came down really sharply. You
stopped for a second. You had a rally.

453
00:35:20,540 --> 00:35:25,320
And then after that, all other
subsequent rallies are failing.

454
00:35:25,540 --> 00:35:27,860
There's one failed rally. There's a
second.

455
00:35:28,200 --> 00:35:32,920
failed rally relative to this high of
the automatic rally.

456
00:35:34,500 --> 00:35:38,020
So what do you think the sentiment is at
this point?

457
00:35:38,480 --> 00:35:44,340
Well, obviously, there were a lot of
sellers on the way down into the

458
00:35:44,340 --> 00:35:46,640
action, but some of them have not sold.

459
00:35:47,120 --> 00:35:51,020
And some of them still are keeping
positions.

460
00:35:51,400 --> 00:35:58,060
So as the price starts to reverse and it
starts to go down, they will be saying,

461
00:35:58,200 --> 00:36:04,000
well, I don't want really to lose this
opportunity again to sell at a slightly

462
00:36:04,000 --> 00:36:06,960
higher level, and I don't want the price
to tank.

463
00:36:07,240 --> 00:36:12,480
They're going to be feeling extremely
good at around the new lows.

464
00:36:13,320 --> 00:36:18,820
And then as the price would come back
into the trading range, then they're

465
00:36:18,820 --> 00:36:21,340
to start experiencing some emotional
pain.

466
00:36:21,560 --> 00:36:24,980
Why did I get out of this position? Look
how it came back.

467
00:36:26,540 --> 00:36:30,060
Maybe the price will go from this level
up.

468
00:36:30,260 --> 00:36:36,580
And then as the price finally goes down,
they kind of lose their whole interest

469
00:36:36,580 --> 00:36:41,520
in this stock and they go away. And
that's why, because they go away, they

470
00:36:41,520 --> 00:36:46,920
their focus to catch the reversal,
that's number one, and then to get into

471
00:36:46,920 --> 00:36:50,220
early stages of the uptrend.

472
00:36:50,560 --> 00:36:54,980
And once they miss that early stages of
the uptrend, they have to function.

473
00:36:55,840 --> 00:36:59,080
in the trend that is already in
existence.

474
00:36:59,380 --> 00:37:04,640
And this process repeats over and over
and over again, and we're just trying to

475
00:37:04,640 --> 00:37:06,160
find this on the chart.

476
00:37:06,980 --> 00:37:13,780
So still significant, quite significant
supply in phase B, suggesting that we

477
00:37:13,780 --> 00:37:20,260
have to have some kind of retest around
the area of the support, both in phases

478
00:37:20,260 --> 00:37:22,620
A and B. So we have this support
cluster.

479
00:37:24,220 --> 00:37:28,460
after the price rallies, it has to come
back and retest.

480
00:37:29,140 --> 00:37:34,340
So on the failure right here in phase B,
there are quite a few trades that you

481
00:37:34,340 --> 00:37:35,820
could have.

482
00:37:37,080 --> 00:37:43,980
And they still will be in line with the
kind of like non -spoken

483
00:37:43,980 --> 00:37:44,980
bias.

484
00:37:45,080 --> 00:37:47,500
Lower highs, lower lows.

485
00:37:47,760 --> 00:37:53,600
Still definition of a downtrend,
conventional technical analysis.

486
00:37:54,190 --> 00:37:59,330
So a lot of people are going to see this
as a downtrend and not necessarily as a

487
00:37:59,330 --> 00:38:03,650
structure. Well, we definitely would see
this as a structure. Why? Well, because

488
00:38:03,650 --> 00:38:09,510
the structure is defined by the change
of the environment that comes from a

489
00:38:09,510 --> 00:38:10,510
change of character.

490
00:38:11,210 --> 00:38:15,030
At this point, we would be expecting
more of the horizontal structure, but

491
00:38:15,030 --> 00:38:20,050
because we have lower highs and lower
lows, we will be curious to see.

492
00:38:20,810 --> 00:38:24,550
after the change of character, how to
build a down slope in trading range.

493
00:38:27,970 --> 00:38:34,070
And for that, we will take this four
points, five points,

494
00:38:34,290 --> 00:38:41,190
connect them together, and look how
nicely it projects an

495
00:38:41,190 --> 00:38:46,150
attempt to spring here, and then also
defines for us the level of the

496
00:38:46,150 --> 00:38:49,170
which has to be overcome by the sign of
strength rally.

497
00:38:53,580 --> 00:39:00,200
And because we are thinking about
downslope information, we are looking at

498
00:39:00,200 --> 00:39:04,120
volume signature and observing the
volume signature so that we would

499
00:39:04,120 --> 00:39:08,420
what's happening with the supply
signature going into potential phase C.

500
00:39:08,740 --> 00:39:14,280
As we're observing at potential phase C,
the question is here, is there

501
00:39:14,280 --> 00:39:18,860
sufficient absorption of the supply that
has happened?

502
00:39:19,420 --> 00:39:25,760
throughout all three phases, and
specifically going into phase C, that at

503
00:39:25,760 --> 00:39:31,860
point, if the price will start going up,
the new upswing and the new uptrend

504
00:39:31,860 --> 00:39:32,900
will be sustainable.

505
00:39:33,360 --> 00:39:39,560
And looking at the volume signature, we
definitely see diminishing supply

506
00:39:39,560 --> 00:39:43,720
signature, overall diminishing volume
signature.

507
00:39:45,000 --> 00:39:48,140
Diminishing supply is telling us that
there are fewer

508
00:39:51,240 --> 00:39:53,100
So that's bullish.

509
00:39:55,880 --> 00:40:02,520
Overall diminution volume signature into
phase C suggests to us

510
00:40:02,520 --> 00:40:07,860
also that not only there are fewer
sellers, but that CO is

511
00:40:07,860 --> 00:40:12,100
somewhat less active.

512
00:40:14,220 --> 00:40:16,940
Why CO is less active? Well, because

513
00:40:17,720 --> 00:40:24,280
CO is close to full position or to full

514
00:40:24,280 --> 00:40:30,920
position risk that it's

515
00:40:30,920 --> 00:40:32,820
exposed to at this point of time.

516
00:40:33,120 --> 00:40:38,540
So therefore, whatever volume signature
we're seeing here, that bind by the CO

517
00:40:38,540 --> 00:40:42,940
at this spot is less aggressive than,
let's say, in phase A.

518
00:40:43,760 --> 00:40:46,540
And by itself, it suggests.

519
00:40:47,150 --> 00:40:52,550
the bullish buyers because we're
thinking, okay, why would they be so

520
00:40:52,550 --> 00:40:57,790
phases A and B and then inactive in
phase A? Well, they've accumulated

521
00:40:58,070 --> 00:41:03,050
So if the price confirms by going up and
coming back into the trading range and

522
00:41:03,050 --> 00:41:07,750
specifically with the leaving of the
trading range, that would be a major

523
00:41:07,750 --> 00:41:10,910
confirmation for us that this is an
uptrend developing.

524
00:41:11,970 --> 00:41:14,830
But as the price goes up, it confirms.

525
00:41:15,580 --> 00:41:21,780
this theory about what CEO is doing and
what the sellers are doing. And we could

526
00:41:21,780 --> 00:41:25,560
be thinking that we should get in into
the position.

527
00:41:27,280 --> 00:41:32,520
This is the market, the spiders. This is
one of the charts that you guys should

528
00:41:32,520 --> 00:41:34,840
definitely study a lot.

529
00:41:35,320 --> 00:41:41,420
And this area right here, in different
methodologies, it's defined differently.

530
00:41:42,560 --> 00:41:47,820
For instance, in IBD, And please correct
me if I'm wrong. I don't want to be

531
00:41:47,820 --> 00:41:49,680
wrong. Follow -through day.

532
00:41:57,360 --> 00:42:03,500
And in other methodologies, or
specifically in Wyckoff, we would be

533
00:42:03,500 --> 00:42:04,640
about momentum days.

534
00:42:07,940 --> 00:42:12,580
So those momentum days define buying for
us.

535
00:42:13,160 --> 00:42:19,700
And define buying, When the result to
the

536
00:42:19,700 --> 00:42:24,900
upside is actually increasing for the
first time in such a way that

537
00:42:24,900 --> 00:42:29,320
suggests to us that supply is down.

538
00:42:30,220 --> 00:42:36,620
Please note that momentum is present
here as well and demand is increasing.

539
00:42:37,780 --> 00:42:43,800
But this is a slightly different
picture. It's almost like a smaller

540
00:42:43,800 --> 00:42:44,800
demand.

541
00:42:46,150 --> 00:42:53,070
slightly diminished in demand, produces
kind of, if not the same,

542
00:42:53,070 --> 00:42:58,550
but then close to the same type of run,
if we especially take a couple more bars

543
00:42:58,550 --> 00:43:05,070
right there. So maybe the same distance
has been covered. But it's done on

544
00:43:05,070 --> 00:43:09,290
smaller demand.

545
00:43:09,950 --> 00:43:13,670
So it tells us that supply is so
exhausted.

546
00:43:15,120 --> 00:43:21,560
at this point, that an ease of movement
is happening on diminishing demand and

547
00:43:21,560 --> 00:43:24,760
when the price travels the same way.

548
00:43:25,200 --> 00:43:31,000
And that gives us the timing for the
price

549
00:43:31,000 --> 00:43:33,660
finally leaving the trading range.

550
00:43:33,860 --> 00:43:40,440
Again, this is very quick on this
specific

551
00:43:40,440 --> 00:43:42,720
structure and how...

552
00:43:43,930 --> 00:43:48,730
supply and demand are interacting with
each other, how, you know, momentum

553
00:43:48,730 --> 00:43:51,910
confirm that supply has been exhausted.

554
00:43:52,350 --> 00:43:56,770
But this is something for practical for
us to discuss.

555
00:43:57,070 --> 00:44:01,010
Again, you know, a little bit slightly
more advanced concept when we involve

556
00:44:01,010 --> 00:44:05,550
momentum into the, let's say, demand
signature or the price signature.

557
00:44:05,990 --> 00:44:10,590
Let's go to the next example. So this is
scenario number three. So under this

558
00:44:10,590 --> 00:44:16,610
scenario here, we are observing supply
increase in phase B.

559
00:44:16,890 --> 00:44:23,430
So supply in phase B will be the highest
supply. And sometimes it will look like

560
00:44:23,430 --> 00:44:25,510
a stop in action by itself.

561
00:44:25,790 --> 00:44:30,730
And students usually would put a selling
climax into this lower low.

562
00:44:31,550 --> 00:44:38,210
And their argument is very appealing
because the volume signature is

563
00:44:38,210 --> 00:44:43,310
and the spread is also going to be
climactic. And that Is the low a low at

564
00:44:43,310 --> 00:44:44,310
point of time?

565
00:44:44,450 --> 00:44:51,090
Now, what is being overlooked a little
bit in this case is the automatic

566
00:44:51,090 --> 00:44:57,830
rally that defines a change of character
for the drop to the

567
00:44:57,830 --> 00:45:01,170
downside for the reaction that we have.

568
00:45:01,670 --> 00:45:06,830
And that reaction also has the largest
volume signature at the time.

569
00:45:07,950 --> 00:45:12,210
So with the highest volume signature and
the change of character, we're thinking

570
00:45:12,210 --> 00:45:13,430
that this is a trading range.

571
00:45:13,750 --> 00:45:18,630
In this case, again, a downsloping
trading range. How would we confirm that

572
00:45:18,630 --> 00:45:25,510
would be indeed a downsloping structure?
Well, take

573
00:45:25,510 --> 00:45:32,310
phase C and look into the major sign of
strength and see if the

574
00:45:32,310 --> 00:45:36,390
backing up action comes exactly to the
level of the support that acted before

575
00:45:36,390 --> 00:45:37,390
the resistance.

576
00:45:37,470 --> 00:45:42,310
And if it does, then that's your trading
range. And if it does, if this is your

577
00:45:42,310 --> 00:45:47,130
trading range, then this is probably a
selling climax with the change of

578
00:45:47,130 --> 00:45:48,770
character, secondary tail here.

579
00:45:49,050 --> 00:45:50,890
And then this is just phase B.

580
00:45:51,110 --> 00:45:57,990
So now that we know the structure here
in phase B, we are puzzled with the high

581
00:45:57,990 --> 00:45:58,990
supply signature.

582
00:45:59,130 --> 00:46:03,090
And then again, see how it all unfolds,
the structure.

583
00:46:03,430 --> 00:46:05,050
There is a lot of selling.

584
00:46:05,600 --> 00:46:12,540
So weak hands are capitulating here, or
ITF,

585
00:46:12,700 --> 00:46:17,040
institutional trend followers, are
capitulating here.

586
00:46:17,920 --> 00:46:23,740
And then as the price goes up, it
doesn't really show a lot of strength on

587
00:46:23,740 --> 00:46:24,740
move up.

588
00:46:25,360 --> 00:46:29,080
So we still could be thinking that
there's going to be a continuation to

589
00:46:29,080 --> 00:46:32,380
downside, so the sentiment is pretty
bearish at this point.

590
00:46:33,130 --> 00:46:35,490
And it's only here on this test.

591
00:46:36,230 --> 00:46:41,810
That's the first time when we could say
that it's stopping.

592
00:46:42,010 --> 00:46:45,010
So at least for now, we're going to be
in some kind of consolidation.

593
00:46:47,870 --> 00:46:51,330
All right, so then let's look at the
supply in phase C.

594
00:46:52,530 --> 00:46:56,670
So what are we seeing here? This is the
supply in phase C.

595
00:46:58,510 --> 00:47:01,910
And we're seeing that definitely it's...

596
00:47:02,220 --> 00:47:07,900
you know, somewhat smaller than supply
in phase A.

597
00:47:08,480 --> 00:47:14,280
And definitely, you know, it's
decreasing from phase B to phase C. So

598
00:47:14,280 --> 00:47:20,140
both of those requirements for phase C
supply after such a strong increase of

599
00:47:20,140 --> 00:47:26,800
the supply in phase B, where supply
diminishes relative to both phases A and

600
00:47:27,440 --> 00:47:29,340
And then if we miss that,

601
00:47:30,670 --> 00:47:37,510
Then we want another test, right? So
here's another test, but it comes as a

602
00:47:37,510 --> 00:47:41,050
structural high or low, but the volume
signature increases.

603
00:47:41,530 --> 00:47:48,290
And today I'm going to show you a couple
of slides from somebody in this class

604
00:47:48,290 --> 00:47:50,650
that discusses this exact concept.

605
00:47:50,910 --> 00:47:55,550
So look at the volume increase, meaning
that supply has increased, and it's a

606
00:47:55,550 --> 00:47:59,110
high or low. So usually we talk about a
testing action.

607
00:47:59,900 --> 00:48:02,400
as an element of two things.

608
00:48:02,660 --> 00:48:09,420
The price structure, which should be,

609
00:48:09,480 --> 00:48:11,340
in this case, a high or low.

610
00:48:12,340 --> 00:48:16,980
Let's just put it here as successful
test.

611
00:48:17,360 --> 00:48:23,620
And then we need to see on the volume
side, dimension supply signature.

612
00:48:23,960 --> 00:48:26,700
In this case, we see that supply is
increasing.

613
00:48:27,770 --> 00:48:33,950
and the structure is still high or low.
So we don't have both characteristics

614
00:48:33,950 --> 00:48:39,290
that we need. But then look at the next
reaction into the back -and -up action.

615
00:48:39,510 --> 00:48:45,610
This is where supply diminishes, and
maybe even the average supply is even

616
00:48:45,610 --> 00:48:46,610
somewhere here.

617
00:48:47,510 --> 00:48:49,910
And it happens on the high or low.

618
00:48:50,110 --> 00:48:54,170
So this is the first time when we have
both conditions here for the successful

619
00:48:54,170 --> 00:48:59,500
testing, and that suggests that From now
on, the price is going to move much,

620
00:48:59,560 --> 00:49:01,760
much freer to the upside.

621
00:49:03,360 --> 00:49:07,020
All right, let's see some comments here.

622
00:49:12,640 --> 00:49:18,860
Okay, yeah, this I'll have to address.
This comes from Liam, and the question

623
00:49:18,860 --> 00:49:21,480
is, notice that this is an S andP.

624
00:49:22,140 --> 00:49:26,520
500 index ETF instead of the index
itself. For analyzing the market, is it

625
00:49:26,520 --> 00:49:28,320
better to use respective ETF?

626
00:49:28,760 --> 00:49:31,620
The volume pattern might be different
between the two.

627
00:49:32,580 --> 00:49:39,380
Yes, the volume could be different
between, let's say, a cash market

628
00:49:39,380 --> 00:49:41,720
ETF and, let's say, futures.

629
00:49:42,920 --> 00:49:49,080
Yet, my argument to that always is that
the volume structure

630
00:49:49,080 --> 00:49:55,760
being in the way how we see those ups
and downs and how the

631
00:49:55,760 --> 00:50:01,080
volume is in generally behaves is going
to be the same

632
00:50:01,080 --> 00:50:07,180
and if you are going to have some big
days like you know this one right here

633
00:50:07,180 --> 00:50:13,820
most likely it's also a big day in the
futures in the cash market and so on so

634
00:50:13,820 --> 00:50:20,690
forth so i definitely get the idea that
um the volume signature could be so

635
00:50:20,690 --> 00:50:27,370
different for the same underlying but
different instrument, right? So

636
00:50:27,370 --> 00:50:32,550
different capacity, different way of
representing that underlying.

637
00:50:33,570 --> 00:50:39,350
But at the same time, the volume
signature, those patterns are going to

638
00:50:39,350 --> 00:50:43,150
somewhat the same. And that's what I
want you to concentrate on. And thank

639
00:50:43,150 --> 00:50:47,150
for asking this question because every
cycle it comes up.

640
00:50:52,320 --> 00:50:58,140
Okay, now I should say in phase C
tested, and it's kind of hard to see

641
00:50:58,180 --> 00:50:59,840
It's just like almost on the same level.

642
00:51:00,180 --> 00:51:07,000
Phase C test happened on a higher supply
but still made a higher low, which

643
00:51:07,000 --> 00:51:10,100
looks bullish. So are we talking about
this spot right here?

644
00:51:10,300 --> 00:51:17,260
Yeah, this is just an area of increased
effort, in this case

645
00:51:17,260 --> 00:51:20,760
to the downside, and then diminishing
result.

646
00:51:21,320 --> 00:51:23,220
to the downside, which looks bullish.

647
00:51:24,960 --> 00:51:31,080
In this case right here, we're seeing
diminishing effort to the downside

648
00:51:31,080 --> 00:51:33,860
and diminishing result.

649
00:51:34,480 --> 00:51:41,280
So there is a synchronicity between
effort and the result.

650
00:51:44,320 --> 00:51:46,760
And therefore, it's also bullish.

651
00:51:47,020 --> 00:51:49,220
So bullish in both cases.

652
00:51:50,280 --> 00:51:52,040
but different interpretation.

653
00:51:52,460 --> 00:51:58,800
And we're coming to the conclusion that
it's bullish bias based on different

654
00:51:58,800 --> 00:52:01,780
effort signatures.

655
00:52:03,840 --> 00:52:07,020
All right, let's go to the next one.

656
00:52:09,100 --> 00:52:15,740
This is that scenario, scenario number
four, that

657
00:52:15,740 --> 00:52:19,580
sometimes could produce difficulty for
us.

658
00:52:20,000 --> 00:52:24,480
Because when we look at something like
this, and this is the Amazon daily

659
00:52:24,660 --> 00:52:31,600
where there is a huge spread to the
downside, and we instantly, on

660
00:52:31,600 --> 00:52:36,480
increased climactic volume signature, we
instantly are thinking that this is a

661
00:52:36,480 --> 00:52:37,480
sign of weakness.

662
00:52:38,800 --> 00:52:41,620
And we're looking for the commitment to
the downside.

663
00:52:42,000 --> 00:52:45,510
And in a lot of cases, we're going to
look... at this range of the horizontal

664
00:52:45,510 --> 00:52:49,170
range and we might be saying okay well i
see that the price is below that

665
00:52:49,170 --> 00:52:55,390
support level so therefore a sign of
weakness is going to be um

666
00:52:55,390 --> 00:53:01,990
a valid concern now there is a big
difference

667
00:53:01,990 --> 00:53:08,610
between a sign of weakness and a spring
or a shakeout

668
00:53:08,610 --> 00:53:12,690
in this case

669
00:53:13,680 --> 00:53:20,060
Even if we are using horizontal range
right here, we only have two closes

670
00:53:20,060 --> 00:53:25,700
that go below support and then the price
recovers. So this looks more on the

671
00:53:25,700 --> 00:53:28,720
horizontal range even in the spring
rather than a shakeout.

672
00:53:29,740 --> 00:53:36,240
And it happens on a lot of the supply
that's coming in. That is

673
00:53:36,240 --> 00:53:37,340
capitulation supply.

674
00:53:38,180 --> 00:53:41,780
Probably just bad news or anything on
that particular day.

675
00:53:43,670 --> 00:53:50,590
And we're seeing a lot of absorption of
the supply as the price starts to show

676
00:53:50,590 --> 00:53:54,190
short -term liquidity and value for
institutions.

677
00:53:54,570 --> 00:54:00,750
Please note where they did this. Again,
in phase A, on that rotational

678
00:54:00,750 --> 00:54:03,230
leadership distribution.

679
00:54:03,970 --> 00:54:10,890
And then in phase C, where a second
point of fear just produced some kind

680
00:54:11,180 --> 00:54:15,060
quick, bearish sentiment, and weak hands
want to get out.

681
00:54:15,260 --> 00:54:19,880
And this presents an opportunity for
strong hands to get in, absorb the

682
00:54:20,240 --> 00:54:22,260
and then hold on to the supply.

683
00:54:23,180 --> 00:54:28,000
So from that perspective, it's always
going to be difficult to see this type

684
00:54:28,000 --> 00:54:33,000
volume signature, where there is an
increase from phase A to phase C, where

685
00:54:33,000 --> 00:54:37,060
there is a substantial increase from
phase B to phase C.

686
00:54:37,640 --> 00:54:43,220
Because that would be always attributed
to the increased supply and therefore

687
00:54:43,220 --> 00:54:45,740
more of the distributional
characteristics.

688
00:54:46,140 --> 00:54:48,120
And those are going to be wrong.

689
00:54:48,360 --> 00:54:49,360
Why?

690
00:54:50,980 --> 00:54:52,620
Look at the price.

691
00:54:53,000 --> 00:54:54,660
What does the price do?

692
00:54:55,420 --> 00:55:01,900
And the price is coming back really
quickly into the trading range.

693
00:55:02,360 --> 00:55:06,720
And whether you're using downsloping
trading range or just horizontal,

694
00:55:08,660 --> 00:55:13,220
Already somewhere here in phase D, you
might be thinking there is something

695
00:55:13,220 --> 00:55:14,820
wrong with this sign of weakness.

696
00:55:15,380 --> 00:55:21,300
It should have committed below, and the
rally after this should have been weak,

697
00:55:21,480 --> 00:55:26,820
and then we should have had a
continuation. Instead, the price came

698
00:55:26,820 --> 00:55:31,360
into the trading range, and then it
stays up in the reactionary mode, and it

699
00:55:31,360 --> 00:55:32,500
doesn't go down.

700
00:55:33,060 --> 00:55:35,620
So our buy should change at that point.

701
00:55:36,060 --> 00:55:37,060
if not before.

702
00:55:38,880 --> 00:55:39,900
All right.

703
00:55:42,520 --> 00:55:48,240
Okay, let's talk about the supply
signatures now in WICO phases of the

704
00:55:48,240 --> 00:55:49,240
distribution.

705
00:55:49,740 --> 00:55:55,640
And again, you know, there was no really
a

706
00:55:55,640 --> 00:55:58,220
lot of thinking about

707
00:55:59,340 --> 00:56:02,580
the trading ranges that I wanted to
identify here.

708
00:56:02,860 --> 00:56:07,320
But then after actually drawing for the
distribution, it does make sense. It

709
00:56:07,320 --> 00:56:09,440
does make sense to discuss specific
scenarios.

710
00:56:10,160 --> 00:56:14,520
So it's not like we're discussing a
specific scenario of the upsloping

711
00:56:14,520 --> 00:56:21,380
distribution. It could have been a
horizontal distribution as well. But in

712
00:56:21,380 --> 00:56:26,140
the second case, you know, the
interpretation of the structure with the

713
00:56:26,140 --> 00:56:27,300
signature is going to be crucial.

714
00:56:29,450 --> 00:56:36,170
So let's think about just very common
beliefs from

715
00:56:36,170 --> 00:56:42,470
our methodology as to how the supply
should be behaving in the distribution

716
00:56:42,470 --> 00:56:43,490
redistribution structure.

717
00:56:43,830 --> 00:56:50,610
So in general, the two most common
volume signatures that we should see is

718
00:56:50,610 --> 00:56:57,410
increase of the supply throughout the
whole structure, and not

719
00:56:57,410 --> 00:57:00,220
just into phase C, into phase D.

720
00:57:00,440 --> 00:57:05,620
Because phase D is going to be the first
phase where we're going to see that

721
00:57:05,620 --> 00:57:10,460
increase of the pressure to the downside
as effort increases.

722
00:57:10,940 --> 00:57:16,580
And at the same time, result will follow
that pressure and it will produce a

723
00:57:16,580 --> 00:57:18,500
much better result than anything else.

724
00:57:18,880 --> 00:57:21,440
Those are the characteristics of the
change of character.

725
00:57:21,700 --> 00:57:26,840
And that change of character suggests
that we were in the distribution

726
00:57:26,840 --> 00:57:28,500
and now is the time.

727
00:57:29,120 --> 00:57:31,680
for the downtrend to unfold.

728
00:57:32,420 --> 00:57:36,780
And that increase of the supply is going
to be throughout the whole structure.

729
00:57:36,980 --> 00:57:42,480
So in general, for accumulation, we
would be talking about absorption of the

730
00:57:42,480 --> 00:57:45,380
supply, so therefore diminishing supply
signature.

731
00:57:45,860 --> 00:57:50,200
And then for the distribution, we will
be talking about the increase of

732
00:57:50,200 --> 00:57:54,440
volatility, increase of the volume
signature, increase of the supply

733
00:57:58,490 --> 00:58:05,230
that should produce some kind of result
to the downside with the emergence of

734
00:58:05,230 --> 00:58:09,610
the downtrend on the lower highs and
lower lows.

735
00:58:09,850 --> 00:58:12,810
So that's the most common signature.

736
00:58:14,130 --> 00:58:19,650
Signature number two is just going to
have a variation on phase B supply.

737
00:58:20,390 --> 00:58:25,790
And, you know, we might go into more
detailed nuances.

738
00:58:26,750 --> 00:58:33,250
In the practicum course where we'll be
talking about that phase B volume

739
00:58:33,250 --> 00:58:40,030
signature in the distribution, sometimes
signature with lesser supply

740
00:58:40,030 --> 00:58:46,450
would suggest that we are going to have
some kind of more of the upthrust action

741
00:58:46,450 --> 00:58:48,710
into phase C.

742
00:58:50,350 --> 00:58:55,150
And then a higher supply signature might
actually suggest that we are going to

743
00:58:55,150 --> 00:58:58,930
have more of the LPSY in phase C.

744
00:59:01,450 --> 00:59:08,190
And it all relates to the levels of the
supply that we should be observing in

745
00:59:08,190 --> 00:59:11,410
phase B and how, you know, phase C and
phase D could unfold.

746
00:59:13,170 --> 00:59:19,510
Then let's go to a more specific
distributional information, which we...

747
00:59:19,960 --> 00:59:21,500
we'll call a TP formation.

748
00:59:21,900 --> 00:59:25,300
Please don't forget that TP family would
also have

749
00:59:25,300 --> 00:59:31,220
a hypodermic

750
00:59:31,220 --> 00:59:36,600
structure, could have hypodermic.

751
00:59:39,020 --> 00:59:44,560
And basically the volume signature here
in hypodermic is gonna be the same with

752
00:59:44,560 --> 00:59:50,460
the exception that there's going to be a
collapse between phases A and D, and

753
00:59:50,460 --> 00:59:52,080
everything is going to happen so fast.

754
00:59:52,340 --> 00:59:58,620
So you could see a lot of volume
signature increase even throughout all

755
00:59:58,620 --> 01:00:02,560
of the phases rather than just in A or
D.

756
01:00:03,080 --> 01:00:07,560
But for the TP formation, one of the
things that we need to remember is that

757
01:00:07,560 --> 01:00:13,520
there is an excitement on the way up in
the upswing, so weak hands are buying.

758
01:00:16,840 --> 01:00:22,140
And then strong hands, the CEO is
selling into strength.

759
01:00:24,940 --> 01:00:30,020
And then there is something on the
horizon for this company or maybe for

760
01:00:30,020 --> 01:00:34,460
market in general or maybe for the group
that CEO does not like.

761
01:00:35,560 --> 01:00:39,500
And the CEO wants to get rid of this
position as soon as possible.

762
01:00:39,860 --> 01:00:42,140
The CEO does not want to wait.

763
01:00:42,500 --> 01:00:47,670
It's going to sell on the way up and
it's also going to sell on the way down.

764
01:00:47,870 --> 01:00:52,670
And this distribution on the way down

765
01:00:52,670 --> 01:00:59,510
is going to happen really fast, so
therefore we're

766
01:00:59,510 --> 01:01:03,590
given a definition of urgency to this
action.

767
01:01:04,390 --> 01:01:09,950
There is an urgent distribution by the
CEO. There is an urgent distribution by

768
01:01:09,950 --> 01:01:12,770
institutions at this point.

769
01:01:13,340 --> 01:01:20,200
Now, this urgency to distribute lowers
the supply of their

770
01:01:20,200 --> 01:01:21,680
stock significantly.

771
01:01:22,260 --> 01:01:27,860
So, CO is

772
01:01:27,860 --> 01:01:33,480
either out completely or

773
01:01:33,480 --> 01:01:39,760
it has a very low level

774
01:01:39,760 --> 01:01:40,840
of...

775
01:01:41,760 --> 01:01:44,140
supply of shares that is left.

776
01:01:48,960 --> 01:01:55,900
So what does it mean? It means that
going into phase B and C and

777
01:01:55,900 --> 01:02:01,560
even potential D, but let's just keep it
at B and C, the CO is going to be

778
01:02:01,560 --> 01:02:02,560
inactive.

779
01:02:05,480 --> 01:02:10,200
And if CO is inactive, then overall
volume signature should go down.

780
01:02:11,360 --> 01:02:13,720
Supply should go down, demand should go
down.

781
01:02:14,660 --> 01:02:20,880
And usually this type of situations
where volume goes down and both supply

782
01:02:20,880 --> 01:02:25,460
demand goes down are going to produce
some kind of apex formations, triangles.

783
01:02:27,540 --> 01:02:32,160
And usually apex and triangles are going
to be always associated with

784
01:02:32,160 --> 01:02:33,160
indecision.

785
01:02:34,200 --> 01:02:39,000
If you think about this, guys, why
indecision at this spot?

786
01:02:40,000 --> 01:02:41,040
Who's in decision?

787
01:02:42,040 --> 01:02:43,980
Who doesn't know what to do?

788
01:02:46,080 --> 01:02:50,500
Well, the CO is out, so there is no
decision there. So in a way, that's kind

789
01:02:50,500 --> 01:02:57,020
cool that there is no decision by the
CO. The CO has made the decision, and

790
01:02:57,020 --> 01:02:58,020
it's inactive.

791
01:02:58,200 --> 01:03:01,800
So in decision, more by who?

792
01:03:02,580 --> 01:03:06,060
Well, I would say more by ITFs.

793
01:03:09,000 --> 01:03:15,640
institutional trend followers why
indecision here

794
01:03:15,640 --> 01:03:21,840
well because there is they are still in
technically in

795
01:03:21,840 --> 01:03:24,340
an uptrend definition

796
01:03:24,340 --> 01:03:31,660
because

797
01:03:31,660 --> 01:03:38,450
this trend for them is going to have a
higher low a higher high,

798
01:03:38,670 --> 01:03:43,650
and then it's going to have a
consolidation, a trading range.

799
01:03:43,990 --> 01:03:46,610
So the trend is not broken yet.

800
01:03:47,270 --> 01:03:53,450
But then once they go through more than,
let's say, two quarters

801
01:03:53,450 --> 01:03:58,990
of, let's say, absolute

802
01:03:58,990 --> 01:04:05,890
and relative underperformance,

803
01:04:08,140 --> 01:04:13,160
So think about the market in this period
of time might be going up. So absolute

804
01:04:13,160 --> 01:04:15,020
return on the stock is not going to be
there.

805
01:04:16,080 --> 01:04:21,240
And the relative performance also could
be in jeopardy.

806
01:04:21,660 --> 01:04:28,300
So therefore, what would institutional
trend followers do? They're going to

807
01:04:28,300 --> 01:04:32,440
start scaling out of this position. And
that's what's going to finally increase

808
01:04:32,440 --> 01:04:36,160
this size. So ITFs are selling.

809
01:04:38,060 --> 01:04:43,580
And ironically, this selling, that's
what's going to produce after the low or

810
01:04:43,580 --> 01:04:46,100
high, the next low or low.

811
01:04:47,040 --> 01:04:53,580
So and then the structure becomes more
with the more visually

812
01:04:53,580 --> 01:04:57,320
detectable bias to the downside.

813
01:04:59,640 --> 01:05:01,180
Everything is so connected.

814
01:05:01,480 --> 01:05:03,460
It's like a living organism.

815
01:05:03,780 --> 01:05:07,400
You know, there is a selling, there is
still some hope.

816
01:05:08,520 --> 01:05:12,100
failure of that hope, and then there is
a final capitulation.

817
01:05:13,200 --> 01:05:15,740
That's how the sentiment unfolds through
the structure.

818
01:05:17,880 --> 01:05:18,880
Okay.

819
01:05:21,160 --> 01:05:26,360
Let's look at scenario number four.

820
01:05:27,520 --> 01:05:32,100
And it's just basically the same, we
could apply the same structure, right?

821
01:05:32,140 --> 01:05:34,280
We're still gonna have some urgency to
sell.

822
01:05:35,120 --> 01:05:39,860
And relative to phase B and phase C, the
supply is going to be quite significant

823
01:05:39,860 --> 01:05:40,860
in phase A.

824
01:05:41,000 --> 01:05:46,880
But then more supply in phase E. So what
it would tell us is that the sell -in

825
01:05:46,880 --> 01:05:52,440
here on the way down out of the APACs,
sell -in is much more

826
01:05:52,440 --> 01:05:56,660
than in phase A.

827
01:05:58,480 --> 01:06:02,600
And therefore, we know that some of the
institutions sold in phase A.

828
01:06:04,480 --> 01:06:07,480
it doesn't mean that all of the
institutions sold in phase A.

829
01:06:07,720 --> 01:06:13,560
So they're going to start selling again
in phase D, and that's what's going to

830
01:06:13,560 --> 01:06:16,140
produce a more meaningful volume
signature.

831
01:06:16,340 --> 01:06:20,840
And usually with this type of volume
signature, that movement is going to be

832
01:06:20,840 --> 01:06:25,840
much faster. Because think about, you
know, increase of the supply as kind of

833
01:06:25,840 --> 01:06:29,200
like an urgent supply coming in.

834
01:06:29,690 --> 01:06:34,230
on the capitulation after the apex
rather than off the top.

835
01:06:34,710 --> 01:06:38,810
So in this type of environment, you're
going to have a lot of gaps down.

836
01:06:40,850 --> 01:06:45,550
And that's going to happen on kind of
like this extremely climactic volume

837
01:06:45,550 --> 01:06:46,550
signature.

838
01:06:49,430 --> 01:06:50,430
Okay.

839
01:06:52,250 --> 01:06:53,330
All right, great.

840
01:06:58,280 --> 01:07:04,440
Question from Philip. Why are we using
phases D and E instead of C

841
01:07:04,440 --> 01:07:05,960
as an accumulation?

842
01:07:06,600 --> 01:07:08,680
Okay, so this is a good question.

843
01:07:09,200 --> 01:07:14,220
So we think about phase C here, right?
So usually in the accumulation, we would

844
01:07:14,220 --> 01:07:18,920
be thinking about phase C as an element
of

845
01:07:18,920 --> 01:07:25,600
supply increase because the weak
hands...

846
01:07:25,880 --> 01:07:32,200
are selling here at this point they're
capitulating now in distribution is

847
01:07:32,200 --> 01:07:37,820
to be the opposite right so we we're not
talking about the demand we would be uh

848
01:07:37,820 --> 01:07:44,720
demand and rally um demand trial is
going to be equivalent of this and this

849
01:07:44,720 --> 01:07:51,400
in accumulation and the distribution but
we have we are talking about supply

850
01:07:51,400 --> 01:07:56,640
signature not demand signature So
therefore, we want to look at the

851
01:07:56,640 --> 01:07:57,638
the distribution.

852
01:07:57,640 --> 01:08:02,800
And this is where phase D is going to
have that major sign of weakness as a

853
01:08:02,800 --> 01:08:05,080
reaction. So we're discussing that.

854
01:08:07,440 --> 01:08:08,440
Okay.

855
01:08:09,500 --> 01:08:11,100
Let's look at some examples.

856
01:08:15,100 --> 01:08:18,560
So this is a redistributional trading
range.

857
01:08:19,840 --> 01:08:21,380
JCPenney monthly chart.

858
01:08:21,840 --> 01:08:26,740
after a big downtrend that had already
seen a lot of selling.

859
01:08:27,340 --> 01:08:32,439
We have a move out of the deeply
oversold condition.

860
01:08:32,779 --> 01:08:38,020
And actually, I remember I was, you
know, trading consulting some of the

861
01:08:38,020 --> 01:08:42,620
institutional clients on this stock.
They were extremely excited at this

862
01:08:42,620 --> 01:08:48,240
because the big news at the time in
2011, I believe, was that

863
01:08:49,240 --> 01:08:55,460
one of the Apple designers is coming to
JCPenney and he's going to produce

864
01:08:55,460 --> 01:09:02,380
the same type of following with the
stores that Apple

865
01:09:02,380 --> 01:09:04,660
has created by that time.

866
01:09:04,920 --> 01:09:10,720
And nothing from that materialized and
then we kind of went back into...

867
01:09:11,100 --> 01:09:16,939
a downtrend again but look at how
technically we would define that this is

868
01:09:16,939 --> 01:09:23,740
distribution based on the supply
signature in this trading range as

869
01:09:23,740 --> 01:09:30,660
we go through different phases look how
gradually supply is increasing

870
01:09:30,660 --> 01:09:36,800
throughout the whole structure and again
we're not using phase c rally for

871
01:09:36,800 --> 01:09:38,300
identification of the supply

872
01:09:39,689 --> 01:09:45,850
we are only talking about reactions in
the trading range so on these reactions

873
01:09:45,850 --> 01:09:52,410
we see how supply is gradually
increasing increasing increasing

874
01:09:52,410 --> 01:09:57,670
and then what happens with the result
look at this reaction look at this

875
01:09:57,670 --> 01:10:02,910
reaction and then look at this reaction
so this is where result to the downside

876
01:10:02,910 --> 01:10:03,910
is increasing

877
01:10:04,640 --> 01:10:09,600
on the increased volume signature or on
the increased effort to the downside.

878
01:10:10,460 --> 01:10:11,700
Bullish or bearish?

879
01:10:12,140 --> 01:10:17,820
Definitely bearish. And this defines the
timing for us. There is a synchronicity

880
01:10:17,820 --> 01:10:22,620
between the increase in effort and the
increase in the result.

881
01:10:23,180 --> 01:10:30,120
And that's exactly what we look for for
the change of character and so on

882
01:10:30,120 --> 01:10:31,120
and so forth.

883
01:10:31,540 --> 01:10:33,600
So this is the most common.

884
01:10:34,600 --> 01:10:35,600
supply signature.

885
01:10:35,800 --> 01:10:37,160
Here is a TP formation.

886
01:10:37,640 --> 01:10:42,580
So we've talked about this, but I'm
using a slightly different schematic

887
01:10:45,200 --> 01:10:51,560
And I'm doing this just because it looks
that maybe, well, actually supply

888
01:10:51,560 --> 01:10:56,320
slightly increased here, definitely
increased here, definitely increased

889
01:10:56,380 --> 01:11:01,940
So probably it should be scenario number
three instead of scenario number two

890
01:11:01,940 --> 01:11:04,600
here. But the principle is going to be
the same.

891
01:11:05,500 --> 01:11:10,180
In a tippy formation, as we went through
the schematic, a big climactic run,

892
01:11:10,340 --> 01:11:16,420
speculation on the way up, then our CEO
is going to say, I need to distribute

893
01:11:16,420 --> 01:11:17,420
really fast.

894
01:11:18,200 --> 01:11:20,420
Something is coming up for this stock.

895
01:11:20,680 --> 01:11:27,240
And we are at such high prices here,
speculative prices, where it's

896
01:11:31,920 --> 01:11:36,680
quickly trying to close out this
position, and they're just basically

897
01:11:36,680 --> 01:11:37,680
the way down.

898
01:11:44,420 --> 01:11:51,400
And that produces those gaps, those
quick moves, that sign of weakness in

899
01:11:51,400 --> 01:11:56,540
phase B, just because they still keep
selling and selling until they are done

900
01:11:56,540 --> 01:11:57,398
with selling.

901
01:11:57,400 --> 01:12:01,510
And once they are done, the CEO is done,
Look what happens.

902
01:12:02,070 --> 01:12:08,990
There is some value here at this spot,
at this low, for some

903
01:12:08,990 --> 01:12:11,010
people, for some institutions.

904
01:12:11,530 --> 01:12:16,430
And that's what produces this biggest
rally in Apex.

905
01:12:17,290 --> 01:12:23,110
It's kind of like the foundation of the
Apex. It's going to be the widest rally

906
01:12:23,110 --> 01:12:28,290
just because of value proposition in the
leadership stock.

907
01:12:29,080 --> 01:12:33,700
after a significant move to the downside
that was produced by the urgent

908
01:12:33,700 --> 01:12:35,380
distribution by the CEO.

909
01:12:35,640 --> 01:12:42,140
Please note how if CEO is smart money,
strong hands, and it's out,

910
01:12:42,420 --> 01:12:47,460
still some other institutions, and this
is an institutional signature right here

911
01:12:47,460 --> 01:12:52,960
on this rally in phase B, some other
institutions, specifically

912
01:12:52,960 --> 01:12:56,120
trend followers.

913
01:12:56,890 --> 01:13:01,330
are going to get in into this position
because they're thinking this is a high,

914
01:13:01,450 --> 01:13:03,850
low. The uptrend is still in place.

915
01:13:04,310 --> 01:13:09,810
So we are in the oversold condition,
which is true, short -term oversold.

916
01:13:10,070 --> 01:13:11,930
And there is some value here.

917
01:13:12,890 --> 01:13:17,630
What they are not recognizing is this is
all short -term. Short -term oversold,

918
01:13:17,690 --> 01:13:19,950
short -term value, short -term
liquidity.

919
01:13:22,650 --> 01:13:24,110
And they are getting trapped.

920
01:13:24,700 --> 01:13:29,960
And once they are in this position, they
bought in into this position, look what

921
01:13:29,960 --> 01:13:30,960
happens.

922
01:13:31,140 --> 01:13:32,660
CO is inactive.

923
01:13:36,460 --> 01:13:40,400
And I'm repeating all these concepts
just because we do need to repeat all

924
01:13:40,400 --> 01:13:41,400
concepts.

925
01:13:41,960 --> 01:13:43,680
ITF are in.

926
01:13:45,340 --> 01:13:47,040
So they are not biased.

927
01:13:47,400 --> 01:13:49,280
So they're in a position.

928
01:13:53,450 --> 01:13:59,030
Therefore, they just hold in to the
position and doing nothing, so also

929
01:13:59,030 --> 01:14:03,470
inactive. And then public weak hands

930
01:14:03,470 --> 01:14:08,590
is in the position as well

931
01:14:08,590 --> 01:14:12,290
on this low right here.

932
01:14:12,650 --> 01:14:19,610
So I have quite a few friends that
definitely know what I do for a living.

933
01:14:19,610 --> 01:14:22,330
know that I trade. They know that I
teach trading.

934
01:14:23,450 --> 01:14:30,050
And in a lot of cases, especially in the
very good market, like 2017 was the

935
01:14:30,050 --> 01:14:34,650
market like that, where everybody would
come to me and they would ask me

936
01:14:34,650 --> 01:14:38,030
questions as to what do you think about
this stock and so on and so forth.

937
01:14:39,110 --> 01:14:44,850
So a lot of them in 2018, at the
beginning of 2018, were coming in to me

938
01:14:44,850 --> 01:14:45,850
rally.

939
01:14:46,410 --> 01:14:52,270
And they were basically saying, we're
still in the uptrend.

940
01:14:53,240 --> 01:14:58,140
This is a substantial reaction, so that
suggests some value. So I bought this

941
01:14:58,140 --> 01:15:05,060
stock, and I want to see what you're
going to say. So my answer always

942
01:15:05,060 --> 01:15:10,720
was more of let's just wait and see
because we need to go through the period

943
01:15:10,720 --> 01:15:14,820
testing. And in a lot of cases, they
would buy stocks like this that would

944
01:15:14,820 --> 01:15:18,900
short -term bullish, but long -term,
they would fail.

945
01:15:19,850 --> 01:15:26,490
And that failure is going to come
through all of these people being where

946
01:15:26,490 --> 01:15:29,770
they are without a lot of activity.

947
01:15:30,210 --> 01:15:34,570
And this inactivity, that's what's going
to produce the apex formation.

948
01:15:35,610 --> 01:15:41,350
And then only after the period of
underperformance, and in this case, this

949
01:15:41,350 --> 01:15:46,370
quite considerable period. I mean, look
at this, one year of underperformance.

950
01:15:47,080 --> 01:15:53,720
And this is 2005, so we could assume
that this could be both absolute and

951
01:15:53,720 --> 01:15:59,060
relative underperformance, if you
remember how the market is unfolding.

952
01:15:59,580 --> 01:16:06,380
And then after this period of
underperformance, the ITFs that were in

953
01:16:06,380 --> 01:16:11,300
position, they're going to give up. So
this is them right here giving up on

954
01:16:11,300 --> 01:16:12,300
their positions.

955
01:16:12,460 --> 01:16:15,020
So ITFs fell in.

956
01:16:16,750 --> 01:16:22,790
And then they're going to start selling
again. And then with that selling, it's

957
01:16:22,790 --> 01:16:27,070
not only going to become institutional,
but also going to become more of a

958
01:16:27,070 --> 01:16:32,550
general selling, where both weak hands
and institutions are selling, leading us

959
01:16:32,550 --> 01:16:37,850
to the conclusion like this, where we
are thinking about maybe a climactic

960
01:16:37,850 --> 01:16:38,850
action.

961
01:16:40,350 --> 01:16:41,350
All right.

962
01:16:41,850 --> 01:16:43,490
Go to the next one.

963
01:16:44,349 --> 01:16:46,970
Oh, this is a group exercise, so this is
great.

964
01:16:48,290 --> 01:16:50,630
So look at this supply signature.

965
01:16:51,990 --> 01:16:55,210
And by the way, I need one volunteer, so
say yes.

966
01:16:56,190 --> 01:17:00,530
Look at the two supply signatures for
accumulation and the distribution.

967
01:17:01,430 --> 01:17:07,810
And I want you to think about when we're
going to look at the next chart

968
01:17:07,810 --> 01:17:11,810
about the commonalities.

969
01:17:12,440 --> 01:17:16,320
that we might have in the accumulation
and distribution.

970
01:17:18,480 --> 01:17:24,200
And the biggest question that we'll have
to address with the next exercise is

971
01:17:24,200 --> 01:17:30,700
going to be, how do we look at the same
supply signature and yet

972
01:17:30,700 --> 01:17:34,000
define the bias in a different way?

973
01:17:34,340 --> 01:17:41,320
So let's look at these two charts. And I
need a volunteer, so...

974
01:17:42,270 --> 01:17:44,250
For a volunteer, please say yes.

975
01:17:44,830 --> 01:17:46,310
So it's the same stock.

976
01:17:48,110 --> 01:17:49,930
Apollo, it's an educational stock.

977
01:17:50,190 --> 01:17:54,770
Weekly timeframe, but the period is a
little bit different, right? So we are

978
01:17:54,770 --> 01:17:56,450
here in 98, 2000.

979
01:17:57,550 --> 01:18:00,450
Here we are in 2004, 2006.

980
01:18:01,070 --> 01:18:05,650
So definitely different market
conditions.

981
01:18:06,030 --> 01:18:10,770
But still, we're looking at somewhat of
the same structure.

982
01:18:11,560 --> 01:18:15,440
what are we looking at? We're looking at
the previous uptrend.

983
01:18:16,040 --> 01:18:18,940
We're looking at the first leg to the
downside.

984
01:18:19,720 --> 01:18:26,500
Then we're looking at the series of
lower highs and in phase B, not

985
01:18:26,500 --> 01:18:32,800
necessarily lower lows, but kind of like
this apex formation going

986
01:18:32,800 --> 01:18:39,340
into the next move to the downside right

987
01:18:39,340 --> 01:18:40,340
here.

988
01:18:42,960 --> 01:18:46,120
So it looks kind of the same. And look
at the supply signature.

989
01:18:46,340 --> 01:18:53,160
From phase A volume, where it's really
high, we

990
01:18:53,160 --> 01:18:58,440
are going into the diminution supply
signature into phase B.

991
01:19:01,740 --> 01:19:07,900
Diminution supply signature into phase
B. And then we have somewhat of the

992
01:19:07,900 --> 01:19:11,040
increase, flight local increase.

993
01:19:11,690 --> 01:19:18,470
of the supply in the case of the
accumulation into phase c and then the

994
01:19:18,470 --> 01:19:25,470
the distribution into phase d so um
everything looks very similar

995
01:19:25,470 --> 01:19:32,190
so my question to you here is if
everything looks

996
01:19:32,190 --> 01:19:33,290
so similar

997
01:19:34,470 --> 01:19:38,770
with the supply and the volume
signature, and the structure looks

998
01:19:38,770 --> 01:19:42,210
same, and I'm like, look at the
structure. It's just uncanny how it

999
01:19:42,810 --> 01:19:49,510
Then how do we in this world going to
define accumulation and differentiate

1000
01:19:49,510 --> 01:19:51,690
accumulation to the distribution?

1001
01:19:52,170 --> 01:19:59,130
So let's go to Philip, and let's kind of
have this discussion here.

1002
01:19:59,350 --> 01:20:00,590
Hi, Philip. How are you doing?

1003
01:20:01,930 --> 01:20:02,930
Hello. Great.

1004
01:20:03,150 --> 01:20:04,079
How are you?

1005
01:20:04,080 --> 01:20:08,880
Good. So what do you think would be the
difference for us here? How would we be

1006
01:20:08,880 --> 01:20:15,580
differentiating between those two biases
with the same structure and with the

1007
01:20:15,580 --> 01:20:16,580
same volume signature?

1008
01:20:19,220 --> 01:20:23,240
Well, I don't really know.

1009
01:20:24,760 --> 01:20:25,980
I have no idea.

1010
01:20:27,440 --> 01:20:28,440
Okay.

1011
01:20:28,980 --> 01:20:32,860
Okay, well, that's great. Okay, so...

1012
01:20:33,420 --> 01:20:39,980
Let's think about it together, right? So
what is

1013
01:20:39,980 --> 01:20:42,560
different here on these two charts?

1014
01:20:42,820 --> 01:20:46,620
What is the main major difference that
you see?

1015
01:20:48,720 --> 01:20:52,040
Maybe the slope of the uptrend
beforehand?

1016
01:20:55,100 --> 01:20:56,500
Okay, how about now?

1017
01:20:58,600 --> 01:20:59,600
Okay.

1018
01:21:05,260 --> 01:21:12,040
Okay, so for everyone, what is the major
difference between these two

1019
01:21:12,040 --> 01:21:13,980
charts? Guys, don't overthink this.

1020
01:21:14,360 --> 01:21:16,720
There's nothing really to think about
this.

1021
01:21:16,980 --> 01:21:23,680
Look at how the chart unfolds up to this
point, and then give me

1022
01:21:23,680 --> 01:21:28,480
what you see in a different way of what
happens afterwards.

1023
01:21:34,199 --> 01:21:36,980
direction of the continuation of the
trend.

1024
01:21:37,260 --> 01:21:41,940
Yeah. Maybe I should just do this
exercise in a slightly different way.

1025
01:21:41,940 --> 01:21:46,460
should just show the chart up to this
point right here and then for us to

1026
01:21:46,460 --> 01:21:48,580
discuss that sprint situation.

1027
01:21:49,370 --> 01:21:54,630
And then to see different results to the
upside and to the downside here. So

1028
01:21:54,630 --> 01:21:58,870
let's come to this point right here and
let's just think what is happening in

1029
01:21:58,870 --> 01:22:05,270
the potential phase C. Because when we
look at the accumulation, we could

1030
01:22:05,270 --> 01:22:09,030
definitely see that phase C, but it
looks the same to me,

1031
01:22:10,170 --> 01:22:14,990
Philip, on this example as well.

1032
01:22:17,210 --> 01:22:23,850
Where is the point of decision for us to
decide that one is an

1033
01:22:23,850 --> 01:22:26,950
accumulation and then another is a
distribution?

1034
01:22:31,450 --> 01:22:37,070
Yeah, the direction of the trend after
the... Which particular bar?

1035
01:22:38,990 --> 01:22:39,990
Okay.

1036
01:22:41,930 --> 01:22:44,690
The bar...

1037
01:22:45,600 --> 01:22:51,020
So in the graph on top, the bar

1038
01:22:51,020 --> 01:22:57,980
right after the 2 ,000, the second bar
after the

1039
01:22:57,980 --> 01:22:59,100
2 ,000.

1040
01:22:59,340 --> 01:23:00,940
Okay. This one, why?

1041
01:23:01,240 --> 01:23:02,240
Yeah.

1042
01:23:04,140 --> 01:23:06,600
Why not another bar?

1043
01:23:08,880 --> 01:23:15,000
Because of the gap up and the size of
the bar, and when I compare it to the...

1044
01:23:15,470 --> 01:23:21,350
bar at the same position in the graph
down, there is a clear difference in

1045
01:23:21,490 --> 01:23:22,570
So maybe that.

1046
01:23:23,230 --> 01:23:25,030
Okay, but what's that different?

1047
01:23:26,690 --> 01:23:28,390
The direction of the candle.

1048
01:23:28,990 --> 01:23:29,990
Okay.

1049
01:23:30,590 --> 01:23:31,590
Okay,

1050
01:23:32,190 --> 01:23:36,770
so direction of the candle. Well, we
have a directional candle up right here

1051
01:23:36,770 --> 01:23:37,770
well.

1052
01:23:39,190 --> 01:23:40,190
Okay.

1053
01:23:43,560 --> 01:23:46,760
Something very fundamental that is being
missed right here.

1054
01:23:47,800 --> 01:23:52,720
Okay, so Philip, thank you. Let me just
go through this myself.

1055
01:23:53,700 --> 01:23:58,380
I want to make sure that we will see
this right away.

1056
01:23:58,620 --> 01:24:02,060
So think about phase C here, right?

1057
01:24:02,980 --> 01:24:08,740
If we're thinking about accumulation and
we're kind of confirming that this is

1058
01:24:08,740 --> 01:24:11,220
the pattern that we want to see from the
supply signature.

1059
01:24:11,920 --> 01:24:15,900
This is the structure that we want to
see. We want to see going into the

1060
01:24:15,900 --> 01:24:22,520
a low, a low, and then a test of this
low

1061
01:24:22,520 --> 01:24:27,140
as a higher low, right?

1062
01:24:27,400 --> 01:24:34,340
And then after that, we want to see a
resumption of the

1063
01:24:34,340 --> 01:24:37,540
uptrend. How would we see this? And I
think that's what Philip was trying to

1064
01:24:37,540 --> 01:24:38,540
communicate.

1065
01:24:38,800 --> 01:24:40,920
This was a reversal bar.

1066
01:24:43,050 --> 01:24:44,790
out of the test.

1067
01:24:45,810 --> 01:24:51,570
Now, what happens here? The same
potential phase C.

1068
01:24:52,870 --> 01:24:54,810
And after this screen,

1069
01:24:55,030 --> 01:25:01,910
we are waiting for the test.

1070
01:25:02,170 --> 01:25:08,450
Now, the test, again, should be a high
or low and should be on diminished

1071
01:25:08,450 --> 01:25:09,450
signature.

1072
01:25:09,870 --> 01:25:11,470
Instead, what do we have?

1073
01:25:12,720 --> 01:25:16,360
We have a commitment below the sprint.

1074
01:25:16,620 --> 01:25:22,740
So this commitment right here is where
sprint definition fails.

1075
01:25:24,920 --> 01:25:26,780
And it becomes a sign of weakness.

1076
01:25:28,480 --> 01:25:32,620
It's that sprint number one that I don't
like that much. You know, that

1077
01:25:32,620 --> 01:25:36,960
definition. Why I don't like this much?
Well, because I think it's better to

1078
01:25:36,960 --> 01:25:38,120
define the bias here.

1079
01:25:38,480 --> 01:25:43,100
I mean, this is the absolute... lost
place where we're going to be thinking

1080
01:25:43,100 --> 01:25:44,400
about the change of bias.

1081
01:25:44,940 --> 01:25:46,420
And it's still okay.

1082
01:25:47,200 --> 01:25:50,480
You know, it's better than let's say
something below that.

1083
01:25:51,420 --> 01:25:57,040
So if that's the case where we just have
to come to this place, you know, and

1084
01:25:57,040 --> 01:26:00,880
decide that the bias has changed, then,
you know, so be it. You know, this is

1085
01:26:00,880 --> 01:26:02,980
where we are with our bias definition.

1086
01:26:03,260 --> 01:26:08,760
But obviously we want to identify some
of the better characteristics that would

1087
01:26:09,640 --> 01:26:12,540
suggest a distribution to us and we
would get out earlier.

1088
01:26:12,980 --> 01:26:14,600
But that's the main thing.

1089
01:26:19,000 --> 01:26:25,960
One of the main points that I'm making
throughout the last two, three sessions

1090
01:26:25,960 --> 01:26:32,900
about volume is that when you look at
the volume

1091
01:26:32,900 --> 01:26:38,220
signature, sometimes you are distracted
by the volume itself.

1092
01:26:39,210 --> 01:26:42,810
and you forget to look at what the price
is doing.

1093
01:26:45,710 --> 01:26:50,530
And volume does not necessarily a good
representation

1094
01:26:50,530 --> 01:26:57,290
of what the price could be

1095
01:26:57,290 --> 01:27:00,810
doing, right? We could have an increase
in the volume signature and it could

1096
01:27:00,810 --> 01:27:02,870
suggest different things. It could
suggest

1097
01:27:03,930 --> 01:27:08,430
an increase in the supply, or it could
suggest both increase of the supply and

1098
01:27:08,430 --> 01:27:11,910
demand at the same time. And those are
two different things.

1099
01:27:13,450 --> 01:27:16,650
That's why volumes could be so
confusing.

1100
01:27:18,930 --> 01:27:25,330
As a tool, I think visualization of
volume is really bad.

1101
01:27:25,630 --> 01:27:32,490
It confuses people just because there
are two different forces in a

1102
01:27:32,490 --> 01:27:33,490
single bar.

1103
01:27:33,790 --> 01:27:40,390
And the volume bar is usually given some
kind of biased definition just by the

1104
01:27:40,390 --> 01:27:46,190
default. If the price goes down and
closes below the previous day's close,

1105
01:27:46,190 --> 01:27:47,450
volume bar is going to be red.

1106
01:27:48,790 --> 01:27:53,530
But this volume bar could contain a lot
of demand, and this is where confusion

1107
01:27:53,530 --> 01:27:54,530
comes.

1108
01:27:55,750 --> 01:28:00,510
So therefore, we need to look at the
price to define.

1109
01:28:02,480 --> 01:28:07,540
what supply and demand are doing on a
specific volume bar.

1110
01:28:09,180 --> 01:28:15,280
So in the first case, the price is
reversing up after making a higher low,

1111
01:28:15,280 --> 01:28:20,420
then it slowly starts to go up. So we
are suspecting that our accumulation

1112
01:28:20,420 --> 01:28:21,420
is being confirmed.

1113
01:28:22,240 --> 01:28:27,500
In the second scenario, once we have the
commitment below the low of what we

1114
01:28:27,500 --> 01:28:29,100
thought was a potential spring,

1115
01:28:29,879 --> 01:28:34,960
That's it. The scenario of the spring is
negated. And because of the failure,

1116
01:28:35,080 --> 01:28:39,240
we're starting to think that the bias is
to the downside and that we need to

1117
01:28:39,240 --> 01:28:45,820
acknowledge this

1118
01:28:45,820 --> 01:28:48,340
commitment to the downside as a sign of
weakness.

1119
01:28:48,900 --> 01:28:50,560
And that's the main difference.

1120
01:28:51,220 --> 01:28:55,520
So even though we studied the volume
signatures, we studied the supply

1121
01:28:55,520 --> 01:28:57,440
signatures and the demand signatures,

1122
01:28:58,200 --> 01:29:04,640
It's all useless if you're not using the
price and what the price is doing, how

1123
01:29:04,640 --> 01:29:07,340
the price reacts to that emergence of
the supply.

1124
01:29:08,480 --> 01:29:11,020
So this exercise is all about that.

1125
01:29:11,660 --> 01:29:15,540
And if you're going to take something
from today's session, take that.

1126
01:29:16,080 --> 01:29:18,540
This is a very, very important concept.

1127
01:29:19,600 --> 01:29:20,600
All right, great.

1128
01:29:23,980 --> 01:29:26,020
Now let's go to the next portion.

1129
01:29:26,570 --> 01:29:31,450
of our class we're at 4 30 so we'll
definitely go to 5 30 and let's just see

1130
01:29:31,450 --> 01:29:38,210
where we are with that at that point so
i keep showing you guys uh the homework

1131
01:29:38,210 --> 01:29:44,730
that you keep sending me um i really
like so many variations that you send so

1132
01:29:44,730 --> 01:29:50,480
this one comes from jose and this is
just phenomenal work I like the table.

1133
01:29:50,720 --> 01:29:55,920
I like all of the abbreviations here. I
like all of the comparisons. All of our

1134
01:29:55,920 --> 01:29:57,100
material is here.

1135
01:29:57,380 --> 01:30:03,320
And then such great, you know, forum to
show the explanation for each bar.

1136
01:30:04,340 --> 01:30:09,940
And then, you know, there is a legend
here. So that's just very cool.

1137
01:30:10,360 --> 01:30:12,400
So thank you for sending this, Jose.

1138
01:30:13,020 --> 01:30:16,880
Another example from Doug and this one.

1139
01:30:17,440 --> 01:30:21,300
has a little bit more elaborate
description for each bar.

1140
01:30:21,680 --> 01:30:26,720
So again, I love this a lot. And with
that also comes, you know, a more

1141
01:30:26,720 --> 01:30:32,580
abbreviated version for each of the
bars. So that's also great. A couple of

1142
01:30:32,580 --> 01:30:34,840
questions from Doug. So let's address
this right away.

1143
01:30:35,180 --> 01:30:36,180
The volume.

1144
01:30:36,800 --> 01:30:39,740
When evaluating volume effort.

1145
01:30:39,960 --> 01:30:41,640
So let's make a distinction.

1146
01:30:42,740 --> 01:30:46,580
Volume and effort are two different
things.

1147
01:30:47,739 --> 01:30:54,020
is going to be looked at as the
difference between,

1148
01:30:54,300 --> 01:31:00,800
let's say, volume number two and volume
number

1149
01:31:00,800 --> 01:31:03,220
one, right, between two different bars.

1150
01:31:03,580 --> 01:31:08,140
And we're going to say that, okay, there
is a huge difference in volume, so

1151
01:31:08,140 --> 01:31:09,140
something like this.

1152
01:31:09,740 --> 01:31:12,860
And we know that, let's say, demand has
increased here.

1153
01:31:13,340 --> 01:31:17,120
So we're going to say that the effort to
the upside has increased.

1154
01:31:19,140 --> 01:31:24,060
And I know that it's going to look the
same. Volume is going to increase.

1155
01:31:24,060 --> 01:31:26,360
is going to increase. Effort to the
upside is going to increase.

1156
01:31:26,640 --> 01:31:32,340
But it's important for us to make that
distinction that effort is just kind of

1157
01:31:32,340 --> 01:31:38,400
like a force behind the volume
signature.

1158
01:31:38,780 --> 01:31:41,760
It could be on the demand side. It could
be on the supply side.

1159
01:31:42,430 --> 01:31:46,770
And it's the difference of what we've
seen as the force before to what is

1160
01:31:46,770 --> 01:31:47,770
happening right now.

1161
01:31:49,050 --> 01:31:55,770
And the question here is, are we
recording the absolute level of volume

1162
01:31:55,770 --> 01:32:00,350
its relationship to the previous bar or
even a series of previous bars?

1163
01:32:01,290 --> 01:32:05,610
And this is a great question because,
and we kind of addressed this already

1164
01:32:05,610 --> 01:32:07,810
today to a certain degree.

1165
01:32:09,870 --> 01:32:11,690
We are going to look at...

1166
01:32:12,000 --> 01:32:17,580
A couple of things. We definitely would
like to understand the relationship

1167
01:32:17,580 --> 01:32:24,340
between, let's say, a single bar and
maybe another single bar, or maybe a

1168
01:32:24,340 --> 01:32:31,140
series of bars that would show us the
same type of action, right? So

1169
01:32:31,140 --> 01:32:36,140
if there is selling, so we want to look
at the increased supply signature, and

1170
01:32:36,140 --> 01:32:40,340
then we want to see how supply is
decreasing on the next reaction.

1171
01:32:40,830 --> 01:32:46,110
So imagine that maybe on the one single
bar, we could have a bar like this, just

1172
01:32:46,110 --> 01:32:48,550
a big bar, and it's going to be to the
downside.

1173
01:32:48,910 --> 01:32:53,190
And then where we have more of the
consistency of saline, right? So this

1174
01:32:53,190 --> 01:32:56,470
reaction might have just, you know,
different bars.

1175
01:32:56,770 --> 01:32:59,310
But basically, these are the same
things.

1176
01:32:59,630 --> 01:33:00,830
These are reactions.

1177
01:33:01,230 --> 01:33:03,190
They just happen in a different way.

1178
01:33:03,600 --> 01:33:07,720
One is happening on the climactic volume
with the big move to the downside on

1179
01:33:07,720 --> 01:33:08,559
the single bar.

1180
01:33:08,560 --> 01:33:12,080
Another reaction happens on the series
of bars.

1181
01:33:12,400 --> 01:33:17,960
So therefore, what we want to do is we
want to compare the volume signature in

1182
01:33:17,960 --> 01:33:18,799
different ways.

1183
01:33:18,800 --> 01:33:22,600
We could look at the absolute

1184
01:33:22,600 --> 01:33:27,740
volume signature metric. That's number
one.

1185
01:33:28,100 --> 01:33:31,540
We could look also at, let's say, the...

1186
01:33:36,660 --> 01:33:43,400
we could look also at the consistency of
the

1187
01:33:43,400 --> 01:33:44,820
demand and supply.

1188
01:33:45,200 --> 01:33:51,260
And by consistency, I mean that for
multiple days, the price goes down and

1189
01:33:51,260 --> 01:33:53,380
is some selling. That's consistency.

1190
01:33:53,620 --> 01:33:58,320
This type of selling, where there is
only one bar that occurs, is not

1191
01:33:58,320 --> 01:34:04,060
consistent. It could be just one day
selling, one day reaction, and then big

1192
01:34:04,060 --> 01:34:10,460
hands coming in, absorbing all of the
supply, and then we are done. So there

1193
01:34:10,460 --> 01:34:13,720
no consistent selling from day to day,
week to week.

1194
01:34:14,220 --> 01:34:18,300
So those are the three things that we
would be looking at. And we'll

1195
01:34:18,300 --> 01:34:20,500
discuss it more as we go through the
exercise.

1196
01:34:21,000 --> 01:34:23,340
Let's look at the second question. It's
on the intention.

1197
01:34:24,060 --> 01:34:27,420
On an upswing, is the intention...

1198
01:34:28,520 --> 01:34:31,120
is to suppress the resistance.

1199
01:34:31,520 --> 01:34:32,520
Yes.

1200
01:34:33,300 --> 01:34:40,040
This is always going to be the intention
for the price to do, right? To

1201
01:34:40,040 --> 01:34:45,040
overcome the resistance or to commit
below a support.

1202
01:34:48,640 --> 01:34:54,980
So this is the intention for a bar

1203
01:34:54,980 --> 01:34:56,460
or a price.

1204
01:34:58,289 --> 01:35:02,950
Now, COO has intention to push the price
back into the trading range.

1205
01:35:04,030 --> 01:35:08,790
So let's say that we have a commitment
to the upside, but let's say supply

1206
01:35:08,790 --> 01:35:09,790
signature increases.

1207
01:35:09,990 --> 01:35:12,410
So we are suspecting that COO is
selling.

1208
01:35:12,990 --> 01:35:15,470
So what is the intention by the COO?

1209
01:35:17,470 --> 01:35:23,490
Well, obviously, it's just to sell,
right? So to get rid of the position or

1210
01:35:23,490 --> 01:35:25,570
to short the position.

1211
01:35:26,590 --> 01:35:33,160
Short. hedge, exit, scale out.

1212
01:35:35,340 --> 01:35:40,960
So those two intentions, Doug, are
completely different.

1213
01:35:41,200 --> 01:35:42,780
One is just for the price.

1214
01:35:43,340 --> 01:35:47,660
In the first case, we just want to see
the price committing above the

1215
01:35:47,660 --> 01:35:49,720
or below the support.

1216
01:35:50,140 --> 01:35:51,740
This is just price related.

1217
01:35:51,980 --> 01:35:56,720
In the second case, the CO's intention
could be different at the point of the

1218
01:35:56,720 --> 01:36:03,660
resistance. It could be to sell, to
short the stock, to exit the stock, to

1219
01:36:03,660 --> 01:36:06,420
scale out, or to take some profit.

1220
01:36:07,180 --> 01:36:12,080
It also could be different, and you're
kind of describing it in the next

1221
01:36:12,080 --> 01:36:17,420
question, is where we could have that
increase of the supply on one bar, and

1222
01:36:17,420 --> 01:36:23,740
then there is some kind of absorption
that is happening through next bars.

1223
01:36:24,559 --> 01:36:29,840
And then the intention for the CEO are
going to be different in this situation.

1224
01:36:30,700 --> 01:36:34,460
The first scenario that you're
describing is more of the distributional

1225
01:36:34,600 --> 01:36:37,400
The second one is going to be more of
the accumulational qualities.

1226
01:36:38,480 --> 01:36:43,300
But I think that the key here is just to
understand that when we talk about the

1227
01:36:43,300 --> 01:36:48,120
commitment of the price above or below
the resistance and the support, the

1228
01:36:48,120 --> 01:36:50,160
intention there is just for the price.

1229
01:36:50,600 --> 01:36:55,460
or for the specific bar, and then with
the SEO, it's all contextual.

1230
01:36:55,880 --> 01:36:57,080
What do they want?

1231
01:36:57,800 --> 01:36:59,420
Are they selling or are they buying?

1232
01:37:00,220 --> 01:37:02,860
All right, great. Let's go to the next
one.

1233
01:37:04,580 --> 01:37:09,280
This is another example. This one comes
from Rick, and I thought that was really

1234
01:37:09,280 --> 01:37:15,660
cool because it just shows you guys that
there is no discrimination to how you

1235
01:37:15,660 --> 01:37:19,380
approach this work as long as you do
something.

1236
01:37:20,110 --> 01:37:23,390
And I see here a lot of something.

1237
01:37:23,670 --> 01:37:29,750
I see that Rick has gone through this
visually, manually,

1238
01:37:30,090 --> 01:37:36,490
with the pencil, going through all of
these concepts, labeling those, putting

1239
01:37:36,490 --> 01:37:42,110
them in the way that he understands for
himself. And that's what just excites me

1240
01:37:42,110 --> 01:37:45,150
so much when I receive something like
this from you.

1241
01:37:46,570 --> 01:37:50,710
Yes. There are so many different ways of
how you could go through this material

1242
01:37:50,710 --> 01:37:56,290
and all of them are correct and all of
them are okay because it's just you.

1243
01:37:56,530 --> 01:38:01,870
So just keep doing what you're doing and
I support you all the way.

1244
01:38:02,930 --> 01:38:03,930
All right.

1245
01:38:04,750 --> 01:38:10,330
Next couple of bars are quite
entertaining and those come from Lee.

1246
01:38:11,510 --> 01:38:16,410
And this is the concept that we
obviously have mentioned multiple times.

1247
01:38:17,190 --> 01:38:23,850
This is the concept that I'm thinking,
Lee, that these are great slides, so I

1248
01:38:23,850 --> 01:38:30,470
might have to ask you to incorporate
some of them into the course without me

1249
01:38:30,470 --> 01:38:33,150
creating all of that.

1250
01:38:33,710 --> 01:38:40,510
But the concept here is the concept of
the test of the

1251
01:38:40,510 --> 01:38:44,870
supply. And the key here, and I'm just
going to go really quickly here, but you

1252
01:38:44,870 --> 01:38:45,839
could guys...

1253
01:38:45,840 --> 01:38:52,180
You can stop the recording and, you
know, as you go through the slides for

1254
01:38:52,180 --> 01:38:56,400
class, you could stop and just read this
whole explanation, which I thought was

1255
01:38:56,400 --> 01:38:57,900
really good.

1256
01:38:58,860 --> 01:39:03,620
Look at the increase of the supply at
14.

1257
01:39:05,460 --> 01:39:10,040
And we are saying with the increase of
the supply, we should have a test of

1258
01:39:10,040 --> 01:39:11,040
supply.

1259
01:39:12,980 --> 01:39:14,640
And we're kind of seeing that.

1260
01:39:15,130 --> 01:39:19,730
Around 15, 16, 17, supply really went
down.

1261
01:39:20,250 --> 01:39:24,350
So locally, this is a test of the supply
that came at 14.

1262
01:39:24,970 --> 01:39:29,110
This decrease of the supply suggests
that we are going to have a rally, which

1263
01:39:29,110 --> 01:39:30,110
happens.

1264
01:39:30,150 --> 01:39:35,710
But we also would like to have a test of
the same magnitude.

1265
01:39:38,910 --> 01:39:44,110
And that's why the current market is
suggesting.

1266
01:39:44,800 --> 01:39:47,680
that we are going to have a reaction at
some point.

1267
01:39:48,360 --> 01:39:53,420
And that reaction is going to bring a
lot of fear into weak hands.

1268
01:39:53,640 --> 01:39:54,640
They're going to capitulate.

1269
01:39:54,860 --> 01:39:58,780
Not only that, a lot of institutions are
going to capitulate.

1270
01:39:59,020 --> 01:40:02,880
They're going to take the profits that
they've done in the last two months.

1271
01:40:03,620 --> 01:40:10,320
And do you know that January and
February are becoming one of the best

1272
01:40:10,320 --> 01:40:12,640
in the history for money managers?

1273
01:40:13,160 --> 01:40:14,320
Why? Because...

1274
01:40:14,600 --> 01:40:20,480
In a lot of positions that those money
managers are, even without adding to the

1275
01:40:20,480 --> 01:40:27,200
position, those positions would produce
such big rallies off the low of

1276
01:40:27,200 --> 01:40:28,580
December 25th.

1277
01:40:29,120 --> 01:40:34,200
And it just coincides with January,
which is the first month, and it just

1278
01:40:34,200 --> 01:40:36,560
produces such good returns.

1279
01:40:38,660 --> 01:40:41,600
So they're going to take some profit.

1280
01:40:42,040 --> 01:40:44,600
especially when we're going to see that
the market's going to start

1281
01:40:44,600 --> 01:40:50,200
deteriorating and imagine any bad news
coming at this point. And then we're

1282
01:40:50,200 --> 01:40:54,320
probably going to consolidate because
that increase of the supply, like here,

1283
01:40:54,540 --> 01:40:57,100
suggests that we're going to go through
the consolidation.

1284
01:40:57,620 --> 01:41:01,760
It suggests that the supply needs to be
tested again.

1285
01:41:02,000 --> 01:41:08,140
And it needs to be tested on the same
magnitude level. And sometimes the

1286
01:41:08,140 --> 01:41:09,140
magnitude...

1287
01:41:12,880 --> 01:41:14,700
could be defined in two ways.

1288
01:41:15,740 --> 01:41:21,240
Sometimes magnitude could be of the same
proportional reaction.

1289
01:41:21,940 --> 01:41:28,660
And in other cases, it could be more of
a prolonged consolidation

1290
01:41:28,660 --> 01:41:29,980
action.

1291
01:41:33,200 --> 01:41:38,860
So I think that we're probably going to
see something like this rather than a

1292
01:41:38,860 --> 01:41:41,140
much deeper reaction to the lows in
December.

1293
01:41:41,770 --> 01:41:48,470
just because of how Rally is so
aggressive to the upside. That suggests

1294
01:41:48,470 --> 01:41:53,610
that there was a lot of institutional
demand, and as the price is going to go

1295
01:41:53,610 --> 01:41:58,070
down, they're going to provide some kind
of support, and they're going to see

1296
01:41:58,070 --> 01:42:03,630
some value as the price goes down. So
that's going to create some trading

1297
01:42:03,630 --> 01:42:08,610
that's going to be unfolding for quite
some time. So that's kind of like my...

1298
01:42:08,920 --> 01:42:12,680
one of my assumptions for the markets
but coming back to schematic number one

1299
01:42:12,680 --> 01:42:19,500
here on this slide we see that the same
magnitude reaction into 21

1300
01:42:19,500 --> 01:42:26,200
22 even though produces a decrease in
supply from phase

1301
01:42:26,200 --> 01:42:33,020
a the supply is increasing relative to
the previous test in areas

1302
01:42:33,020 --> 01:42:34,020
number 15 16.

1303
01:42:36,560 --> 01:42:39,940
So why would that be happening?

1304
01:42:40,140 --> 01:42:46,700
Well, as we know, and as Lee actually

1305
01:42:46,700 --> 01:42:53,300
explains here in this text, this
increase in the volume signature

1306
01:42:53,300 --> 01:42:57,300
could also suggest...

1307
01:42:57,300 --> 01:43:02,620
Just a second.

1308
01:43:05,960 --> 01:43:11,220
would also suggest that there is not
only increasing supply, but there is

1309
01:43:11,220 --> 01:43:12,320
increasing the demand.

1310
01:43:12,580 --> 01:43:17,980
So that's a given. But we know that,
again, increasing the supply, as it was

1311
01:43:17,980 --> 01:43:21,900
increasing the supply here, suggests
what? Suggests retesting.

1312
01:43:23,680 --> 01:43:28,720
So therefore, we know that the retest,
the true retest, the successful retest,

1313
01:43:28,720 --> 01:43:34,000
after which we should have a much better
movement to the upside, should come.

1314
01:43:34,520 --> 01:43:38,840
with two points one structural point
higher low and then the second volume

1315
01:43:38,840 --> 01:43:45,180
signature uh dimension supply signature
and then at 24 we have that test

1316
01:43:45,180 --> 01:43:51,820
and that test is a lower supply test and
a higher low structural

1317
01:43:51,820 --> 01:43:58,420
test so we finally have tested the
supply that came here and then here

1318
01:43:58,420 --> 01:44:02,120
and finally we're saying now the price
is ready to move out

1319
01:44:03,790 --> 01:44:10,550
So that defines the timing of when the
price could potentially leave the

1320
01:44:10,550 --> 01:44:17,430
range. So I thought it was really cool
how Lee worked us through this on this

1321
01:44:17,430 --> 01:44:22,370
slide. I wanted you guys to have this,
and Lee, thank you for this work.

1322
01:44:24,150 --> 01:44:29,070
There is more explanation here, so just
go through this, and hopefully Lee, you

1323
01:44:29,070 --> 01:44:34,380
don't mind that I'm sharing this. I
usually assume that Whatever guys'

1324
01:44:34,380 --> 01:44:41,300
you sent me, whatever questions you sent
me, it's okay to put them into

1325
01:44:41,300 --> 01:44:47,600
the context of our discussions because
usually the questions that you ask are

1326
01:44:47,600 --> 01:44:49,580
the minds of many students.

1327
01:44:50,880 --> 01:44:55,540
It's just been proven from cycle to
cycle that if you have a question, most

1328
01:44:55,540 --> 01:44:57,700
likely somebody is thinking about the
same thing.

1329
01:44:59,020 --> 01:45:02,300
Please do send me the questions. Please
do send me work like this.

1330
01:45:02,840 --> 01:45:09,800
It excites me to see that there is so
much deep thinking and refinement on

1331
01:45:09,800 --> 01:45:10,820
this material.

1332
01:45:13,520 --> 01:45:16,440
Okay, and then a couple of questions
here from Lee.

1333
01:45:18,800 --> 01:45:20,620
And then we're going to go into the
exercise.

1334
01:45:29,100 --> 01:45:33,740
So an assumption here that the
professionals will be carrying out mean

1335
01:45:33,740 --> 01:45:36,980
trade into

1336
01:45:36,980 --> 01:45:43,700
the overbought areas

1337
01:45:43,700 --> 01:45:45,560
above the institutional value zone.

1338
01:45:46,340 --> 01:45:51,240
The professionals here will still be
considered as strong hands. That's the

1339
01:45:51,240 --> 01:45:56,060
question. And let's just think about
where the value is.

1340
01:45:56,670 --> 01:46:01,750
for the professionals here on this
particular chart.

1341
01:46:02,010 --> 01:46:07,910
So this is Apple, and this is a daily
chart,

1342
01:46:08,130 --> 01:46:11,610
just as a reference.

1343
01:46:11,850 --> 01:46:17,590
So we defined the institutional value by
how? Well, we saw some buying here on

1344
01:46:17,590 --> 01:46:19,310
the change of character, these two bars.

1345
01:46:19,930 --> 01:46:24,650
And then after that, this was more of
the selling that came on this bar, so we

1346
01:46:24,650 --> 01:46:25,650
don't want to include that.

1347
01:46:25,850 --> 01:46:30,790
And we're thinking that anything above
is overbought, anything below is

1348
01:46:30,790 --> 01:46:34,210
oversold, kind of like the same distance
that we have.

1349
01:46:35,230 --> 01:46:40,370
So somewhere in between, in the middle,
this is where they really like the value

1350
01:46:40,370 --> 01:46:45,630
here. So anything that goes below $0
.70, they would be buying. So that's why

1351
01:46:45,630 --> 01:46:47,850
see how the price recovers really quick.

1352
01:46:48,430 --> 01:46:50,130
out of these oversold conditions.

1353
01:46:50,710 --> 01:46:55,550
So think about the professionals and

1354
01:46:55,550 --> 01:47:02,430
mean reversion trade that they're going
to do.

1355
01:47:03,210 --> 01:47:07,790
They're going to identify those
oversold, overbought conditions, and

1356
01:47:07,790 --> 01:47:12,850
just basically going to buy at the short
-term oversold condition, and then

1357
01:47:12,850 --> 01:47:17,710
they're going to sell at the overbought
condition.

1358
01:47:18,400 --> 01:47:22,220
And they're just basically recognizing a
trading range condition.

1359
01:47:23,040 --> 01:47:29,840
Now, this is one thing that people might
forget about mean reversion trades

1360
01:47:29,840 --> 01:47:32,520
and how professionals use that.

1361
01:47:32,940 --> 01:47:38,020
Because a mean reversion trade in the
trading range is going to look different

1362
01:47:38,020 --> 01:47:41,540
than a mean reversion trade in the
uptrend.

1363
01:47:42,840 --> 01:47:47,640
So we know exactly how this happens.
Now, think about what happens next.

1364
01:47:48,060 --> 01:47:52,600
right so buying and then selling

1365
01:47:52,600 --> 01:47:59,560
and then shorting again on the mean
reversion trade and

1366
01:47:59,560 --> 01:48:05,900
then this becomes a loss for them now
once this becomes a loss that

1367
01:48:05,900 --> 01:48:11,460
dictates a switch um in the definition
in their minds and the definition for

1368
01:48:11,460 --> 01:48:16,700
environment why well because now that
this is a loss This just basically tells

1369
01:48:16,700 --> 01:48:19,900
professionals that this trade no longer
works in this environment.

1370
01:48:20,200 --> 01:48:24,220
So therefore, most likely, we are in a
different environment. What environment

1371
01:48:24,220 --> 01:48:25,220
is that?

1372
01:48:25,240 --> 01:48:27,420
Higher highs, higher lows.

1373
01:48:28,280 --> 01:48:29,280
An uptrend.

1374
01:48:29,740 --> 01:48:35,020
So in the uptrend, the mean reversion
trade is going to work in a slightly

1375
01:48:35,020 --> 01:48:36,020
different way.

1376
01:48:37,680 --> 01:48:39,800
I think we've talked about this, right?

1377
01:48:40,730 --> 01:48:45,370
Overbought condition, oversold
condition, both are short -term. So long

1378
01:48:45,370 --> 01:48:52,170
uptrend, short -term oversold, short
-term overbought. So mean reversion

1379
01:48:52,170 --> 01:48:58,370
in the overbought condition is going to
be technically executed the same way.

1380
01:48:58,450 --> 01:49:03,130
They're going to short into the
overbought condition, but it's going to

1381
01:49:03,130 --> 01:49:05,710
the definition of a longer -term
uptrend.

1382
01:49:07,520 --> 01:49:11,800
Their move to the downside, their target
is going to be defined by the short

1383
01:49:11,800 --> 01:49:13,240
-term oversold condition.

1384
01:49:13,560 --> 01:49:17,260
And then again, they're going to be
buyers in the short -term oversold

1385
01:49:17,260 --> 01:49:20,920
condition, and then they will be sellers
in the overbought condition.

1386
01:49:23,880 --> 01:49:30,820
So that's how this mean reversion
trading is

1387
01:49:30,820 --> 01:49:35,200
going to change for the professionals,
because they also will be looking at

1388
01:49:35,200 --> 01:49:37,240
the... difference in the environment.

1389
01:49:38,080 --> 01:49:42,980
Okay, so let's see what happens next
here. If these professionals are,

1390
01:49:43,060 --> 01:49:48,380
are they what, strong hands?

1391
01:49:48,620 --> 01:49:52,280
Okay, yeah, it looks so different for
some reason. If these professionals are

1392
01:49:52,280 --> 01:49:55,840
strong hands, and we're going to assume
that professionals are going to be

1393
01:49:55,840 --> 01:50:00,080
almost always strong hands with an
exception of this trait right here.

1394
01:50:00,600 --> 01:50:03,220
So it's only on the change of
environment.

1395
01:50:04,580 --> 01:50:06,380
this is where they're going to be wrong.

1396
01:50:07,080 --> 01:50:12,520
Everything else, if they define the
environment correctly, then it doesn't

1397
01:50:12,520 --> 01:50:13,520
really matter.

1398
01:50:14,180 --> 01:50:20,560
This is actually one of the best
consistent traits that you could have,

1399
01:50:20,560 --> 01:50:21,560
could possibly have.

1400
01:50:21,800 --> 01:50:24,660
Think about this simplistic system.

1401
01:50:25,160 --> 01:50:29,840
Step number one, define the environment.

1402
01:50:32,100 --> 01:50:37,110
Step number two, Define short -term
extreme conditions.

1403
01:50:40,410 --> 01:50:42,470
Step number three, execute.

1404
01:50:44,030 --> 01:50:47,270
There is nothing else to this strategy.

1405
01:50:47,710 --> 01:50:54,110
I mean, there might be some variation
from like extreme price movement,

1406
01:50:54,110 --> 01:50:59,410
climactic movement in the volume
signature and so on and so forth. But

1407
01:50:59,410 --> 01:51:01,550
how simple trading could be.

1408
01:51:03,020 --> 01:51:08,460
And obviously, this simplicity only
comes after a deeper understanding of

1409
01:51:08,460 --> 01:51:09,460
the market works.

1410
01:51:10,260 --> 01:51:14,840
So sometimes to be that simple, we have
to become more complicated first.

1411
01:51:16,000 --> 01:51:21,540
Okay, so if these professionals have
strong hands after the

1412
01:51:21,540 --> 01:51:27,920
mean reversion trade, they will be
reaccumulating their shares again in the

1413
01:51:27,920 --> 01:51:29,740
value zone as well as the...

1414
01:51:30,890 --> 01:51:33,750
oversold areas, and I think that we went
through this, right? So they're going

1415
01:51:33,750 --> 01:51:36,870
to make this trade, they're going to
sell here. This is going to be a loss,

1416
01:51:36,870 --> 01:51:40,770
then they're going to, again, do a
different mean reversion. They're going

1417
01:51:40,770 --> 01:51:45,290
sell here, they're going to buy here
after the trend has been defined.

1418
01:51:47,550 --> 01:51:52,430
Explanation about the party which is
responsible for MIT so far was referring

1419
01:51:52,430 --> 01:51:56,570
the professional zone. Does it mean that
ITFs or the CEO are not participating

1420
01:51:56,570 --> 01:51:58,950
in conducting a mean reversion trade?

1421
01:51:59,480 --> 01:52:03,760
Yeah, I definitely see the point that
you're making, Lee, and it's true.

1422
01:52:04,700 --> 01:52:09,020
Both CO and ITF could be involved in
that type of trading.

1423
01:52:09,520 --> 01:52:15,640
Maybe it's not going to be necessarily a
predominant strategy because the CO

1424
01:52:15,640 --> 01:52:22,340
strategy is all going to be about big
secular

1425
01:52:22,340 --> 01:52:26,200
and business cycle moves.

1426
01:52:29,100 --> 01:52:33,500
And then ITF are going to be all
oriented to trend following.

1427
01:52:38,100 --> 01:52:44,800
And then professionals are going to be
doing the mean reversion trade. So the

1428
01:52:44,800 --> 01:52:51,520
reason why I kind of grouped them
together like this is because those

1429
01:52:51,520 --> 01:52:57,440
are different types of trading that is
available to institutions.

1430
01:52:58,490 --> 01:53:04,250
And even the CEO could be at some point
conducting those type of trades within

1431
01:53:04,250 --> 01:53:07,450
the context of the trading range.

1432
01:53:08,070 --> 01:53:13,430
They might be selling here some of their
position that they've acquired at this

1433
01:53:13,430 --> 01:53:18,510
point just to take the profit and be
profitable for that position. Because

1434
01:53:18,510 --> 01:53:23,350
risk is always like this looming
question is, how am I exposed to the

1435
01:53:23,650 --> 01:53:26,650
How is my portfolio exposed to the
market?

1436
01:53:27,280 --> 01:53:31,600
So they might take some profit and that
could become a mean reversion type of

1437
01:53:31,600 --> 01:53:32,600
profit taking.

1438
01:53:32,900 --> 01:53:37,320
And they could even have some hedging
mechanism, which is the mean reversion

1439
01:53:37,320 --> 01:53:38,318
trade by itself.

1440
01:53:38,320 --> 01:53:42,980
To me, what was important is just to
understand that there are institutions

1441
01:53:42,980 --> 01:53:45,880
operate on a very, very high timeframe.

1442
01:53:46,400 --> 01:53:52,960
And then there are institutions that are
definitely following the context of an

1443
01:53:52,960 --> 01:53:53,960
environment.

1444
01:53:54,060 --> 01:53:58,960
in both ways, whether it's trending
environment or non -trending

1445
01:53:59,560 --> 01:54:04,280
Or a trending environment, but you
still, the trades are kind of like with,

1446
01:54:04,280 --> 01:54:09,280
the uptrend, downtrend, in the mean
reversion trade, they are going to be

1447
01:54:09,280 --> 01:54:16,060
of isolation trades between the short
-term oversold and short -term

1448
01:54:16,060 --> 01:54:17,060
overbought conditions.

1449
01:54:17,780 --> 01:54:19,000
All right, great.

1450
01:54:19,680 --> 01:54:21,420
There was one more question.

1451
01:54:22,620 --> 01:54:23,980
Why don't we do this, Lee?

1452
01:54:25,020 --> 01:54:31,260
Why don't we leave this for next class?
I think we're going through too many

1453
01:54:31,260 --> 01:54:32,260
questions today.

1454
01:54:32,620 --> 01:54:39,380
And instead, and Lee, by the way, thank
you very much for all

1455
01:54:39,380 --> 01:54:40,380
this work.

1456
01:54:41,420 --> 01:54:46,480
And instead, what we're going to do is
let's jump to the exercise. We have

1457
01:54:46,480 --> 01:54:48,900
25 minutes or so.

1458
01:54:49,720 --> 01:54:53,760
So I want us to do a little bit more. So
let's just see where we're going to

1459
01:54:53,760 --> 01:54:58,100
stop. Maybe we'll go beyond that. Maybe
we'll go beyond 530 today.

1460
01:54:59,000 --> 01:55:00,180
I need a volunteer.

1461
01:55:00,520 --> 01:55:04,400
And the first thing that we're going to
do as we come back to the group

1462
01:55:04,400 --> 01:55:10,960
exercises, we're going to look at the
trading range from 33 to 37.

1463
01:55:11,940 --> 01:55:15,680
And then we're going to discuss it. We
want to understand what the bias is

1464
01:55:15,740 --> 01:55:16,740
We want to understand.

1465
01:55:17,440 --> 01:55:21,820
you know, what phase we're in. We want
to understand what might happen next and

1466
01:55:21,820 --> 01:55:22,820
so on and so forth.

1467
01:55:22,900 --> 01:55:23,900
So volunteer.

1468
01:55:24,960 --> 01:55:27,480
Just say yes and I'm going to unmute
you.

1469
01:55:37,960 --> 01:55:40,080
We should have some music while I'm
waiting.

1470
01:55:45,400 --> 01:55:46,400
Okay.

1471
01:55:47,920 --> 01:55:48,920
Let's go with Rick.

1472
01:55:49,120 --> 01:55:50,160
Hey, Rick, how are you doing?

1473
01:55:53,260 --> 01:55:54,260
Rick, are you there?

1474
01:55:56,540 --> 01:55:57,540
Yes, can you hear me?

1475
01:55:57,860 --> 01:55:58,860
Yes, yes.

1476
01:55:59,940 --> 01:56:02,840
Some noise, background noise a little
bit.

1477
01:56:03,600 --> 01:56:06,380
So maybe you could just be a little bit
closer to the microphone.

1478
01:56:06,640 --> 01:56:07,640
That would be great.

1479
01:56:08,860 --> 01:56:10,720
Okay, and then... It's settled.

1480
01:56:11,420 --> 01:56:17,100
Uh -huh, okay. And then I think that we
stopped at 32, 33.

1481
01:56:17,920 --> 01:56:23,880
right, about this area right here,
right?

1482
01:56:26,120 --> 01:56:31,840
Okay. And so what I want to quickly

1483
01:56:31,840 --> 01:56:38,040
repeat is 31 and then 32 and then 33.

1484
01:56:38,280 --> 01:56:42,420
So on 31, let's quickly talk about 31.

1485
01:56:42,700 --> 01:56:44,380
What is effort doing?

1486
01:56:48,970 --> 01:56:49,990
efforts increasing?

1487
01:56:50,450 --> 01:56:53,030
Yes, effort is definitely increasing.

1488
01:56:53,330 --> 01:56:59,530
This is the highest volume signature, so
we'll talk about the effort, you know,

1489
01:56:59,570 --> 01:57:00,570
what it means.

1490
01:57:00,630 --> 01:57:05,430
So if we would be looking at some analog
bars, the bars that are overcoming the

1491
01:57:05,430 --> 01:57:11,490
point of the resistance, like this, like
this,

1492
01:57:11,610 --> 01:57:18,270
like this bar right here, maybe this bar
right here with

1493
01:57:18,880 --> 01:57:20,420
this resistance here.

1494
01:57:20,660 --> 01:57:25,360
So look at all of those bars and look at
their volume signatures.

1495
01:57:26,140 --> 01:57:32,340
In all of these cases, there is some
kind of increase in the volume signature

1496
01:57:32,340 --> 01:57:34,200
relative to what we've seen before.

1497
01:57:35,780 --> 01:57:38,040
And that's what effort is all about.

1498
01:57:38,660 --> 01:57:40,620
Effort, I'm sorry, this one right here.

1499
01:57:41,440 --> 01:57:47,500
Effort is more about the difference,
right? So we've had a lot of effort.

1500
01:57:48,490 --> 01:57:51,310
to the upside at this level right here.

1501
01:57:52,890 --> 01:57:59,350
And that's the effort of the demand
that's coming in and trying to

1502
01:57:59,350 --> 01:58:05,670
produce a new commitment in the
direction of the bias.

1503
01:58:06,190 --> 01:58:10,990
And whether it fails or whether it
doesn't fail, it doesn't really matter.

1504
01:58:10,990 --> 01:58:13,970
just want to measure how effort changes.

1505
01:58:14,290 --> 01:58:16,290
So now look at...

1506
01:58:16,960 --> 01:58:18,720
how effort has changed here.

1507
01:58:19,280 --> 01:58:21,260
This is the difference in effort.

1508
01:58:22,720 --> 01:58:26,280
So we definitely see that the effort has
increased tremendously.

1509
01:58:26,620 --> 01:58:28,280
What is the result? Yes.

1510
01:58:30,000 --> 01:58:33,260
Rick, what is the result? Is the result
increasing as well?

1511
01:58:36,160 --> 01:58:38,900
Bar number 31?

1512
01:58:40,740 --> 01:58:42,520
Yes, I would say it is.

1513
01:58:42,740 --> 01:58:45,850
Yeah. We see that it's spread.

1514
01:58:46,070 --> 01:58:49,990
This is the largest up spread that we
have seen so far.

1515
01:58:50,810 --> 01:58:52,470
So the spread is increasing.

1516
01:58:52,710 --> 01:58:55,010
The close is in the upper part of that
spread.

1517
01:58:55,230 --> 01:59:02,170
And we are committing heavily above the
resistance level of bar number

1518
01:59:02,170 --> 01:59:03,170
30.

1519
01:59:03,730 --> 01:59:08,950
So it's definitely increasing the result
as well.

1520
01:59:09,350 --> 01:59:10,410
Bullish or bearish?

1521
01:59:13,230 --> 01:59:14,430
Bullish. Bullish.

1522
01:59:15,330 --> 01:59:20,190
I'm glad that you said bullish because
obviously I'm showing you what happens

1523
01:59:20,190 --> 01:59:25,410
next. But short term, we are still
bullish at this point. Now, even though

1524
01:59:25,410 --> 01:59:31,350
are bullish, what is the hesitation that
we have about bar number 31?

1525
01:59:35,750 --> 01:59:39,850
I think that

1526
01:59:42,990 --> 01:59:44,470
Huge increase in effort?

1527
01:59:44,810 --> 01:59:45,810
Yeah.

1528
01:59:46,150 --> 01:59:52,970
The volume is so big, we know that
demand is increasing, but what

1529
01:59:52,970 --> 01:59:53,970
supply is doing?

1530
02:00:02,710 --> 02:00:06,590
Supply looks like it might be
diminishing.

1531
02:00:07,710 --> 02:00:11,250
Okay, so let's look at the supply from a
different perspective.

1532
02:00:11,960 --> 02:00:13,860
Let's look at the supply on these bars.

1533
02:00:15,800 --> 02:00:17,320
And this is the bar signature.

1534
02:00:17,920 --> 02:00:21,120
And then where do you think supply came
before this bar?

1535
02:00:31,360 --> 02:00:35,240
Obviously, it came probably on some kind
of reaction on the previous bar, right?

1536
02:00:38,400 --> 02:00:39,760
Oh, yeah, supply.

1537
02:00:40,780 --> 02:00:43,860
Yeah, where's the... 31 opposed to 30?

1538
02:00:44,120 --> 02:00:48,640
Yeah, so where's the evidence that...
Oh, some kind of news or something.

1539
02:00:49,120 --> 02:00:51,280
Yeah, so look at the Barnabas 30.

1540
02:00:52,640 --> 02:00:56,440
Yeah, just the spread and the volume
increase.

1541
02:00:57,300 --> 02:01:03,840
We see that Barnabas 30 has a supply
tail.

1542
02:01:07,690 --> 02:01:12,210
So supply tail is going to be the
difference between the high and the

1543
02:01:12,210 --> 02:01:16,750
we see that it goes below the one half
of the spread. So we know there was some

1544
02:01:16,750 --> 02:01:19,570
selling on the intraday basis right
there.

1545
02:01:20,330 --> 02:01:26,990
So we don't have to go that far away to
see the presence of supply on

1546
02:01:26,990 --> 02:01:29,130
nearby bars.

1547
02:01:29,550 --> 02:01:35,450
So think about the supply that we have
had on bar number 30. It's still a

1548
02:01:35,450 --> 02:01:36,450
bullish bar.

1549
02:01:37,099 --> 02:01:40,200
because from close to close, we're still
positive here.

1550
02:01:40,500 --> 02:01:43,960
But then some supply came here at the
end of the session.

1551
02:01:44,420 --> 02:01:49,360
So out of this volume signature, we're
probably seeing some demand, some

1552
02:01:49,600 --> 02:01:55,260
maybe something like this, maybe like 50
-50, maybe demand is slightly better,

1553
02:01:55,360 --> 02:01:57,200
so maybe like 60 -40, right?

1554
02:01:57,440 --> 02:01:59,220
So demand and supply.

1555
02:01:59,480 --> 02:02:06,140
Now, look at the next bar, bar number
31, and look at the high volume

1556
02:02:06,700 --> 02:02:07,700
Is it all demand?

1557
02:02:12,640 --> 02:02:13,640
No.

1558
02:02:14,040 --> 02:02:15,800
No, obviously not.

1559
02:02:16,060 --> 02:02:22,280
Okay, so if it's not all demand, then
could you think about

1560
02:02:22,280 --> 02:02:28,700
the levels of the supply that we might
have on this bar, especially knowing

1561
02:02:28,700 --> 02:02:29,700
comes next?

1562
02:02:31,160 --> 02:02:34,940
We know that there is some kind of stop
in action that is happening.

1563
02:02:36,440 --> 02:02:37,920
Yes, we are.

1564
02:02:38,920 --> 02:02:40,660
I'm sorry, Rick. I know that's coming.

1565
02:02:41,280 --> 02:02:47,760
Okay, so then the next question, is
supply increasing on bar number

1566
02:02:47,760 --> 02:02:48,760
31?

1567
02:02:50,320 --> 02:02:53,580
Yes. Yes, so we know that supply is
increasing.

1568
02:02:53,940 --> 02:02:59,580
Could we visualize this increase of the
supply on this big bar? I mean, where

1569
02:02:59,580 --> 02:03:04,520
would you put the supply? I mean, demand
is definitely dominating this bar.

1570
02:03:04,970 --> 02:03:09,010
So demand may be like, what, 80 % and
supply maybe 20 %?

1571
02:03:10,510 --> 02:03:16,870
Something like that? Would we say that?
So let's just say maybe supply is just

1572
02:03:16,870 --> 02:03:19,030
debt right here.

1573
02:03:19,730 --> 02:03:22,390
Well, actually, let's do the demand
first.

1574
02:03:23,250 --> 02:03:28,950
Let's just say that maybe demand is all
of this.

1575
02:03:30,190 --> 02:03:31,270
This is all demand.

1576
02:03:34,000 --> 02:03:36,360
And then supply is just this.

1577
02:03:36,900 --> 02:03:43,700
So relative to the previous bar, where
we see supply

1578
02:03:43,700 --> 02:03:47,300
is like this point right here. Let me
take another color.

1579
02:03:49,260 --> 02:03:50,960
Like supply is only this.

1580
02:03:51,480 --> 02:03:53,520
Now supply is this.

1581
02:03:53,940 --> 02:03:57,200
Demand still dominates supply so much.

1582
02:03:58,160 --> 02:04:03,040
But is supply increasing relative to
what we've seen on the previous bar?

1583
02:04:07,480 --> 02:04:13,040
No. Look at the level of the supply on
bar number 30 and compare it to the

1584
02:04:13,040 --> 02:04:14,460
of the supply on bar number 31.

1585
02:04:18,180 --> 02:04:19,420
Oh, just relative.

1586
02:04:19,740 --> 02:04:22,160
Yeah, the supply is increasing.

1587
02:04:22,540 --> 02:04:28,620
Yeah. And that's the whole point, guys.
Yeah. And that's why the volume

1588
02:04:28,620 --> 02:04:35,520
signature that we look at is so
confusing because we don't understand.

1589
02:04:36,320 --> 02:04:40,040
the relationship, the proportion between
demand and supply.

1590
02:04:40,420 --> 02:04:44,120
I'm going to show you some of the tools
later on when we're going to go into

1591
02:04:44,120 --> 02:04:47,940
more advanced studies and specifically
in practical.

1592
02:04:48,340 --> 02:04:55,080
We studied the market profile that helps
us to identify supply and demand a

1593
02:04:55,080 --> 02:05:00,400
little bit better. We also studied the
up and down net volume signature a

1594
02:05:00,400 --> 02:05:05,400
bit. It requires specific tools, but you
could definitely do that.

1595
02:05:05,870 --> 02:05:06,870
as well.

1596
02:05:07,150 --> 02:05:12,090
So, and it shows the picture more of
like this than the volume signature.

1597
02:05:12,370 --> 02:05:17,990
So, that's why, you know, a lot of the
traders just don't recognize that on

1598
02:05:17,990 --> 02:05:19,570
type of bar, supply is increasing.

1599
02:05:19,890 --> 02:05:23,430
I mean, relative to demand, it's
definitely lower.

1600
02:05:23,830 --> 02:05:29,190
Demand still dominates. But that
increase of the supply suggests some

1601
02:05:29,190 --> 02:05:31,650
that is happening already on this bar.

1602
02:05:32,740 --> 02:05:38,820
institutions are selling into the
strength of weak hands on this bar. And

1603
02:05:38,820 --> 02:05:43,420
suggests that they're going to still
keep selling if the price goes high

1604
02:05:43,420 --> 02:05:49,820
it creates more and more overbought
condition, overvalue for them for this

1605
02:05:49,820 --> 02:05:52,340
particular stock. So they will be
selling.

1606
02:05:53,920 --> 02:05:58,720
Okay. Well, Rick, what happens on bar
number 32 then?

1607
02:05:59,060 --> 02:06:00,820
What is happening with effort?

1608
02:06:08,390 --> 02:06:10,370
Effort is decreasing.

1609
02:06:10,910 --> 02:06:12,750
Decreasing. Effort to the opposite.

1610
02:06:13,010 --> 02:06:14,910
Decreasing. And then the result?

1611
02:06:20,230 --> 02:06:25,790
And the result is decreasing.

1612
02:06:26,250 --> 02:06:28,510
Okay. Bullish or bearish?

1613
02:06:35,950 --> 02:06:38,770
Bearish. Bearish. Short -term bearish.

1614
02:06:39,370 --> 02:06:46,250
Absolutely. Because we see that the
effort to push the price up is lower.

1615
02:06:46,890 --> 02:06:52,970
What does it mean? This means that the
demand is going down. So on the previous

1616
02:06:52,970 --> 02:06:58,990
bar, if we had demand signatures, all of
this, so now maybe on this next bar,

1617
02:06:59,110 --> 02:07:03,370
and we see some selling at the beginning
of the session right here, so maybe

1618
02:07:03,370 --> 02:07:05,070
demand now is...

1619
02:07:06,460 --> 02:07:13,280
something like this so even though this
bar looks uh foolish

1620
02:07:13,280 --> 02:07:19,440
we have seen deterioration of the demand
on this bar and by the way supply is

1621
02:07:19,440 --> 02:07:23,660
not necessarily growing on this bar it
could be the same it could be slightly

1622
02:07:23,660 --> 02:07:29,640
lower than on bar number 31 but because
demand starts to deteriorate that's

1623
02:07:29,640 --> 02:07:34,470
where the price is is kind of like not
capable of producing the same type of

1624
02:07:34,470 --> 02:07:36,090
results as on bar number 31.

1625
02:07:37,810 --> 02:07:44,270
Okay, so we're seeing on bar number 31,
supply is coming in. On bar number 32,

1626
02:07:44,530 --> 02:07:46,470
demand is diminishing.

1627
02:07:46,870 --> 02:07:48,990
Okay, so bar number 33.

1628
02:07:51,790 --> 02:07:54,270
Okay, bar number 33, what happens there?

1629
02:07:58,690 --> 02:08:00,270
Let's talk about the effort.

1630
02:08:00,910 --> 02:08:02,950
to the upside and the result to the
upside.

1631
02:08:03,170 --> 02:08:04,430
What is happening with the effort?

1632
02:08:05,410 --> 02:08:08,990
Slightly higher effort to push the price
up, right?

1633
02:08:11,350 --> 02:08:12,890
Yes. Or maybe the same.

1634
02:08:13,370 --> 02:08:15,530
And then what about the result?

1635
02:08:18,810 --> 02:08:22,690
The result is down.

1636
02:08:23,390 --> 02:08:28,150
Yeah. We are not doing anything.

1637
02:08:29,000 --> 02:08:31,140
with the progress to the upside.

1638
02:08:32,160 --> 02:08:37,960
So therefore, the result is going down.
So on the same effort, instead of a

1639
02:08:37,960 --> 02:08:44,960
better close, that is above the close of
32, the close

1640
02:08:44,960 --> 02:08:46,900
of 33 is to the downside.

1641
02:08:47,260 --> 02:08:48,840
So a negative result.

1642
02:08:49,180 --> 02:08:50,580
So bullish or bearish?

1643
02:08:53,100 --> 02:08:55,300
Bearish. Absolutely bearish.

1644
02:08:55,560 --> 02:08:57,980
And now we're seeing that...

1645
02:08:58,400 --> 02:09:05,120
there is a synchronicity between the
attempts on

1646
02:09:05,120 --> 02:09:11,120
the increased supply signature to go
down, and for the first time, it

1647
02:09:11,120 --> 02:09:12,120
goes down.

1648
02:09:12,160 --> 02:09:19,100
So that synchronicity suggests the
timing for the beginning of the move to

1649
02:09:19,100 --> 02:09:20,100
the downside.

1650
02:09:21,100 --> 02:09:26,560
All right. So we're kind of seeing how
it changed.

1651
02:09:27,750 --> 02:09:30,190
comes so ever gradually.

1652
02:09:32,030 --> 02:09:33,630
Again, let's go through this.

1653
02:09:34,470 --> 02:09:41,090
Increase of the supply on 31, invincible
to amateuristic eyes.

1654
02:09:42,770 --> 02:09:44,790
There's a lot of background noise.

1655
02:09:45,070 --> 02:09:50,290
You're probably close to the microphone
with some of the things that you do

1656
02:09:50,290 --> 02:09:56,670
there. Then on 32, there is a decrease
in the demand signature.

1657
02:09:57,470 --> 02:10:04,310
And then on 33, we are trying to
continue to the upside, and we're seeing

1658
02:10:04,310 --> 02:10:11,270
supply is starting to come in. And then
we see also the result to

1659
02:10:11,270 --> 02:10:12,049
the downside.

1660
02:10:12,050 --> 02:10:17,570
That suggests a synchronicity between
the effort and the result.

1661
02:10:18,450 --> 02:10:23,050
And that suggests a timing for us for
the beginning of the move.

1662
02:10:23,270 --> 02:10:24,450
Okay, great.

1663
02:10:26,240 --> 02:10:28,800
33 will be labeled as how, Rick?

1664
02:10:32,060 --> 02:10:33,260
Buying climax.

1665
02:10:33,600 --> 02:10:40,480
Buying climax. Okay. So then where is
our next Wyckoff point?

1666
02:10:40,640 --> 02:10:44,480
Where is our change of character or
automatic reaction?

1667
02:10:47,200 --> 02:10:51,380
I call the automatic reaction at 35.

1668
02:10:52,000 --> 02:10:54,420
Okay. Okay, so...

1669
02:10:54,750 --> 02:10:55,728
This reaction.

1670
02:10:55,730 --> 02:10:56,730
Secondary.

1671
02:10:57,830 --> 02:11:01,050
Okay, secondary test, somewhere in
between, right?

1672
02:11:02,550 --> 02:11:06,190
Right. Okay. And then phase A.

1673
02:11:06,510 --> 02:11:07,510
Phase A, okay.

1674
02:11:08,070 --> 02:11:10,570
So look at the change of character,
guys.

1675
02:11:11,670 --> 02:11:15,950
This is the distance that we traveled to
the downside.

1676
02:11:16,890 --> 02:11:23,410
Is this, Rick, is this the largest
reaction since we had the low at 1516?

1677
02:11:26,000 --> 02:11:32,120
Yes. Yeah. Something else, kind of
slightly under,

1678
02:11:32,200 --> 02:11:35,960
this is definitely the largest distance.

1679
02:11:36,720 --> 02:11:42,460
So downswing increase that we see.

1680
02:11:42,740 --> 02:11:46,140
Okay, so that suggests, change of
character suggests what?

1681
02:11:48,720 --> 02:11:49,800
Trading range.

1682
02:11:50,270 --> 02:11:51,790
trading range, a change of environment.

1683
02:11:52,110 --> 02:11:56,750
Okay, so now once we're in the trading
range, we want to identify a bias.

1684
02:11:58,250 --> 02:12:00,690
Okay, let's keep this in mind.

1685
02:12:03,210 --> 02:12:08,010
And how would we define the boundaries
of this trading range?

1686
02:12:13,130 --> 02:12:18,930
The high of 33 and the low of 35.

1687
02:12:19,710 --> 02:12:20,710
Okay, great.

1688
02:12:20,790 --> 02:12:25,450
So we defined the resistance and the
support, and we are saying that the

1689
02:12:25,450 --> 02:12:29,710
should, majority of the time,
consolidate between those two points.

1690
02:12:31,230 --> 02:12:35,150
Okay, and we are putting here a phase A.

1691
02:12:35,850 --> 02:12:41,270
All right, let's talk about the buys.
Let's talk about the buys from the point

1692
02:12:41,270 --> 02:12:43,970
of view of the supply. We just started
this today.

1693
02:12:44,250 --> 02:12:47,370
So what can we say about the supply in
phase A?

1694
02:12:54,959 --> 02:12:58,780
there was a supply increase in payday.

1695
02:12:59,200 --> 02:13:04,280
Yeah, and we could even take these two
bars here as well, this one and this

1696
02:13:04,320 --> 02:13:07,960
because we know that there is an
increase of the supply at 31.

1697
02:13:08,920 --> 02:13:15,700
We know that supply is still somewhat
high at 32, just because the

1698
02:13:15,700 --> 02:13:16,820
volume signature is high.

1699
02:13:17,400 --> 02:13:20,520
Okay, and then look at the bars after
that.

1700
02:13:21,330 --> 02:13:25,450
What is the difference? I mean, like,
this is the first time when I see here

1701
02:13:25,450 --> 02:13:32,190
one, two, three, four, five bars in a
row where there is a selling. Have we

1702
02:13:32,190 --> 02:13:33,190
this before?

1703
02:13:35,930 --> 02:13:36,930
No.

1704
02:13:37,830 --> 02:13:38,830
Maybe here.

1705
02:13:39,010 --> 02:13:41,990
First time on this chart. This was just
three days.

1706
02:13:42,570 --> 02:13:45,030
But look at also the volume signature,
right?

1707
02:13:46,670 --> 02:13:51,570
I mean, this is a different type of
supply that comes. This comes at the end

1708
02:13:51,570 --> 02:13:57,010
the move into the climactic action, and
then it produces the move to the upside.

1709
02:13:57,410 --> 02:14:03,630
This supply is different. This comes
after we already had some kind of

1710
02:14:03,630 --> 02:14:10,350
to the upside, so the context is
different, and it's

1711
02:14:10,350 --> 02:14:12,570
much, much harder. It's probably like...

1712
02:14:13,390 --> 02:14:20,330
times two and a half, and it's less one
and a half times more than the

1713
02:14:20,330 --> 02:14:25,490
supply that came at the end of the down
move here to point number six.

1714
02:14:26,370 --> 02:14:28,650
Okay, so what would that suggest?

1715
02:14:30,470 --> 02:14:33,250
I mean, there's a big difference in
supply signature.

1716
02:14:38,030 --> 02:14:43,760
It looks like there's a lot of...
institutional selling and weekend

1717
02:14:44,220 --> 02:14:50,400
Okay. Institutional selling, for sure.
Who would be presenting the market with

1718
02:14:50,400 --> 02:14:56,900
so much supply on these seven bars if we
take 31 and 32 into the same

1719
02:14:56,900 --> 02:15:03,760
area? Yeah. Only institutions would be
selling like this because this selling

1720
02:15:03,760 --> 02:15:05,600
is heavy.

1721
02:15:05,860 --> 02:15:09,460
That's number one. And secondly, it's
consistent.

1722
02:15:12,040 --> 02:15:15,640
So think about these two words. Heavy
selling.

1723
02:15:17,760 --> 02:15:20,120
Heavy defines the institutional
presence.

1724
02:15:20,480 --> 02:15:26,760
And then consistency of how they sell.
For seven days in a row, they sell,

1725
02:15:26,840 --> 02:15:28,480
sell, sell, sell, sell.

1726
02:15:30,140 --> 02:15:36,940
Does this look more like an accumulation
or more like a distribution in the way

1727
02:15:36,940 --> 02:15:37,940
how they sell?

1728
02:15:46,220 --> 02:15:47,220
An accumulation.

1729
02:15:48,620 --> 02:15:50,000
A reaccumulation?

1730
02:15:50,360 --> 02:15:55,160
Okay, so we're talking about
institutional selling. We're talking

1731
02:15:55,160 --> 02:16:02,140
selling. We're talking about consistency
of selling. So not only they're selling

1732
02:16:02,140 --> 02:16:07,480
a lot, they are consistently selling
throughout seven days there.

1733
02:16:10,620 --> 02:16:14,500
We're probably talking more about the
distribution rate, right?

1734
02:16:19,440 --> 02:16:24,940
Oops. So I want to repeat this so that
we would get this correctly.

1735
02:16:25,560 --> 02:16:27,220
Look at the volume signature.

1736
02:16:27,640 --> 02:16:34,459
In this area, this is the volume
signature that has both

1737
02:16:34,459 --> 02:16:40,959
the highest volume spike and that has
the most consistent selling that we have

1738
02:16:40,959 --> 02:16:44,160
seen on this chart.

1739
02:16:44,700 --> 02:16:46,379
We have selling here.

1740
02:16:47,150 --> 02:16:48,590
at number 14.

1741
02:16:48,969 --> 02:16:50,870
This is just one bar selling.

1742
02:16:51,309 --> 02:16:54,370
Remember, we've talked about this today.
What's the difference between

1743
02:16:54,370 --> 02:16:57,370
consistency of selling and then just one
bar selling?

1744
02:16:59,330 --> 02:17:00,450
Well, this is it.

1745
02:17:01,270 --> 02:17:02,549
This is how it looks.

1746
02:17:03,510 --> 02:17:10,170
At 14, we are being sold. 13 as well. So
you can say two bars.

1747
02:17:11,830 --> 02:17:14,990
And then after that, there is

1748
02:17:15,990 --> 02:17:19,290
diminishing selling in this whole
formation.

1749
02:17:21,129 --> 02:17:26,530
At 31, 32, 33, 34, this looks different.

1750
02:17:27,410 --> 02:17:32,910
This looks so much more selling that
comes into the market than at number 13,

1751
02:17:32,969 --> 02:17:33,969
14.

1752
02:17:35,309 --> 02:17:40,889
So we should be thinking that maybe this
is the distribution that is unfolding

1753
02:17:40,889 --> 02:17:43,990
just because phase A looks so different.

1754
02:17:44,639 --> 02:17:48,920
than phase A at number 13, number 14.

1755
02:17:49,840 --> 02:17:55,100
So at this point of time, even though we
are kind of like speculating, we are

1756
02:17:55,100 --> 02:18:01,160
trying to deduct whether this is a
distribution or reaccumulation, we are

1757
02:18:01,160 --> 02:18:03,160
that this is our assumption.

1758
02:18:06,200 --> 02:18:12,760
And this assumption either needs to fail
or we need to confirm it.

1759
02:18:15,660 --> 02:18:21,240
And why is this an assumption? Well,
because there are some other traits that

1760
02:18:21,240 --> 02:18:23,520
are still not distributional traits.

1761
02:18:23,799 --> 02:18:28,879
Rick, what do you think is not being
shown to us here? If this were a

1762
02:18:28,879 --> 02:18:31,620
distribution, what do you think is not
being shown to us?

1763
02:18:33,020 --> 02:18:38,000
I mean, what we would like to see maybe
in phase A for the distribution.

1764
02:18:43,360 --> 02:18:44,360
We've discussed.

1765
02:18:44,559 --> 02:18:48,280
volume so much how about the price what
would the price preferably do

1766
02:18:48,280 --> 02:18:54,540
um

1767
02:18:54,540 --> 02:19:01,520
maybe a little bit more yeah wants to

1768
02:19:01,520 --> 02:19:05,700
go down right now yeah so would be more
aggressive to the downside we still

1769
02:19:05,700 --> 02:19:10,820
don't see that right because uh and i
think that there is a comment here from

1770
02:19:10,820 --> 02:19:17,690
militia um Look at the distance between

1771
02:19:17,690 --> 02:19:18,690
14 and 15.

1772
02:19:18,870 --> 02:19:21,350
Compare that to 33 and 35.

1773
02:19:22,570 --> 02:19:26,650
Kind of looks the same, if not even
smaller, slightly smaller.

1774
02:19:26,870 --> 02:19:33,590
So we still don't have the result to the
downside on this consistency of

1775
02:19:33,590 --> 02:19:35,870
selling and on high, heavy selling.

1776
02:19:36,990 --> 02:19:39,350
So therefore, we are...

1777
02:19:43,150 --> 02:19:50,150
We are expecting a better picture as

1778
02:19:50,150 --> 02:19:53,170
a confirmation of the bias to the
downside.

1779
02:19:53,610 --> 02:19:55,650
So far, it's not there.

1780
02:19:56,490 --> 02:20:03,030
But it definitely catches our eye that
there is so

1781
02:20:03,030 --> 02:20:06,310
much distribution of volume that has
come in it.

1782
02:20:07,350 --> 02:20:12,690
Okay. So now that we have an assumption
on the bias, let's see if we could

1783
02:20:12,690 --> 02:20:18,490
confirm it. You mentioned a couple of
things. You mentioned that the strong

1784
02:20:18,490 --> 02:20:21,970
hands are selling.

1785
02:20:23,770 --> 02:20:29,770
They're selling from 31 to 35.

1786
02:20:31,470 --> 02:20:34,270
And then weak hands are buying.

1787
02:20:37,010 --> 02:20:43,750
basically on the same bars. And we could
see this through the tails

1788
02:20:43,750 --> 02:20:50,730
of all of those bars. If we would build
an intraday picture of this, think

1789
02:20:50,730 --> 02:20:53,470
about this, bar number 31, this is the
close.

1790
02:20:54,150 --> 02:20:57,810
Then the next bar, there is a slight gap
up.

1791
02:20:58,490 --> 02:21:03,950
Most likely there is some kind of
selling just because we had the selling

1792
02:21:03,950 --> 02:21:05,410
the close of bar number 31.

1793
02:21:06,380 --> 02:21:11,600
So we're selling first, then going
higher, closing positively.

1794
02:21:12,460 --> 02:21:14,060
This is 32 close.

1795
02:21:15,220 --> 02:21:17,820
Then we are slightly gapping down.

1796
02:21:18,460 --> 02:21:19,920
And again,

1797
02:21:20,860 --> 02:21:26,520
most likely with the gap down, the first
momentum is to the downside, something

1798
02:21:26,520 --> 02:21:32,660
like this. Then we go up, and then we
are being sold and closing below the

1799
02:21:32,660 --> 02:21:35,260
previous day. So this is 33 close.

1800
02:21:36,710 --> 02:21:40,770
Then think about the next bar, 33 .5.

1801
02:21:41,590 --> 02:21:48,170
So a slight gap down, attempt to go up,

1802
02:21:48,350 --> 02:21:52,730
continuation to the downside, and
attempt to be bought.

1803
02:21:54,370 --> 02:21:59,770
Then the next gap down, and slightly
maybe misrepresenting this.

1804
02:22:00,370 --> 02:22:02,670
Okay, so the next one gap down.

1805
02:22:06,820 --> 02:22:10,420
With the gap down, probably first move
to the downside.

1806
02:22:11,640 --> 02:22:12,920
Attempt to go up.

1807
02:22:13,700 --> 02:22:17,300
And then such a big sell into the close.

1808
02:22:19,520 --> 02:22:21,120
So this is 34.

1809
02:22:22,100 --> 02:22:26,720
And then 35 opens up kind of at the same
level.

1810
02:22:29,710 --> 02:22:34,350
maybe it goes down first, maybe it goes
up first. I don't know exactly here.

1811
02:22:35,470 --> 02:22:40,790
The overnight action does not give me a
lot of indication on the momentum. I

1812
02:22:40,790 --> 02:22:45,970
probably would be thinking maybe just
trying to go up again,

1813
02:22:46,070 --> 02:22:52,570
going down, something like this, maybe
in a slightly different picture.

1814
02:22:52,830 --> 02:22:57,070
But you could see, even from this, this
is our...

1815
02:22:57,500 --> 02:23:04,040
kind of like best guess on the intraday
structure so what do we see here we see

1816
02:23:04,040 --> 02:23:10,820
how there is selling selling selling
selling

1817
02:23:10,820 --> 02:23:17,580
a lot of selling here a lot of selling
here so those

1818
02:23:17,580 --> 02:23:23,500
are institutional selling and then as
you said the weekends are buying so

1819
02:23:23,500 --> 02:23:25,140
they are buying

1820
02:23:29,070 --> 02:23:32,610
They are buying on the way up. There is
some value here.

1821
02:23:33,630 --> 02:23:40,030
Then they are biased somewhere here as
well at the same level.

1822
02:23:41,310 --> 02:23:47,910
And then they are biased again at the
same level. So three attempts to buy

1823
02:23:48,230 --> 02:23:51,310
here, and then here.

1824
02:23:51,570 --> 02:23:57,430
All of them are failing just because the
price after this kind of consolidates

1825
02:23:57,430 --> 02:23:58,430
and goes down.

1826
02:23:59,180 --> 02:24:04,980
And then weak hands are probably trying
to get back in right here.

1827
02:24:06,640 --> 02:24:12,040
So that's the intraday picture. That's
the strong and weak hands, how they're

1828
02:24:12,040 --> 02:24:13,560
interacting at this spot.

1829
02:24:14,300 --> 02:24:19,960
And please notice, once we're done with
this, this is the exchange of shares

1830
02:24:19,960 --> 02:24:25,500
that happens in phase A.

1831
02:24:26,260 --> 02:24:27,940
Then what happens afterwards?

1832
02:24:28,490 --> 02:24:32,270
I mean like going into this area right
here. Nothing, right?

1833
02:24:32,770 --> 02:24:39,190
Because SEAL might have sold and becomes
inactive.

1834
02:24:41,830 --> 02:24:47,810
Weak hands bought and they are inactive
as well.

1835
02:24:49,370 --> 02:24:56,090
And mean reversion trade here is
basically

1836
02:24:56,090 --> 02:24:57,110
off the lows.

1837
02:24:58,480 --> 02:25:03,320
And it's not an extremely deeply
oversold condition, so they might be

1838
02:25:03,320 --> 02:25:08,000
for a much better condition here to
activate this trade.

1839
02:25:09,220 --> 02:25:13,780
So we are going into the period of
inactivity.

1840
02:25:19,000 --> 02:25:25,480
And we're seeing this in this area right
here between 35 and

1841
02:25:25,480 --> 02:25:27,020
35 .5.

1842
02:25:27,950 --> 02:25:29,010
Oh, a mistake here.

1843
02:25:30,230 --> 02:25:31,470
35 from 36.

1844
02:25:31,950 --> 02:25:33,550
Volume signature goes down.

1845
02:25:33,770 --> 02:25:40,750
Okay, so the next thing that should
happen is for us

1846
02:25:40,750 --> 02:25:44,110
to understand, you know, how the trading
range is going to unfold.

1847
02:25:44,350 --> 02:25:50,750
So I'm going to leave you for a second
just to think about this, and I'm going

1848
02:25:50,750 --> 02:25:52,910
to step out for a second for just one
minute.

1849
02:25:53,360 --> 02:25:57,300
I want you to think about what happens
at 36 and 37.

1850
02:25:58,400 --> 02:26:05,140
Who's doing what and what it means for
the trading range and how it should be

1851
02:26:05,140 --> 02:26:09,180
unfolding at this point of time. And
I'll be back in a minute. Thank you,

1852
02:27:20,490 --> 02:27:21,490
Let's do it.

1853
02:28:21,390 --> 02:28:22,570
All right, guys, I'm back.

1854
02:28:23,030 --> 02:28:29,510
Thank you for that. I just had to get
that package. All right. So

1855
02:28:29,510 --> 02:28:35,990
what are we seeing here, Rick, with 36,

1856
02:28:36,570 --> 02:28:38,130
bar number 36?

1857
02:28:44,090 --> 02:28:50,970
Got a pretty large volume.

1858
02:28:51,390 --> 02:28:56,490
and uh very pretty good spread okay so
effort is doing what

1859
02:28:56,490 --> 02:29:03,190
effort is increasing increasing and it's
increasing

1860
02:29:03,190 --> 02:29:09,490
substantially right so it's increasing
over this bar over this bar this bar

1861
02:29:09,490 --> 02:29:15,790
bar any up bars since 33 this is the
largest spread this is the largest

1862
02:29:15,790 --> 02:29:17,370
so both results

1863
02:29:19,590 --> 02:29:21,930
and effort increase. Bullish or bearish?

1864
02:29:25,790 --> 02:29:28,690
Bullish. Bullish. Definitely bullish.
Short -term bullish.

1865
02:29:29,190 --> 02:29:32,470
Now, what was the intention behind this
bar, by the way?

1866
02:29:41,190 --> 02:29:45,310
Probably to overcome the

1867
02:29:45,310 --> 02:29:48,450
high

1868
02:29:49,240 --> 02:29:53,320
Is there between the two 35 bars?

1869
02:29:53,600 --> 02:29:55,600
Yeah, the two 35 bars. Unbelievable.

1870
02:29:56,020 --> 02:29:58,140
Yeah, right there.

1871
02:29:59,280 --> 02:30:01,080
Yeah, did it do that?

1872
02:30:03,300 --> 02:30:04,660
No. No.

1873
02:30:05,720 --> 02:30:07,800
Say again?

1874
02:30:10,180 --> 02:30:11,180
No,

1875
02:30:12,580 --> 02:30:17,380
it just touched it, but it didn't. It
closed below it. Yeah, the close is

1876
02:30:17,380 --> 02:30:22,980
here. The close is below that level of
intermediate resistance,

1877
02:30:23,320 --> 02:30:28,740
the level of commitment that we wanted
to see from this bar. Just think about

1878
02:30:28,740 --> 02:30:29,739
the effort.

1879
02:30:29,740 --> 02:30:33,800
It's one of the highest efforts on the
chart, historically.

1880
02:30:34,400 --> 02:30:41,360
And that was the intent, to overcome
this resistance by an

1881
02:30:41,360 --> 02:30:46,780
intention by the price, not by the CEO,
not by the CEO, but nobody.

1882
02:30:47,310 --> 02:30:51,850
It's just we're saying that the price,
the intention of the price was to commit

1883
02:30:51,850 --> 02:30:54,190
about this level and it didn't.

1884
02:30:54,790 --> 02:31:01,550
So even though we have a bullish
interpretation on the

1885
02:31:01,550 --> 02:31:07,850
result and effort, we have a negative
interpretation on the intention, which

1886
02:31:07,850 --> 02:31:13,030
puts us in a doubtful situation that
this is going to be a good rally.

1887
02:31:13,370 --> 02:31:16,290
Okay, well then bar number 37 comes.

1888
02:31:17,770 --> 02:31:19,570
So that's number 36.

1889
02:31:20,550 --> 02:31:23,450
So 37 comes, and what do we see there?

1890
02:31:24,410 --> 02:31:26,070
What is happening with effort?

1891
02:31:29,790 --> 02:31:31,210
Effort is decreasing.

1892
02:31:31,590 --> 02:31:32,750
Decreasing, substantially.

1893
02:31:33,230 --> 02:31:35,830
And then what is happening with the
result to the upside?

1894
02:31:39,910 --> 02:31:42,690
And the result is decreasing.

1895
02:31:44,350 --> 02:31:49,630
Substantially. So decreasing effort,
Decreasing result, bullish or bearish?

1896
02:31:51,510 --> 02:31:52,730
Bearish. Bearish.

1897
02:31:54,870 --> 02:31:56,890
Okay, so short -term bearish.

1898
02:31:57,710 --> 02:32:04,490
Now, let's think about what is happening
here on

1899
02:32:04,490 --> 02:32:05,530
bar number 31.

1900
02:32:05,790 --> 02:32:11,990
Let's kind of build those analogs. And
32, and bar number 36, and 37.

1901
02:32:12,750 --> 02:32:14,730
Do they look the same to you, Rick?

1902
02:32:18,480 --> 02:32:25,300
And you have to compare the structure of
the spread, the closes, and then

1903
02:32:25,300 --> 02:32:26,600
look at the volume signature.

1904
02:32:27,760 --> 02:32:33,240
Think about in the context of what the
price is trying to do there. In both

1905
02:32:33,240 --> 02:32:36,340
cases, tries to commit to the upside,
right?

1906
02:32:38,200 --> 02:32:42,440
Yes. So in the first case, we do commit
to the upside. In the second case, we

1907
02:32:42,440 --> 02:32:43,600
don't commit to the upside.

1908
02:32:43,960 --> 02:32:50,740
But price structure -wise, volume -wise,
it looks somewhat the same. We have

1909
02:32:50,740 --> 02:32:57,060
bar number one that has this momentum
characteristic, and it happens on the

1910
02:32:57,060 --> 02:32:58,740
increased volume signature.

1911
02:32:59,240 --> 02:33:05,840
Bar number two shows diminishing
qualities of this effort

1912
02:33:05,840 --> 02:33:12,420
to push the price higher, and the volume
starts to diminish as well.

1913
02:33:12,780 --> 02:33:16,380
So the same price and volume structure.

1914
02:33:16,990 --> 02:33:23,830
the same signatures. The only problem
here is that in the second case, we are

1915
02:33:23,830 --> 02:33:25,510
not committing above the resistance.

1916
02:33:25,870 --> 02:33:32,830
In the first case, there is a clear
commitment above the area of the

1917
02:33:33,010 --> 02:33:35,910
and it's a substantial commitment to the
upside.

1918
02:33:36,230 --> 02:33:43,110
In the second case, we are really not
committing above the resistance that

1919
02:33:43,110 --> 02:33:45,910
we need to. There is no clear path for
us.

1920
02:33:46,570 --> 02:33:48,410
So Rick, what do you think this means?

1921
02:33:51,290 --> 02:33:53,310
It looks bearish.

1922
02:33:53,530 --> 02:33:54,890
It looks bearish.

1923
02:33:55,210 --> 02:34:02,190
Because the effort to the upside between
these two analogs is

1924
02:34:02,190 --> 02:34:03,650
definitely diminishing.

1925
02:34:04,530 --> 02:34:10,690
The intention is not being fulfilled

1926
02:34:10,690 --> 02:34:13,070
in the second case.

1927
02:34:13,390 --> 02:34:18,330
And we're seeing that And that just
basically tells us that the result to

1928
02:34:18,330 --> 02:34:19,810
upside is also diminution.

1929
02:34:20,010 --> 02:34:23,750
So, diminution effort with no result.

1930
02:34:24,110 --> 02:34:25,150
Bullish or bearish?

1931
02:34:28,450 --> 02:34:29,650
Bearish. Bearish.

1932
02:34:30,410 --> 02:34:33,950
Now, one more point and then we'll make
our final conclusion.

1933
02:34:34,310 --> 02:34:38,350
So, this one's short -term bearish.
Well, actually, not just short -term.

1934
02:34:38,350 --> 02:34:43,730
know, for this whole structure, this is
bearish because of these two attempts to

1935
02:34:43,730 --> 02:34:44,429
go up.

1936
02:34:44,430 --> 02:34:47,280
Now, Let's think about selling itself.

1937
02:34:48,380 --> 02:34:55,380
So we said that they sold on 31, they
sold on 32, they sold on 33, they sold

1938
02:34:55,380 --> 02:34:56,960
34, and on 35.

1939
02:34:57,300 --> 02:35:03,240
All of this has been selling by
institutions.

1940
02:35:03,720 --> 02:35:07,360
What do you think they are doing here at
36 and 37?

1941
02:35:14,600 --> 02:35:15,620
They're inactive.

1942
02:35:16,680 --> 02:35:21,380
They were inactive between 35 and 36.
Then the volume signature has increased.

1943
02:35:21,640 --> 02:35:23,420
So they are not inactive anymore.

1944
02:35:23,740 --> 02:35:26,520
They're doing something. So we're trying
to define 36.

1945
02:35:26,900 --> 02:35:28,420
What is it that they are doing?

1946
02:35:29,180 --> 02:35:30,440
Think about the intention.

1947
02:35:31,320 --> 02:35:36,440
The price needed to commute the box, but
it didn't. So therefore... They're

1948
02:35:36,440 --> 02:35:39,960
selling. Yeah, they're selling again.
But they're selling less.

1949
02:35:41,280 --> 02:35:46,670
So... This is the situation where they
sold initially and then they don't have

1950
02:35:46,670 --> 02:35:53,430
to sell as much in the second case to
produce the result

1951
02:35:53,430 --> 02:35:54,530
of failure.

1952
02:35:55,610 --> 02:36:01,130
And that kind of gives us an idea that
also about the demand. If they don't

1953
02:36:01,130 --> 02:36:06,090
to sell so much, then this suggests that
demand is becoming poor.

1954
02:36:07,290 --> 02:36:08,530
Demand is decreasing.

1955
02:36:09,470 --> 02:36:12,980
So with this, Look at the next bar.

1956
02:36:14,560 --> 02:36:16,900
The next bar, let's call this 38.

1957
02:36:17,300 --> 02:36:18,660
Let's not call it 35.

1958
02:36:19,960 --> 02:36:26,480
So the next bar, bar number 38, the
spread is

1959
02:36:26,480 --> 02:36:28,220
increasing.

1960
02:36:28,960 --> 02:36:34,740
Yes, the close is very favorable to the
downside as well, and yet the volume

1961
02:36:34,740 --> 02:36:38,140
signature is going down, and we're
committing below the loss.

1962
02:36:38,520 --> 02:36:43,280
bar number 37, and we're committing
below one half of bar number 36.

1963
02:36:43,680 --> 02:36:45,880
So this is the commitment to the
downside.

1964
02:36:52,460 --> 02:36:59,460
So with this commitment to the downside,
and with the poor demand,

1965
02:36:59,840 --> 02:37:04,860
commitment to the downside on decreasing
volume signature,

1966
02:37:05,800 --> 02:37:07,160
This is an ease of movement.

1967
02:37:07,380 --> 02:37:09,440
This is what Drake said, ease of
movement.

1968
02:37:11,340 --> 02:37:18,320
And this ease of movement suggests that
we're kind of done with selling.

1969
02:37:18,440 --> 02:37:19,440
That's number one.

1970
02:37:22,160 --> 02:37:25,340
Done with selling, at least for now.

1971
02:37:26,280 --> 02:37:32,400
And then secondly is that demand is
poor, and that suggests that demand is

1972
02:37:32,400 --> 02:37:33,400
weak hands.

1973
02:37:34,380 --> 02:37:40,040
And that demand signature also suggests
some kind of timing, that it might

1974
02:37:40,040 --> 02:37:43,040
happen now. It doesn't have to happen
later.

1975
02:37:43,640 --> 02:37:48,140
So at least at the minimum, we would be
thinking that this ease of movement

1976
02:37:48,140 --> 02:37:51,080
should produce maybe a lower low here.

1977
02:37:51,380 --> 02:37:57,860
And if it's going to produce a lower
low, then could we be

1978
02:37:57,860 --> 02:38:01,580
either in like extended trading range
like this?

1979
02:38:02,400 --> 02:38:04,520
or could we just go down here?

1980
02:38:05,960 --> 02:38:10,560
So we'll just have to see what's going
to come next, you know, how we could

1981
02:38:10,560 --> 02:38:15,760
confirm all of this. By the way, could
we think of this trading range as like a

1982
02:38:15,760 --> 02:38:18,680
concluded trading range for us? What do
you think, Rick?

1983
02:38:22,060 --> 02:38:24,700
Or should we have more duration to the
range?

1984
02:38:28,780 --> 02:38:31,140
Looks like there's going to be a little
more duration.

1985
02:38:33,520 --> 02:38:39,680
But think about this. They sold here,
right? So selling was increasing a lot,

1986
02:38:39,820 --> 02:38:46,120
and then selling is going down, and yet
the result to the downside is

1987
02:38:46,120 --> 02:38:50,240
increasing, suggesting an ease of
movement, ease of movement by itself,

1988
02:38:50,460 --> 02:38:56,520
suggesting that demand is low, and
therefore the timing of maybe now.

1989
02:38:57,100 --> 02:38:59,800
All right, well, why not just...

1990
02:39:00,110 --> 02:39:04,230
look at this what has happened next so
let's just see and then we could just

1991
02:39:04,230 --> 02:39:10,770
comment on that okay so that that's what
happens next and

1992
02:39:10,770 --> 02:39:15,470
we see how the downtrend develops from
37 to 40.

1993
02:39:15,910 --> 02:39:21,830
um if we are thinking that the trading
range needs to develop here

1994
02:39:21,830 --> 02:39:28,690
we might miss this trade but you cannot
miss the exit

1995
02:39:29,930 --> 02:39:35,790
on the trade that we were in, right? So
if we were thinking that we were biased

1996
02:39:35,790 --> 02:39:42,230
here and then we were biased again here,
here, somewhere here,

1997
02:39:42,530 --> 02:39:46,490
then we are definitely sellers on this
bar.

1998
02:39:47,010 --> 02:39:49,990
This is our capitulation bar.

1999
02:39:50,450 --> 02:39:57,050
This is the latest bar that we could
possibly identify where we're gonna say

2000
02:39:57,050 --> 02:39:58,050
that that's it.

2001
02:39:58,240 --> 02:40:00,720
The trend is done. There is a break of
the trend.

2002
02:40:02,080 --> 02:40:03,320
And we are out.

2003
02:40:04,880 --> 02:40:10,200
Now, we should be out much earlier. This
is the last

2004
02:40:10,200 --> 02:40:13,540
exit for us.

2005
02:40:14,040 --> 02:40:16,300
And we're kind of back engineering this.

2006
02:40:17,060 --> 02:40:22,300
Our first exit should be in the area of
31, 32, 33.

2007
02:40:24,180 --> 02:40:26,040
And this is what we're going to call

2008
02:40:27,150 --> 02:40:33,070
our Wyckoff exit because we're going to
discuss other exits as well.

2009
02:40:34,630 --> 02:40:39,850
So our Wyckoff exit. Then the next exit
is going to be after the change of

2010
02:40:39,850 --> 02:40:45,090
character on the way up into the
secondary test.

2011
02:40:45,470 --> 02:40:49,230
So we want to exit some way here. This
is our second exit.

2012
02:40:49,870 --> 02:40:54,010
Our third exit is going to be on the
reversal.

2013
02:40:54,870 --> 02:41:01,530
of the last attempt to go up, number
three, and this is our number four exit.

2014
02:41:01,970 --> 02:41:06,550
So as you could see, this is how we
would be scaling out, out of the

2015
02:41:06,790 --> 02:41:13,130
We don't necessarily need to close the
position right away. We could wait out

2016
02:41:13,130 --> 02:41:17,070
and see, you know, what kind of change
of character we're going to see, and

2017
02:41:17,070 --> 02:41:23,150
we've seen that the change of character
here is not that decisive in terms of

2018
02:41:23,150 --> 02:41:24,150
the result.

2019
02:41:24,490 --> 02:41:30,850
we could be thinking there might be a
reaccumulation here. The only clue is in

2020
02:41:30,850 --> 02:41:34,270
the volume signature, at least at that
point.

2021
02:41:34,850 --> 02:41:41,370
And then as we go into 37, then we're
seeing how there is another

2022
02:41:41,370 --> 02:41:45,250
failure, and at least this failure
suggests a lower low.

2023
02:41:45,550 --> 02:41:49,770
So a big question, a tactical question
for us, if we're going to have a lower

2024
02:41:49,770 --> 02:41:51,190
low than 35,

2025
02:41:52,220 --> 02:41:54,280
what's going to be done with the trend.

2026
02:41:54,520 --> 02:41:56,400
And most likely, it's going to be
broken.

2027
02:41:57,200 --> 02:42:03,660
So if the trend breaks, what kind of
reaction we're going to have to the

2028
02:42:03,660 --> 02:42:04,619
of the trend?

2029
02:42:04,620 --> 02:42:10,180
Most likely, we're going to have some
kind of further capitulation that's

2030
02:42:10,180 --> 02:42:13,020
to lead to an established downtrend.

2031
02:42:13,660 --> 02:42:19,940
So we want to get out somewhere here and
the latest here.

2032
02:42:21,260 --> 02:42:24,160
All right. All right, guys. Rick, thank
you so much.

2033
02:42:25,740 --> 02:42:26,820
Okay, thank you.

2034
02:42:28,000 --> 02:42:33,800
Good job. And just let me quickly look
at some comments.

2035
02:42:38,200 --> 02:42:42,500
Are supply signature schematics that we
studied earlier applicable to

2036
02:42:42,500 --> 02:42:44,280
reaccumulation? Yes.

2037
02:42:44,540 --> 02:42:46,040
Yes, absolutely.

2038
02:42:46,480 --> 02:42:47,820
Okay, so homework.

2039
02:42:48,540 --> 02:42:50,440
Homework is going to be to...

2040
02:42:50,970 --> 02:42:57,190
Look into this area, analyze it, and
then come to the next class with the

2041
02:42:57,190 --> 02:43:00,590
analysis of all of these points up to
57.

2042
02:43:01,930 --> 02:43:06,250
You have to analyze each bar, you have
to analyze each swing, and you have to

2043
02:43:06,250 --> 02:43:13,150
give me a conclusion as to what kind of
next move we could expect from here.

2044
02:43:14,890 --> 02:43:18,770
That's assignment number one. Assignment
number two is always...

2045
02:43:19,070 --> 02:43:24,090
Watch this recording again, specifically
with the exercise.

2046
02:43:24,530 --> 02:43:31,230
And this is exactly what I want. I want
that exercise to go into your notes.

2047
02:43:31,710 --> 02:43:35,930
And send those to me. Email those to me.

2048
02:43:36,270 --> 02:43:37,270
All right.

2049
02:43:37,290 --> 02:43:41,870
I think that's it for today. Let's see
what else.

2050
02:43:48,710 --> 02:43:52,290
Eric is saying, what about the upsloping
channel?

2051
02:43:53,130 --> 02:43:57,630
You did draw the 34 seems like an
upthrust in the distribution.

2052
02:43:58,350 --> 02:44:00,030
Okay, so we're talking about this?

2053
02:44:03,730 --> 02:44:09,430
Yeah, so it's not necessarily an
upthrust of the distribution, right?

2054
02:44:09,430 --> 02:44:11,430
it's actually a stop in action.

2055
02:44:12,480 --> 02:44:18,760
So this is more a stop in action that
defines an overbought, overthrowing

2056
02:44:18,760 --> 02:44:23,800
condition and therefore suggests that
this is a buying climax as a stop in

2057
02:44:23,800 --> 02:44:24,800
action.

2058
02:44:25,180 --> 02:44:32,080
What we didn't talk about with RIG is
when we look at this trading range, look

2059
02:44:32,080 --> 02:44:39,000
at these two rallies and think about the
definition of a first

2060
02:44:39,000 --> 02:44:40,000
point of excitement.

2061
02:44:44,140 --> 02:44:46,280
and then a second point of excitement.

2062
02:44:50,820 --> 02:44:54,860
And usually the second point of
excitement is going to come where?

2063
02:44:55,080 --> 02:45:00,660
It's going to come in phase C, either on
upthrust of the distribution or on an

2064
02:45:00,660 --> 02:45:04,720
attempt to upthrust.

2065
02:45:05,320 --> 02:45:11,680
So you could see that there was an
attempt here at 36 .37 to commit above.

2066
02:45:12,250 --> 02:45:16,610
to produce an upthrust, and yet it
failed.

2067
02:45:16,970 --> 02:45:23,650
And the failure of the upthrust, which
basically leads us to the conclusion,

2068
02:45:23,650 --> 02:45:30,350
that we see the whole thing, that this
was phase C, and this becomes

2069
02:45:30,350 --> 02:45:35,550
a low or high LPSY, last point of
supply.

2070
02:45:35,850 --> 02:45:39,470
And then we're a little bit puzzled as
to how...

2071
02:45:40,000 --> 02:45:46,340
to label this whole thing. So as we've
noticed, there were quite a few attempts

2072
02:45:46,340 --> 02:45:49,520
to go up here. So here are your
secondary tests.

2073
02:45:50,160 --> 02:45:56,980
So this could be your phase A, phase B,
phase C, then phase

2074
02:45:56,980 --> 02:46:01,020
D, right here, sign of weakness, LPSY.

2075
02:46:02,540 --> 02:46:06,720
And then off we go into phase E, the
downtrend.

2076
02:46:08,140 --> 02:46:09,960
All right, so that would be the
labeling.

2077
02:46:11,380 --> 02:46:16,900
In terms of the slope, we would be
putting the slope actually down like

2078
02:46:16,900 --> 02:46:23,340
here, and then we would be looking at
this sign of weakness and LPSY here, and

2079
02:46:23,340 --> 02:46:25,920
look at how it comes exactly to this
point.

2080
02:46:27,080 --> 02:46:31,040
So it would be more of the down slope
here rather than an up slope.

2081
02:46:31,740 --> 02:46:33,680
All right, guys, good class.

2082
02:46:34,880 --> 02:46:36,220
Again, I'm glad that...

2083
02:46:36,460 --> 02:46:41,160
We are moving alone both with the
material on the volume. We have all

2084
02:46:41,160 --> 02:46:46,960
lectures, type of hours, and then we

2085
02:46:46,960 --> 02:46:53,500
exercise. We go into our drill exercise,
and we are trying to

2086
02:46:53,500 --> 02:46:57,640
repeat the same process over and over
and over again.

2087
02:46:57,860 --> 02:47:01,900
So next class, do your homework, and
let's see what's going to happen next.

2088
02:47:02,200 --> 02:47:05,820
All right, guys, thank you so much, and
have a happy week.

2089
02:47:06,220 --> 02:47:07,220
Thank you guys. Bye -bye.