All language subtitles for Session 6

Hello, everyone. Today is October 15th,
and this is our session number six of

the WICA practical course.

I thought that all of the sessions so
far kind of had a very positive

feedback.

Maybe we have missed some of the
material here and there, but except for

feel like um all of the feedback was
really positive so we'll we'll try to

some of the uh some of the material that
you guys are interested just you know

keep reminding me please uh just because
a lot is going into the one class as

you could see i mean like each class has
maybe like what 30 not 20 slides at

least or something like this

So I could definitely include some of
the material, just need a reminder.

Okay, today, bias game as usual, anatomy
of the trade.

We have kind of like a dilemma there, so
let's solve it.

Q &As, we have a bunch today.

Market update, I thought that, you know,
let's just go through that as well.

We're going to continue our discussion
on effort versus results, specifically

the concept of synchronicity.

And with that, we are going to do a
quick exercise there on bias.

And then we're going to continue our
action sequence exercise as well.

As usual, all of our classes are for
educational purposes.

All right, well, let's go into the bias
game. I actually was not.

that disappointed with your results,
guys.

And the reason why is because this was a
tough one.

This was probably one of those where

you see both, and I think one of you in
your emails wrote this,

or something to this regard, where the
volume signature goes down and both

supply and demand goes down as well.

and you kind of have this structure that
looks like a horizontal reaccumulation,

but then it means completely opposite
thing.

So I want to know what was the
difficulty except for that, and I wonder

guys could maybe write it down really
quickly and tell me what were the issues

with this chart working with this.

And I'm giving you right away the
definition, you know, of the downside

distribution.

I just want to approach this maybe from
a slightly different perspective. And

maybe we could have a discussion here.
Maybe somebody wants to step in and just

say, like, okay, I thought that this was
this.

And then let's look into how is it that,
you know, we could observe it in a

different way or give it a different
meaning.

So let me know quickly, and while you're
thinking, guys, here. So a couple of

interesting spots here.

When we have the supply coming in on the
change of character, it kind of

gives out a clue on the next sign of
weakness right here, this whole area.

At least I thought that that was a
little bit of a giveaway.

are early on in the trading ranges to
what kind of buys we're going to have.

It comes on a lot of supply.

It stays very heavy relative to the
previous averages.

And then it increases again once the
price goes down.

So usually we would like to see the
deterioration of selling.

Like we're seeing it, let's say, from
here to here to here.

And we could see first acceleration and
then

de -acceleration of the supply
signature.

Something like this.

So that would suggest some kind of
rally.

Rally fails here, so whatever demand
comes in,

it's probably still has capacity to lift
the price, but this Higher than

average volume signature probably
suggests that supply is there.

And if supply is heavy, then we're going
to have another reaction and it comes

on increased volume signature. So this
action right here is a little bit more

complex and suggests that supply is
available and there was a lot of

After that, that's when you kind of...

have to take this maybe as a guidance,
right? So why is it so much supply

here?

Substantial increase of the supply.

And there is a progression to the
downside with the lower law right here.

So if you would be thinking that the
buyers for you tentatively

And that's kind of like my message to
you, more advanced Wyckoffians.

You have to create some kind of
hypothesis as to what bias this is by

the chart, price, volume, momentum,
sentiment,

duration.

And as you form this hypothesis, you
really should not care what this

is.

Because the market truly will tell you
whether this hypothesis is right or it's

wrong.

And in both cases, whether it's right or
your hypothesis is right or wrong, you

can still initiate the position.

Because on the failed signal, this is
the signal that in technical analysis is

one of the best signals. When you
thought one thing was showing...

and then it turned out to be a
completely different thing.

So we'll talk about this a little bit
more.

Okay,

I forgot what I wanted to write down
here.

Okay, so after this increase of the
supply, what do we have? Kind of that

of inactivity where the rally does not
have a lot of volume signature.

So something has happened here, and then
they

just went away, and they became
inactive.

What did they do here? What is it in the
price that we see? Well, quite a lot of

selling waves, and obviously the volume
shows that supply

signature. We also could judge that...

By not overcoming previous support,
which is the preliminary supply here,

that much, it suggested that we're going
to have a rally. It suggested that we

might still consolidate.

It suggested that there is still some
demand at this place as well. So that

demand observed whatever possible supply
was available, and there is no more

demand to push the price up. So price
kind of drifts up.

It's more of a technical rally that we
are observing.

And technical rally always is going to
be associated with the weak hands

volume signature.

Kind of like this. The lower volume
signature dull and the movement is going

be not with a lot of momentum. So you
could see in the spread even how, except

for maybe... couple of bars, everything
else is kind of like small movements,

small movements.

Well, if we miss this, then definitely
this probably should catch our

attention.

And in which way, by the way? Well, we
definitely see down spread

increase.

We have big spreads to the downside.

We see that velocity has increased,
momentum increased to the downside,

volatility in general increased.

And we also see that this is the largest
reaction.

It's bigger than the one from the bind
climax.

The largest reaction.

It also had an intent to commit to the
downside, didn't really do that, we're

still on this line right here, but it
definitely tried.

It tried to do so on smaller volume,
relative to what we've seen, let's say

or here.

So smaller effort.

And we quickly go to the same price
level to the same support.

So some kind of ease of movement in the
way how price moves to the downside

requires less effort.

But yet everything is so aggressive. So
you're still thinking here probably

bearish. Or if you haven't seen this
before, then this should be a little bit

a concern.

Because of how the price moves really
quickly through the trading range.

The test suggests a rally.

And now here is a great opportunity for
us to judge the rally against its

previous predecessor, this rally right
here.

And we could see that both rallies have
the same characteristics.

We see that the volume signature is
extremely low. It's even lower on the

rally. We see that the price spread to
the upside, those momentum bars, are

decreasing in size.

So that suggests that there is not a lot
of buying.

And if we see an occasional volume
signature increase,

you know, it doesn't produce big
momentum bars.

So that buying is of poor quality. That
buying is not of the aggressive

institutional quality.

And we kind of anticipate that we're
going to have a lower high.

If this is a lower high, then we're
going to have a higher high as an

a change of character.

in a big decline, a lower high on
diminishing volume

characteristics, it's probably showing
us that the demand is of such poor

quality that the price is just going to
start drifting down, and it does.

But not only that, the price also
increases supply characteristics on the

down. So that gives us, again, this idea
of the ease of movement.

where maybe supply does not increase so
much, but the price still moves to the

downside. Last rally has minimal demand
behind it, and just on the

definition of the demand presence and
how this demand

diminishes throughout these rallies, you
can build a case for the distribution.

I want to reiterate something and then
we'll go to questions.

I was thinking a lot and kind of, you
know, deeply about what would be the

easiest way for students to go through
the

bias game.

I mean, what is that algorithm as to how
we define the bias and how that

bias changes?

And I think I'm very close to that
definition. And usually, guys, you kind

help me out. When I throw out some
ideas, you come back to me. You give me

other ideas, you know, suggestions and
so on and so forth. So I'm sure we're

going to find a solution here.

Here is what I'm alluding to.

I think that the main thing in the
Wyckoff story, and that's kind

of very interesting how we chose this
name, Wyckoff story.

we're kind of saying that there is a
story that is unfolding. A story is

unfolding. So through this unfolding of
a Wyckoff story, we want to see the

changes and we want to change our bias
with those changes.

So we were in the uptrend here first.

It's a very easy bias for us to
identify.

And then we see how the character of the
next reaction

changes the bias for us, and now it's to
the downside.

The rally really confirms more of a
bearish bias than a bullish bias.

The next reaction still confirms a
bearish bias.

Test suggests a rally, but rally itself
still confirms a bearish bias.

Reaction confirms the bearish bias.

and then the rally confirms the bearish
bias, and we are going into the trend or

the downtrend with the confirmed story.

And sometimes that story could change
really quickly from

one structure to another or mini
structure

in the trading range. But if you would
follow that story from one swing to

another,

then you should logically come to the
conclusion on the bias by the end of

And I think that that's what kind of
like I'm alluding to when I'm saying

maybe this would be the best way to go
about defining the bias. And you could

through the story multiple times.
Sometimes I want to look only at the

and I'm saying, okay, I'm going to
compare this rally to this rally to this

rally and then to this rally.

Then I'm going to compare.

only supply, and I'm going to compare
all of these reactions that they have.

Then I'm going to look at the whole
formation, and I'm going to look at the

structure, and I'm going to try to
define where my phases are, and just

try to figure out also structurally
maybe some scenarios are not

materializing. So for instance, maybe I
was thinking that this is phase C. Well,

after phase C, we should have a sign of
strength and this doesn't look like a

sign of strength by the character nor by
the result of it and so on so forth

all right let's look at some questions

simon

i'm great grateful that you could be
here in this in this class i know that

can't attend this session so We'll try
to answer as many of your questions as

possible. The low, low where you have
secondary test labeled.

Low, low secondary test.

Is it this chart right here, Simon?

Or was it a different chart?

This low, low right here?

Yes, okay.

The low, low, how do we not mistake this
for accumulation buying

at the bottom of the trading range
support price at the low, low?

Yeah, and the same here, by the way,
right?

Here is that thing. Remember, we were
going through this synchronicity, right?

So we were saying as the price goes up,
there is this force.

in the increased selling that comes and
produces stopping action.

And then after this, because this is
kind of like a

big energy event,

both of the forces are exhausted, so
we're gonna see that both supply and

are gonna diminish.

in their signatures.

And it's usually because of the
diminished supply characteristic that

we're going to have some kind of mini or
substructure,

however you want to call this.

And this mini structure is going to have
elements that are going to be

reaccumulation type of elements.

What are those?

Higher lows, sometimes higher highs.

And then we are going to see how the
volatility is going to diminish. Because

that decrease of volatility and the stop

in action, we're going to have some kind
of rally. Another way of thinking about

this is think about big institutions.

They're getting out of the positions.
What do they do?

Sell, sell,

sell, sell, sell, sell, sell, sell,
sell, sell

again, sell again, stop selling.

That's when they stop selling, this
happens.

And then if they stop selling in the
stock that was moving with a lot of

momentum and was the outperformer,

A lot of this is going to materialize in
an attempt to continue the uptrend.

And that's what we're seeing in that
rally.

And that's how the whole distribution is
unfolding. It's not necessarily going

to unfold on one bar or on two bars.

in a very quick phase. It's gonna take
some time for them to get rid of their

positions.

Where do they sell again?

Where do they start selling again?

Well, they're selling a little bit here
at the resistance, very natural spot for

mean reversion trades, for short selling
trades, and so on and so forth.

And then they're selling really heavily
into this rally.

And then on the way down.

And then again, somebody's picking up
the value, short term value.

And then after that, where do they sail
again? They come as they start sailing

somewhere here.

And all of this kind of like on the way
down.

And then late institutional capitulation
happens here. You could see that from

the volume signature.

So these are the institutions that are
giving up at the last

cliffhanger moment.

They see that the performance is
starting to deteriorate.

And in this particular case, utilities
were outperforming the market for

quite some time in 2007 and then in 2008
as well.

It was the whole market they started to
capitulate.

And they are starting to capitulate into
the climax of the market.

So kind of like an overall deterioration
of the market, even utilities can't

escape. All right, guys, what else?

Other questions.

I was thinking the change of character
came in phase B before the minus sign of

weakness.

I can see it does look somewhat
different after the buying climax,

are including the volume and supply
increase after the buying climax is also

part of the change of character as well.

Okay, so Sharon is saying, Sharon, I
think that you're basically saying that

this looked like a change of character,
right?

The big reaction in the middle.

rather than the one before, and would
that mean that you would be thinking

this is a buying climax right here, and
this whole thing here is distribution?

Is that how, yeah, okay, yes, okay,
great.

I actually think that this is a very
valid point.

And I would naturally go with this
because sometimes we have those things

we're going to have a climactic run,
then we're going to have this

distributional type where bind climax
and upthrust are kind of going to match

little bit in where they happen and how
they happen. So I kind of see it here.

And usually this distribution would be
more...

for a potential reaccumulation and kind
of like a continuation to the upside.

Here, this is slightly different because
we could see that in this structure,

there is a lot of selling.

So that's why we have to combine these
two together because

it kind of shows us where this selling
happens.

And it happens not at the same time,
just gradually with time.

And we have to go through all of those
swings.

And the hardest part of it is just to
make sure that we

see how the swing ends and we see how
the swing begins.

And we'll talk about the significant
bars today again. So that's going to be

important for us.

Okay, another question. How do we not
get confused with rally?

with the increased effort versus a
rally, which is the ease of movement.

Okay, well, which rally was what we're
talking about? Probably this one, right?

So we're talking about a rally.

Well, I would say probably we usually,
Simon, would be thinking about the rally

that would have diminished volume
characteristics, right? Or let's say

diminishing demand.

Or we're going to be talking about the
ease of movement, a rally that would

the same characteristics, right? So that
rally also would have the

characteristics of the volume decrease
and with that demand decrease.

I think that's the question, right?

So the very simplistic answer to this is
this.

Always think of the ease of movement as
an

action that expands the result.

Where there is some kind of commitment
and that result is being shown through

this commitment.

So we could have, for instance, a rally.

If this rally right here would stay
above the resistance and would show the

commitment to be above that resistance,
then we would say that this volume

signature was an ease of movement.

But it fails in the upthrust manner.

And that's kind of like the logic of it.

So when we look into this rally right
here and...

the volume is diminishing we cannot say
that this is an ease of movement rally

because it doesn't do really in anything
uh except for maybe like a temporary

commitment above this high right here
but on this sloping range it doesn't

do that it doesn't commit above the the
actual slope so

therefore there is no commitment

there is no ease of movement and this is
more of the weak hands uh poor demand

and that's the big difference so

hopefully guys you know you'll remember
this

Would it be fair to say that the ease of
movement would need an initial energy

effort to start the trend with an ease
of movement continuing path based on its

existing momentum?

That's an interesting question. Usually,
you know, each movement is going to be

associated with something, right, with
some kind of technical catalyst. For

instance, there is some buying.

that observes the supply and the price
starts to go up.

And even though, let's say, we might be
talking about this rally because this is

the rally that produces this
conversation, so a smaller volume

look what has happened before.

There is still absorption here.

It's absorption by weak hands, but still
it's an absorption.

So there is something that...

precedes the rally itself.

So I would say that it probably could
start in different ways.

It could have the initial momentum or it
could be just an absorption that starts

the rally like that.

All right, great.

Let's jump to the next segment. This is
your next bias game.

Yeah, I'm just looking at this chart.

It's going to be probably difficult.

I'll make sure that we have maybe much
clearer charts in the

future.

Not my favorite, but still, let's go
through this. Same exercise.

So let's do this. And by the way, guys,
I want you to record your BIOS games.

the score how many out of how many
because at the end of the semester we're

gonna have our uh you know i'm gonna ask
you to email me your score so please

keep it let's talk about the markets
really quick um

so i think that you know last time we
were somewhere here

right here yeah on this red bar

So the key was not to penetrate these
lows and obviously

not these lows.

And as we are seeing the change, how
does the change happen?

This bar right here, it actually
committed to the downside.

The close was below the last significant
bar that committed above.

the last bar to the downside.

So we have a down movement, an up
movement, a down movement,

and then this bar reverses the previous
bar, an up movement.

So if we're not being caught up with an
idea of like going after each swing,

then this looks like a test and this
looks like a failed screen.

which we would label as last point of
support, and all of the bars that are

coming out of this area, out of the
higher low, are momentum bars.

Now what's interesting is the volume
signature is not supporting that

in terms of like, oh, there is not
enough bind.

My argument to that would be there was a
lot of bind right here, and then this

higher low is just a function of the
smaller selling pressure.

right now so therefore whatever
absorption

happened here in this at this level we
don't need to have uh such a strong

demand presence to push the price up and

if the price would commit above let's
say this level this cluster

Then we would be talking about the ease
of movement.

We would say the price is moving on
deteriorating volume signature, on

decreasing volume signature, but yet
it's progressing to the upside and

committing above the

specific levels.

that we identify here as the resistance
so that would be definitely that ease of

movement all right what else are we
looking at um so we were discussing

this in wmd and then suddenly i don't
know why we were discussing phase c here

um i later returned to this uh chart and
i was like um that was a great

call right here to the downside uh why
are we even talking about accumulation

here if we're still in the downtrend
that's what i was talking with students

yesterday in wtc so this reminds me a
little bit of this kind of like again

inactivity selling and inactivity
meaning that institutions are out they

not buyers there nobody's buying there
so i think it's just going to drift and

then it's going to break again to the
downside

The original goal that I had there goes
to around 5 ,000.

So let's just see if that's going to
materialize. Oil is very finicky and

interesting as kind of like a puzzle, a
challenge here, because it

feels that the character of the move to
the downside had characteristics that

were bullish.

High or low suggested a reversal.

Reversal has happened. And then on the
news, price goes down again. It doesn't

really go down that much. But, you know,
we want to see the lift, and there is

no lift here. So I would be kind of very
cautious about that market.

Gold also just short -term have
objectives to the downside.

That's in line with the market's rally.

and some of the gold trades that were on
the upside are going to unwind. I think

all of this speculation should go away
before we're going to see the next big

move. A lot of the central banks were
buying.

And I think a lot of the, I was just
thinking, why would the central banks

lot of gold? Well, for a lot of reasons.
But I think with the situation with

tariffs is basically suggesting

A lot of the manipulation and wars with
currencies.

So your most stable asset is always gold
because this is the asset where

investors by default go in the time of
the crisis. The more you own that,

the more stable your currency could be.

Kind of like that again, gold standard.

And therefore, central banks are buying
a lot of gold.

um so um if they bought in if we're
looking at the big picture right if they

bought in and let me just do this let's

let's look at gold for a second so

if there were bars on the way up and we
see kind of uh they

probably not even Most

likely, they've been buying as a program

for quite some time, all throughout
2016, 17, 18, and 19.

And they just accelerated their buying.

But what I want to say that in this
rally, you clearly could see where

speculation started to take place.

Probably somewhere here.

This is a very speculative volume
signature increase.

So all of this speculation has to get
out of the system.

So that supports the idea that we might
have lower prices in gold

for the short term being something like
this, maybe like into this area right

here.

And that would take all of these
speculators out of their positions. They

be closing their positions.

And on that capitulation, so we have to
have maybe like a day or two where gold

is going to be in the news and gold is
going to be doubted as that favorable

position, that's when the big operators
are going to come in and that liquidity

will allow them to get into the more
meaningful position.

Looks a little bit bearish here, right?
But at the same time,

yeah, look at this. Lower highs, sign of
weakness.

Lower high again.

And it's just breaking to the downside.

And it's breaking both on the diminution
supply and diminution demand.

But because there is a change of
character right here, the bias is to the

downside.

or consolidation in, so that's what it's
doing.

All right.

Okay, great. Let's come back.

Yeah, this is something that I tweeted
out today.

I was thinking about tweeting it out,
you know, like even on Friday. I

made this on Saturday, I think, or on
Sunday.

but wanted to see the news on tariffs on
Monday, so delayed this, but

this was kind of like a Friday close,
not Monday close.

The idea here is just to look at the
whole formation and to see if

we could time the entry and this latest
reaccumulation. How do we

do that?

Well, we need to have the original
count, which is the campaign count.

And in this case, I'm taking the most
conservative count for the large

structure. And the most conservative
count is going to be in phase C, from

C to phase A.

So it's always going to be at the lows.
And when you have a shakeout, it's going

to have this.

weird shape.

So it's almost like, what am I
measuring?

But you're measuring this whole
formation.

You could also measure it from the test.
Test happened here slightly higher.

So this would be also another count that
you could have.

47 boxes with one point reversal. And
please note, I've defined the

user scale myself.

I didn't allow

the ATR to define the scale because ATR
defined the scale of 36

points per box, which I thought was a
little bit too much.

How did I define the box size of 25?

Well, the rule here is very easy. At
least, you know, I kind of have this

shortcut rule which I use just looking
at the price.

I look at the chart. We are somewhere in
the middle of 2 ,500.

So 1 % move of that is going to be 25
points.

And it's just easier this way. So box
size 25,

reversal 1.

And then we have 47 boxes times 25
boxes,

1 ,175.

And we put this on the line, on the 23
.50 line, and we get the price

of 35 .25.

I think it's a very different move for
us from here.

This is going to be, what, more than
10%. And

I'm just thinking about the timing.

So the timing mechanism works like this.

When you have the original target, which
is 3525,

you need to create in the
reaccumulation,

in the confirming count, the same number
of boxes

that would cover

the count in such way that would bring
it to the same objective, 3 ,500.

So we could back engineer it when we can
say, okay, well, if, for instance, we

need to get to 3 ,500 on S &P in this
reaccumulation, how many columns

would we need to create?

Well, we need about 24 columns, and
that's exactly where we are right now.

From the last point of the support,

to the change of character where supply
has increased and showed us you know

some you know elements of the supply uh
we need 24 boxes and that those 24 boxes

materialize so that gives us the timing
and it basically tells us that if this

is the reaccumulation it should be
completed by this time and the price

leave the trading range that's the only
timing mechanism that we have with PNF.

And it's just so nicely kind of like
showing in today's market. Hopefully we

are right on the bias.

So we'll see how that's going to go.

Trade count, we are taking this
formation right here. I already shown,

the LPS and change of character points.

Here we have the possibility to take the
maximum and minimum because we have two

count lines, 2750 and 2900, 24

boxes times 25, 600, 3350 and 35.

So here are your two confirming counts.

One is from their regional zone, from
their regional trading range, and then

another one on the backing up action of
it, which acts as the reaccumulation.

And I think that there is another one.
So tomorrow in WMD, I'm going to show

guys a different count, which could

take us all the way through this
formation. So kind of like interesting

if there is anything there.

On the labeling.

Any questions on the label? And I kind
of tried to stay at the higher level.

Stopping action, phase A with both
tests. So kind of like would even say

that this is phase A, phase B, phase C,
sign of strength,

backing up action. So everything seems
to be logical, at least for now, until

it's broken.

Arvin is asking.

StockCharts does not allow annotation.

What do you use to annotate this PNF?

Well, I just take StockCharts, as you
could see.

I copy -paste it to Paintbrush or

PowerPoint, and that's where I

manipulate the image.

So that's all. That's all to that.

All right.

Okay, great.

Now let's talk about the sand power
because I even don't remember, guys,

specifically what did we say. I think
that we said that the stop loss is going

to be slightly below $10. Am I correct?

Do I remember this correctly?

You kind of have to keep record on this
for me.

and by the way here ronnie is showing us
that exactly that idea right so we're

looking at 10 boxes box size um half a
dollar uh and then it takes us

to the target of 10.

um well of course i mean like if it's a
target of 10 then probably the stop loss

should be somewhere lower but it did go
actually let me just see where

what was the lowest

it did go to maybe like nine something,
9 .10, 9 .20.

So I think that it would take us out
just even on this bar right here or on

the bars below that.

And here is a very interesting question.

I mean, if, let's say, if you wouldn't
be in this position,

how would you think about this stock?
That's number one.

Secondly, where do you think in the
formation we are?

Thirdly, if you know where we are in the
formation and the structure, then what

would be the action here?

And fourthly, with the trade that we
had, what was the mistake?

So let's address those issues maybe like
one by one.

Let's start with this. Where do you
think, guys, we are in the price cycle?

for this stock.

And we've talked, and you could just
kind of like tell me.

Okay, so if this is the price cycle,
where do you think we are?

Accumulation.

Distribution.

Okay, Sharon is saying still in the
downtrend. Well, Sharon, we're probably,

what, talking about this downtrend right
here?

so this is very short term right so i'm
going to say in the distribution okay uh

yes we were okay and like both of you
are right because if we look at the

short term right we're going to say yes
we are in the downtrend like sharon was

saying and we could say that well
partially we are in the distributional

formation with that is short term

Ricky's saying distribution,

Francis is saying long term looks still
like a backing up action.

Yes, so the long term, and this is just
a short term chart, the long term looks

like this.

And we did just this.

So we had phase C, we had a major sign
of strength, and we are in the backing

action right now.

So let's define where we are in the
price cycle first.

We are probably somewhere here.

Where would we observe that major sign
of strength?

We probably observe it in the emergence
of the trend quadrant, right?

So therefore, we are somewhere at the
beginning of the trend.

Institutions got in into the stock. They
own the supply of the stock.

And right now, backing up action is
happening.

How is this backing up action is
unfolding.

That's what we are trying to figure out.
And then based on that, that's how we

should be thinking about our trades.

Well, we see that we have a very
definitive buying climax.

into the major sign of strength high.

Then we have a distributional top.

And then, what do you think, guys, this
is?

This reaction?

How would we label that?

Because you're thinking about the
distribution here, but i want you to

okay so i'm going to relabel this and
i'm going to say this whole thing here

this range is the bind climax trading
range then

this reaction would be labeled how and
what is it

yes

automatic reaction exactly

Remember that pattern in the
reaccumulation?

We're going into the climactic action.

Then we're going to have like a small
distributional top.

Then we're going to have some kind of
shakeout, like a downtrend, which is

to be our automatic reaction, and then a
consolidation.

Out of that consolidation, then we're
going to have a resumption of the trend.

So I think that maybe that's what's kind
of like happening here.

We were in this small distributional top
that suggested to move to the downside.

Here's this move.

Look at how the volume signature is just
diminishing.

There's no progression to the downside.

I think that there is some kind of
exhaustion of selling.

We had our last momentum kickoff was...

up to this area right here so we are
right in that zone where um you know

should be some kind of stop in action uh
and we see that but still

short -term weakness is still there both
on the relative from the momentum or in

price and we are probably somewhere here

so you could see how

we would be thinking that in the bigger
price cycle, which is at the beginning

of the trend, we're just going through a
potential reaccumulation as a backing

up action.

And then in the backing up action, we
are probably still on a change of

character going into the automatic rally
phase.

So from this point of view, think about
the trades that are available to us.

Those trades are...

probably gonna be what? We are either
opening the trade here with an

that this could be a low, a low in this
whole backing up action. And then we are

willing to go through this backing up
action and we are okay.

Or we could go for a short -term trade.

which would be a secondary test trade
into the highs.

Something like this. And I think that
from here, especially if the price would

stop here and would start going up, you
could have a small causality to push the

price in an attempt to retest 14, 15, 16
bucks.

So I think only those trades are
available here. A low probability trade.

To the downside, after such strong
accumulation pattern, is a low

trade. It might happen, but we'll
probably catch a lot of people off

And then if that happens,

we most definitely, like if the price
goes down and then some of the people

were buying on the way up, what are they
going to do? They're going to start

capitulating. So here, that capitulation
would be quite intense.

But we see that selling is diminishing,
so our expectation is that there's gonna

be an attempt to go up.

And as it happens, we need to make a
judgment.

Does it have a lot of momentum behind it
to sustain the trend, or at least to

sustain the rally, let's say to 14, 15,
and so on and so forth.

But don't we observe significant bars
that make the automatic

reaction be earlier in the chart?

Don't we observe significant parts that
make automatic earlier be earlier in the

chart? What do you mean, Simon?

Here is our significant bar as the
reversal of this close,

this, this,

and then we probably would combine this
too.

Then this one right here.

You can combine these two. So you would
be still in the downswing at this point,

and you would be thinking any type of
bar that closes above 10 would be a

reversal type of bar. That would suggest
that the downswing is done and that we

could potentially go up.

Here is the question. Why is the
automatic reaction so late in the chart

the buying climax?

Okay, well, that's the thing.

Formations, right? So how do they form?
How does the price movement stops?

It stops on the bars that have some kind
of selling present

behind them.

And we definitely see that in these bars
that I've highlighted here. All of

these bars have those characteristics
where they are making the new high,

breaking to the upside of, let's say,
either a long -term or just a local

breakout.

And they have...

volume spikes behind them that suggest
that there is supply signature behind

those bars.

So we are identifying where the selling
starts

into the distributional pattern, and
we're just saying that this whole thing

just that distributional trading range
that has elements of selling

into the strength, and then that stops
the whole move to the downside.

So on its own, it's a substructure, it's
like a mini structure.

So we want to recognize that.

And we would label this as a buying
climax trading range or something like

But it could have its own structure,
buying climax, automatic reaction,

secondary test, sign of weakness, up
thrust, and you could... have it like

phase c but then this downtrend is going
to be a part of a large instruction by

buying climax trading range automatic
reaction

yes simon it's its own mini

structure yeah

okay can we look at

the weekly chart sure

Okay, really quickly and then we're
gonna go from

there.

By the way, here is a daily. You don't
have to see weekly.

Just condense all of the data and you
could see the whole structure. So we're

sitting exactly on this levels that
we've had before in the price structure.

So I would say that if you're thinking
that the price is going to be somewhere

here in the future, so future value,
then this probably presents a very

interesting, unique opportunity to get
into the position, probably something

like this, where we have a lot of
momentum to the downside.

I mean, if the price recovers and then
goes to that level, it probably would be

the lowest point here, and that's how...

the stride of the trend probably would
be created something like that and then

acceleration is going to happen in this
area um but we need to see some kind of

reversal out of this area and you know
around nine ten dollars all right great

think we're done with this right guys
for today okay great

um other questions

Okay, so let's see. What is the time?
Four o 'clock. Yeah, we're still okay.

When you discuss mean reversion traders,
you advise that they would usually

trade around the overbought, oversold
regions of a trend line or a trend

channel. In the chart below, would you
say that there would be two groups of

mean reversion traders?

those that use the horizontal trend
channel and those that use down sloping

trend channel. Okay, so right away,
Simon, I think I'm going to kind of like

stop this discussion right here.

I think what they're using is a mean
reversion

channel. They want to understand
statistically how the price deviates.

above or below the mean.

So in this case, we're still seeing the
downtrend.

So therefore, our mean is gonna be
somewhere here.

So whenever the price hits the support,
it's gonna be an oversold condition.

And whenever the price hits the
resistance, it's gonna be an overbought

condition. So every time it comes to the
resistance, they're gonna sell.

Every time it comes to the support,
they're going to buy.

And that strategy is just going to be in
and out, in and out. And then don't

forget that when I say the mean
reversion, I don't necessarily mean a

group of traders.

I mean a specific group of traders that
use this strategy.

This group could consist of different
type of institutions, professional

traders, but also just money managers.

And money managers, they are inclined to
take the profit at the points of

extreme.

So overbought, oversold conditions
obviously would be very favorable.

Now, having said this, this is
definitely more of, you know, if

institutions are trading here, those are
professional types, you know, because

we're looking at Aussie and U .S.
dollar.

And this is a smaller timeframe.

So it's all of the trading around the
needs of the importers, exporters that

need the specific currency on a specific
day and so on and so forth.

And technical traders definitely would
use linear regression there.

Okay.

Okay, so this here we're going to
discuss in the November special,

about the momentum.

So probably let's talk about it there.

Okay, next question.

Okay, I've identified the breakout bar
and the associated backing up

action.

However, I'm a little bit confused as to
whether the next white spread bar an

increased volume buying climax okay um
is

actually a buying climax or a
continuation of the price up move of

this one right here and then this one
right here okay um so

this

This bar came right here.

So we are still, what did we do here
from this treatment range? And see, it's

little bit of a limited data that you're
giving me here, Simon. So I might be

completely off here, but from what I
see, I would say that this is the sign

strength. This is a backing up action
right here. This is the breakout of the

backing up action.

And then the next bar definitely could
be a buying climax.

But you have to consider different
factors. You have to consider how long

causality have you had to have such a
short advancement.

So I think that the key here, if you're
not sure as to what

kind of,

where reversal potentially,

or rather where the trend could stop.

I would just use a trailing stop loss.

And it seems like, you know, this
particular pair allows you to do so on

hourly because with the significant
bars, you would be moving your stop loss

probably like this.

And you still would be in this position
as of the last bar. So this way, you

don't have to think a lot about, oh, you
know, it's a buying climax.

type of thing or you could think about
this and you could scale out you can

say okay i'm going to scale out like one
fourth i'm going to scale out another

one fourth but then half of my position
is still going to be on and i would get

out of this last half just based on the
trailing stop rather than you know

identification of the buying climax
because sometimes when you know we could

early identifying the buying climax and
then you're out of the position and i've

been in those moments and you know
they're just kind of like not cool all

so uh what else um

okay so i think that b

is kind of like negated because of that
as price unfolds in real time

okay um all right so

all of this basically comes to the
question of how do we actually analyze a

trading range?

If you're thinking that this is a buy
-in climax, then you have to go through

all of the labeling, right? So, and
phases. We should have automatic

secondary test, another test in B,
another test in B, potential phase C,

and then phase D, something like this.
So that's how you would be thinking

that.

All right.

From Dimitri, is it recommended to have
positions both long and short, assuming

we found stock in accumulation and
distribution?

Very interesting question, more kind of
like of the institutional type. Usually

retail traders would have the positions
kind of like directionally only in one

direction, not necessarily in two.

So there are so many answers to this
question.

I'm going to give you main ideas here.

You could have a definition of your
portfolio between

longs and shorts based on

let's say, market context.

So allow the market to define the weight
of your long positions against your

short positions. So you could say, for
instance, in the

bull market, you could have,

let's say, 100 % exposure

in your loans, and you could have maybe
like 10 % exposure in your

shorts. What it means is that you're
using the leverage here a little bit,

you can do this even like this, 90 %
loans, 10 % shorts, or 5 % shorts.

Because in the bull market, you want to
stay with the market itself.

And especially, like I wouldn't be
advising, and sometimes I don't quite

understand that.

part of the institutional thinking.

Like, especially in the times like we
have right now, where the initial

out of the consolidation, you know, has
a push to the upside.

And it's very difficult to find the
positions that are going to be having

moments to the downside in a meaningful
way.

because those are gonna be more rare in
the markets like this.

So I would also be timing it, right? So
I would also not only base

it on the market context, but I also
would time it

with some kind of momentum
characteristics. And we will talk about

November special, where those momentum
characteristics come.

at which spots of the trend to sustain
the trend.

And at those spots, those are not
favorable for short positions.

Short positions are gonna be favorable
in the long -term

uptrend structure when you have short
-term, let's say,

cyclical weakness.

These are gonna work on

And for sophisticated and advanced
retail traders, I actually do advise

for you guys to use hedges.

I constantly hedge my portfolio, not
just going to cash, but actually having

some positions and hedging against them.
And I could hedge either against the

position itself or I can hedge my full
portfolio against the market volatility

in general.

And that's how you sustain your equity
line in the times of

market, you know, local volatility.

Also, you could be thinking about the
distribution of your loans and

shorts.

So we have based on market context,
okay, so you find that.

So when at that time, we would be
thinking, okay, yeah, so it's just

the same, yeah.

Whenever we have those type of short
-term volatility events in the secular

bull market, that's when we would
usually want to hedge.

So for the retail trader, I think it's
more useful to stay with the main

trend and then to short when there is an
increase in short -term volatility.

That would be my answer to that.

Maybe a few long positions on
accumulations and one or two shorts on

distribution to keep the equity curve
smoother.

That's the idea, Dmitry, so you're in
the right direction here.

Or is it recommended to have position
100 % and think with what we believe the

market is?

So as I said, majority of your position
or positions,

majority of your portfolio should be in
line with the major trend.

Because that's how we're making the
money. Having said this, some pockets in

market are going to have bear markets.
Those are going to be rotational markets

where the money are taken out of that
specific market. You could definitely

operate there.

You have to coincide it with the major
market corrections, though. So that's

main kind of requirement there.

All right.

From Simon, and here a couple of
questions on labeling. This is a bias

game chart from two weeks ago, I
believe.

Question number one, not sure how to
label the WICO phases for this upsloping

trading range.

All right, so not a trading range,
Simon.

Just...

I mean, I kind of see the logic here in
thinking if you're thinking maybe this

is a bind climax, and then this is an
automatic reaction secondary test, B,

B, and then C. So there is some kind of
structure to that. But it's not

horizontal. It's not really...

the upslope here is just too much for
the trading range,

even upsloping trading range. So I would
be thinking that this is still an

uptrend, and I would be thinking that
there is a deteriorating momentum

signature on this uptrend. Look at the
momentum on this leg, and then look at

how momentum is diminishing, and then it
diminishes even more.

So with that, One of the interesting
ideas that we're going to explore in the

November special is going to be looking
at this momentum, where do you think,

guys, the price should retest as it
reacts to the downside?

Probably into the area of the value
where before they bought in.

Where did they buy in, where the
momentum was present?

So anything below that is a buy.

and you kind of could see how multiple
times that was the case, and that

became a reaccumulation.

So that's how they define their value,
but we could see from the footsteps on

the chart that there is no bind on this
wave, there is no bind on this wave.

We're probably gonna retest this area
again.

there are quite a few short positions
that we could open here one short is

to be around this area because this is
going to be that small distributional

area remember we've talked about this
today that buying climax trading

range which is distributional this cause
creates the movement to the downside

and change of character happens

And we've seen this today twice, one on
bias game chart and one on sun power.

So that's kind of like looks somewhat
the same structurally. Let me just come

back really quick.

Again, look at this bind climax and then
distributional formation and then

automatic reaction.

distributional formation, automatic
reaction, right?

How do we identify the distributional
trading range? Is it evident by the

increase in the volume signature?

Well, first of all, I'm looking also
kind of like very briefly through the

chart.

identifying the whole trading range
right here and thinking, where is my

of character? So here it is. What comes
before that? There should be some kind

of climactic run.

I don't see that.

So then if that's not the case, then
probably diminished momentum character,

which we see. So this was the last wave.

And then we're seeing how maybe this
acts a little bit.

As the buying climax, there is a little
bit of the acceleration here.

And then this in between seems to be
like a transitional element,

menu structure between the change of
character and the conclusion of the

uptrend.

What would it be?

Probably just a small local distribution
that leads to the change of character

itself.

And this pattern is actually...

such a repeatable pattern, especially in
the reaccumulations.

This is how usually change of character
would start after a smaller formation

like this.

All right, so yeah, I definitely would
be still thinking that this is an

uptrend. I would be labeling this
trading range.

I would be labeling this trading range.
I would be labeling this trading range.

We could label definitely this trading
range.

We could label this trading range. We
could label this trading range.

we can label this trading range.

So as smaller trading ranges, Simon,
these are the ones that I would be

labeling.

And then just kind of like from a much
larger perspective, bigger

vision, reaccumulation. So we're
thinking about three phases, three

tests for us. Test number one, test
number two, test number three. And I

that we went through this before.

How do we identify the upslope and
downslope and tracking ranges then?

Okay, so if we are thinking about the
downslope, in this case, lower lows,

we would do this.

And then we would be thinking major sign
of strength.

And then a backing up action.

That would be our downslope.

I don't see any upsloping ranges here,
maybe just this one, but this looks more

like an apex, but you could think of
this as an upslope.

All right.

The trading range did not evolve. Does
it mean that my labeling of buying

automatic rally secondary test was
incorrect?

So I think we went through this.

Why does the big supply result?

in a sign of strength rally so shortly
afterwards, no trading range was

to absorb the supply, was this a
shakeout? So we're talking about this

here. It does have characteristics of a
shakeout, but because it commits to the

downside only on one close, and then the
price comes back into the trading

range, I probably would put this as a
spring.

Just trying to understand the question,
Simon.

Why does the big supply result in a sign
of strength

rally so shortly afterwards? So why does
this action happens very shortly?

Okay, well, I think that we need to kind
of like look through the volume

signature here. So obviously not as much
volume signature initially, and then

the volatility comes.

So I think it's from this volatility
where there is this rotational exchange

between institutions and, you know, from
one hand, the stock goes into

other hands.

So once this happens, that's when...

you know, everything resumes, and that's
why we're having this rally.

But it's just a little bit too fast, be
an overbought, mean reversion, some kind

of volatility here, and that's kind of
like what happens.

I would call this a spring timer, not a
shakeout.

All right.

Let's talk about something else. We had
a conversation about significant bars,

and there is still some questions that
are left on this, specifically the

definition of the significant bar. And
as I was preparing this slide, I

that I actually do not have a
definition, so I'm going to give you one

usually use in the classroom, and maybe
you could put it in your notes.

This is more...

the swing reversal mechanism rather than
the significant bar itself.

So we'll start with the description.

So what do we want to see? We want to
see the bar that has a significant body,

significant spread, big spread.

And you could define that spread by

being above average by a certain
percent. So if you're coding,

bar, that would be one of your code
definitions.

Then the close, we want to have the
close either above or below one half of

spread. So obviously for the up bar
above one half and for the down

bar below one half of the spreads.

We also are giving our significant bar a
definition of commitment.

So that bar has to commit to the
downside or to the upside relative to

previous bar high or low and or relative
to the most recent

resistance support actions.

But if we're talking about just
definition for the significant bar, I

that significant bar is the price.

progression and commitment in the
direction of the institutional effort.

It defines the commitment of
institutions and it

also defines the possible commitment
line in the

opposite direction, where if we see the
commitment in the opposite way,

then most likely that

swing is done.

Okay, a little bit wordy, but you know,
I'll think about this. So Stephen,

hopefully, satisfactory maybe at this
point, and then I'll think about more

about, you know, like the definition
itself.

All right, from Clement again, I really
enjoyed your synchronicity of effort in

the result explanation. I sort of had it
in my mind that it has a life cycle of

four states.

In context of an uptrend, value selling,
stopping action, deterioration of

demand while supply is present,
synchronicity of effort versus result to

downside, and ease of movement, would
that be a fair thought?

Yeah, that's this traffic light that we
have here.

Stopping supply first, that produces
weakness in the supply,

both in the supply and the demand. It's
not just in one.

like you have here, deterioration of the
demand. It's in both.

Supply also deteriorates because it's
exhausted, absorbing that demand that

comes in.

And then increase of the supply that
produces synchronicity with price

and only after that an ease of movement.

All right, and with that, let's look at
the time, 420, great.

So I need to volunteer, say yes.

What we're gonna do here is we're gonna
go into a bias exercise.

And based on this bias exercise, we'll
be thinking and talking about

synchronicity.

And we'll be kind of like trying to
figure out

how we could use this concept in our
bias definition.

All right, a volunteer?

All right.

Simon, I'm glad that you are
volunteering on the day when you can

class.

Yes,

I can hear you now.

How are you doing?

I'm well, thank you. How are you?

Yeah, good, good, good.

All right, so we'll kind of keep the
synchronicity as an idea at the back of

minds.

But here, okay, so here is our chart,
obviously an IPO.

What do you see in general?

Like when you look at the chart?

What is the general sense that you get?
Maybe something that catches your mind

right away and you start thinking about
specific buyers.

I sort of see a lot of volatility,
specifically with a lot of supply

see in May a big gap down, and then the
sort of volatility sort of goes

away from about June.

Yes, and that's my observation as well.
So I'm looking into like two periods on

this chart. I'm looking into period
number one and then period number two.

just has different textures.

And I think that you

could see that not necessarily

just in the price spread itself, right?

we definitely could say okay look at the
down spread here here here here

here here even in the uptrend you have
those big volatility uh

spikes you know big spreads and
obviously all of it here to the downside

the huge gap and then going into the
second uh texture uh what do we have

Probably with an exception of this bar,
there is really nothing else.

Maybe this, but I wouldn't even pay
attention to this.

This.

There is really nothing else.

So I would totally agree with Simon that
volatility is kind of like vanished.

And that's great. That just gives us
what kind of bias in general, Simon?

Initial thought is it's biased to the
downside.

only based on that first period that
first section which you've identified

but usually wouldn't the uh decrease of
volatility be associated with bullish

bias uh yes um but what i'm not seeing
there is that

um it's oh no it is making higher lows
and higher highs well i

just kind of like as an idea guys um

volatility as a term always being
associated with the moves to the

We kind of expand this definition a
little bit and we're saying that even

bars to the upside like this, this is a
lot of volatility to the upside.

This is a lot of volatility to the
upside.

So when we talk about diminished
volatility, we usually would be

talking about the areas where selling is
subsiding, there is not a

lot of selling, and therefore with no
selling, we would be expecting a bullish

bias. So that's what I was kind of like
thinking, Simon, when you said

diminished volatility.

So instantly my thought was that you're
thinking about the bullish bias.

Okay, so if we're thinking about the
bearish bias, then what are the

main tenets here?

for the case of the distribution?

So if I was looking for characteristics
of distribution, I would be looking at

selling at the top of the trading range.

So it's an increase in volume.

Yeah, but I don't see an increase in
volume there. So I would have

as to whether or not it was
distribution, but then that big... gap

sort of makes me sort of not be so sure
in terms of my initial

thoughts.

Okay. I think you're on the right track
here. So again,

I do not see this as a big mistake

to have a different bias.

at the beginning of the trading range
when you start analyzing it.

I think what needs to happen, like in
the bias game, you should have the

capacity to see the change and then to
be able to change that bias as the price

goes through a specific change.

So we have identified a couple of
changes here, right? So we've identified

probably this reaction as the main
element of change.

We said that on both sides, there is
such an increase of volatility to the

downside where there is a gap, where
there is, you know, increased in the

signature. This is the highest volume
signature since, you know, the first two

initial days of the IPO.

So there is a tremendous volatility
right there.

But at the same time, and I think Simon
mentioned this, a higher low, that's

very unusual.

Because the effort has increased so
much.

So on the increased effort, we're making
a higher low.

That just tells us that the result to
the downside is diminution.

And we could expect some kind of rally
out of this. The trading range goes

through the shorter period of
absorption, and then here we are. We

rally.

So, Simon, coming back to this reaction,
this higher low.

that suggests the rally, but could it
also suggest that the bias might

be different?

Yeah, I guess one thing that I sort of
have clear in my mind is what the

process is when first looking at a chart
and trying to understand which bias it

is, either up or down.

Well, I would... go one you know
structure by structure so element by

element number one element number two
element number three element number four

five six seven eight

nine and then ten and then wyckoff story
would be created

through all of these elements right

So let's just go through this really
quickly.

Element number one, a very bullish IPO
bar that suggests the

bias is to the upside, but it also
suggests element of the supply. So we

see what's going to come next as a test.

The test comes, and in two or three
days, we see that supply is still very

strong. So that suggests that.

uh you know uh there's some selling uh
at least at the minimum we could go into

the trading range as we go through the
trading range second point of excitement

right here sign of weakness lpsy a
downtrend so bias now is to

the downside for sure element number
four um accumulation

very short accumulation so we're not
expecting a prolonged trend here

Our target is here. As we come there,
there's another element here with

sign of weakness.

And then a drop to the downside into the
higher low at seven. So as we said,

you know, bullish result. We're
anticipating some kind of bullish

happens. Element number nine, a rally.

And then what happens?

What's the story there?

So I just went through all of this.

And then what's the conclusion, Simon?

So just a couple of questions then. So
in the section two, would that be

regarded as an upside bias still because
we're making higher lows and higher

highs? We would be thinking that we're
still in the upward bias until we see,

let's say,

this supply coming in and then we would
be saying at this point the character is

Suggesting maybe a bearish scenario But
we need to see some kind of confirmation

of that What would be a confirmation for
instance another attempt to go up and

then a failure? So it's sign of weakness
here access that confirmation So

throughout we're still going to be
having let's say a bias to the upside to

confirmed or to fail And then let's say
on this bar right here, we would be

saying that this bar confirms that the
up bias is down, has failed,

and now the bias is to the downside.

As well as the bar like this would also
act as a confirmation.

Yep. And then does it revert back up to
the upside after it leaves the area

four where we start to then make the
high lows and high highs again?

So how does the change happen here?
Okay, so first we observe this selling

climax, automatic rally that have a
change of characteristics, and we're

thinking, okay, the bias could change
here. So to confirm or to fail, we're

going down, not committing to the
downside that much.

That's a confirmation of the up bias.

We are rallying with more momentum
again, and then we are reacting just

So that confirms, again, the bullish
bias.

And then here, our final confirmation on
the breakout. So that would become an

up bias.

But you are defining the bias based on
the swing's reversals.

You are not defining the bias for the
whole formation.

When you're thinking about the whole
formation, the first question that I've

asked was the correct question because
you're looking at the whole formation

you just want to basically figure out is
there more selling that's happening

or there is no selling.

And that's basically what we want to
kind of...

gauge from the first look and it feels
to me that you know that's why we have

these two textures here one has more
volatility one has less volatility

therefore one has more selling one has
less selling if we're going from the

environment where we have more selling
into in the environment where we have

less selling the question is who's
holding the supply from that selling and

was it Was it sufficient to absorb the
initial supply?

And is this low volatility area shows us
that now is the time?

So those are kind of like the questions
that I would have there.

Okay, well, how would we interpret,
let's say, let's approach this from a

different angle, Simon.

How about this?

I want you to analyze just this portion
right here.

and don't look at what has happened
before at all.

Don't even think about this.

Think that this is the IPO price right
here.

How would you analyze this chart?

I would say the Dow moved down to that
last bar as the

selling price.

Okay. So there'll be a trading range
which is formed, and then there'll be

the... automatic rally, and then the
secondary test.

And probably maybe even something like
this, we see that swing.

So this could be a secondary test right
here. This could be the conclusion of

phase A. The trading range is small, so
phases come really fast, okay?

Off -thrust, okay? And then where do you
think phase C is?

Probably about that.

between the 20th and 27th of June.

Yeah, so somewhere there.

So this as a spring?

Yeah.

And then you have a sign of spring,
which gets tested.

Uh -huh, and a test.

So therefore, probably this is our phase
C was the first test.

Okay, everything in between is B.

And then phase D, where is our phase D?

It would just be after the breakout.

Okay, so sign of strength, backing up
action, phase D.

Okay, and then we go into another
formation.

Would you say that just kind of like
looking at this too, could it be that

was like a minor sign of strength and
this could be a major?

Just one formation on another.

I mean, you have to entertain this
thought. Why? Because what bias do you

here in the original formation? You have
a bias of the accumulation, right?

Yes. So when we are doing something like
this, jumping out, our first

thought is going to be, could we have a
much major sign of strength?

We definitely see a lot of supply here
that comes in that suggests that we're

going to go into a trading range.

We define the trading range by the
boundary of the change of character.

Here it is.

So now we have to look through this
range. So let's look through this range,

Simon.

What do you see?

Do we have distributional
characteristics in this range?

Well, usually my guideline is for
distribution characteristics is sort of

price which is around the top of the
trading range, which has increased

And I sort of see that in the Doji bar,
the top of the trading range,

at about, is it the 22nd?

Yeah, so I see that there's a lot of,
there's a big volume spike there. So

there's some sort of opposing force
that's stopping the price from moving

upwards.

And that's the supply, and that's
probably natural because that's, I

natural supply zone based on that first
big up bar and that big momentum move.

And what does the supply do here?

We're seeing that supply is actually
diminishing, right?

So around the resistance. So we went to
the zone to 12 .5 or what is it, 12 .35.

And we've encountered supply.

There was a lot of supply.

What kind of effect did it produce
relative to the previous rally into this

supply?

Not a large effect, I don't think,
because if you have a look after that

supply that comes in at about the 22nd,
price doesn't fall immediately, sort of

falls slowly.

And then it sort of only takes out.

I guess the last commitment to the
upside in about the 12th of September

that significant down bar?

Well, think about what happens here with
these two bars, right? So they are

analog bars. They happen at the same
contextual place at the point of the

resistance. They have the same intention
behind it. Commit above 1225,

both fail.

So also the volume spike increase is
similar in the volume signature itself.

But what's interesting is that the first
bar, when supply increases, has the

result like this.

The second bar, when supply increases,
has a result like this.

So which bar has better absorption of
the supply?

The second bar.

the second bar exactly we are at the
same price level and supply is coming

in i mean okay there could be an
argument it's smaller supply but at the

time this is the bar number three on
this chart so if there is a lot of

that's coming in right there And yet,
absorption happens like this. So in it

itself, this action where absorption
happens at the same price level and that

doesn't move the price, you know, is
bullish in this regard.

But because there is a lot of supply
that's coming in, we're still expecting

reaction. What kind of reaction do we
have? Does it increase in the result?

No.

Does it have...

towards the end of this reaction?

Yes, it does.

Does it increase or decrease?

It decreases.

Does it produce the intention of
committing below

the support?

No.

What about the next reaction after that?

This one right here.

Does the selling increase or decrease?

The selling decreases.

Does it produce the same, an increasing
downward result?

No, it doesn't. I see that the
volatility or the price spread to the

a lot narrower than the previous
reaction.

If I would be asking you, Simon, you
know, where is the selling has happened

this latest trading range?

I would probably just hear from you
these two bars.

But there's really nothing else.

And then as you said, volatility is
really low. Volatility is really low. So

when we look into this area, then we're
looking into the accumulation and then

we're looking into probably
reaccumulation right here. So we're

kind of continuation.

there is really nothing else in this
area that we could see. Whatever supply

comes in, it's all being observed.

So that's why there is such a big
difference between these two areas,

the first area there is so much
volatility, and then in the second one,

kind of like a very controlled move to
the upside.

Whatever supply comes in does not
produce a big reaction. Whatever supply

in after that...

absorption happens at the higher level.

So with that, I think it would be kind
of like on the very big level to think

that this is an accumulation just
because of how volatility has been

diminished to this point. And then go to
the structural analysis and just think

where we are. Where do you think in the
structure we are here?

Maybe entering phase C?

Yes, BB, possible phase C. So we would
be looking for maybe

some kind of bar that would reverse.
That would be our point of entry. We

also enter as the price goes through the
high of the last bar to the downside.

We could do that.

Let's look at the result.

Okay, so that was square, and we were
right here. So here is that bar

that reverses, and then that would be
our point of entry. Our next point of

entry will be Simon where?

On the Simon Strength bar in about
November.

There you go. Could we buy on the next
bar?

Yeah.

We can. So the problem here is going to
be that, you know, we can't really use

the stop loss like this, but it's still
a sign of strength bar.

Momentum is dimension, so we kind of
know that we're going to hit the

and going to have that reaction.

So our stop loss is probably going to be
still low.

But here's our first point of entry.
Here is our second point of entry. Where

the next point of entry?

After the backing up action.

Which is where?

14th of November.

14th of November. This one right here?

The one before it. The one before it.
Okay.

Where's the next one?

Potentially it was at one, two, three
bars later, that little sort of hammer

candle.

Okay, this one right here, or this one
right here?

Yeah, that one, yeah.

Yeah, I probably would be thinking maybe
this one right here, but most

definitely this, the breakout.

Breakout again.

Then what is the next one, what do you
think?

Would it be the next sign of strength
bar?

Which is one, two, three, four.

This one right here?

Yeah. Well, think about where we want to
open our positions, right? So we want

to open our positions as the trend
emerges.

In our cases here, as the swing emerges,
right? So we're probably going to be

talking about anything before sign of
strength backing up action.

So I think that we've kind of concluded
our...

entering the position right here. Most
likely it's going to be in the next

where it's going to be more or less
oversold.

So probably somewhere here.

We could also consider it here with an
idea that this could be the lowest low

the potential reaccumulation that still
will touch the support line right here.

So here and here, something like this.

The same idea here.

But at least we know that the buying
climax has happened and we have had a

consolidation. So maybe like a breakout
right here. So we basically want to

enter the position closer to the area of
the short term overall

sold condition.

And we'll talk about this in December
when we will discuss long term campaigns

and how to swing trade them.

And, you know, that will be kind of like
one of the main discussion points for

us.

All right, Simon, so what else could we
discuss here on the bias

that could help us to define the bias
quicker and better?

I guess initially the things that I look
for is lower highs and lower lows, and

that would sort of define the up bias.

Okay, yeah, that definitely would help,
right? So if we would

be defining higher highs as, let's say,
one formation over

another, then this would be a higher
high, this would be a higher low

so you would have that sequence. So
right here you would be looking for a

position because you would be thinking
that you could be in potential uptrend.

Yeah.

Okay. All right, Simon. Well, thank you.

Thank you, Roman.

Great. Let's talk about synchronicity.

Same concept, same kind of chart, same
type of exercise, and we are

talking about the same concepts.

We want to find first a stop in demand
in

the

when we have the price going to the
downside, we've talked about

from the opposite side, you know, on the
distributional side.

Now let's talk about the demand rather
than the

supply. How would demand absorb the
supply?

So as we could see, the stopping demand
would always come in the area of

the climactic action.

or in the reaccumulation, it will come
at the low of the automatic

reaction.

Why is that?

Well, because a change of character is
going to produce an increase of the

supply, and that increase of the supply
will need to be observed by that demand.

And that's why demand has to increase
its present at that point of time.

and that's what stops the first change
of character.

In the accumulation, we're just going to
have a regular selling climax where

demand comes in, and that stops the
price from moving further down, and that

produces also a rally that has some
short covering behind it in the

and that just exhausts both supply and
demand.

both energies are increasing and
colliding with each other, and that

produces this big, big volatility. After
that, there's going to be an exhaustion

between demand and supply.

Both are going to be exhausted and their
signatures will go down.

Then demand is going to win in the
accumulation, and this is where we're

to observe the increase of the demand.

and increasing the result as well.

Once that is done, the price could
travel up on lower demand signature that

would identify an ease of movement.

This process will repeat itself over and
over.

Selling climax with immersion demand,
exhaustion of the demand and of the

supply into phase B.

Emergence of the demand, this is not
that visible here, but emergence of the

demand off the lows in phase C, and then
ease of movement either in D or out.

Reaccumulation is going to be slightly
different.

Demand is going to come in on the first
initial rotation in phase A. This is

where the profit taking is taking place.

we could have a rotational
reaccumulation, right? So this is where

from one hand's strong hands could come
to other strong hands.

And in both cases would be institutions.

They need the liquidity. So phase A
provides that liquidity for them. And

why institutions are not really going
away from phase A.

when they are buying into the position,
if their future valuation is somewhere

up there, then it doesn't really matter
whether they are buying in phase A or

whether they are buying in phase D.

The time factor for them is less
important than, let's say, for the

traders.

Liquidity is more important, so they're
going to buy at the point where

liquidity is the highest.

So therefore, increase in the demand.

On the second reaction, we're going to
have the exhaustion of both supply and

the demand. So the reaction and the
rally are not going to be that great.

And then off the lows in phase C, we're
going to have demand coming in and

producing some result.

And after that, on the diminishing
demand signature, we're going to see how

price starts to move up.

Ease of movement.

That's going to repeat again.

Change of character, demand comes in,
produces the rally.

Phase B, no demand, no supply.

Phase C, demand signature increases, and
then an ease of movement

after that.

Again, change of character, demand comes
in.

It looks like supply, but there is a
demand that is hidden there. We know it.

see it.

And then after that, we see the
exhaustion of the demand and the supply.

Demand produces a result, and then ease
of movement as the price goes on low

volume and lifts the trading range.

That's the concept of change, and that's
the concept of how synchronicity is

being reached.

And we definitely want to use

these elements and to identify those
points where we start seeing

synchronicity of effort versus result.

So everything in green, this is gonna be
our first points of where we would be

thinking and considering opening our
positions from the perspective of

timing.

So we would be thinking about that.

All right.

I've read somewhere before that for the
market to go up or down, we need effort

or volume.

Would this be an oversimplified
explanation that it's more complex than

statement? Yeah, so we need the volume
signature that basically tells us that

there are more market participants and
they are either buying or selling.

There are moments in the marketplace
when There are no buyers, no sellers,

volume is low.

A really good day like that was
yesterday in the markets when we have a

holiday in the U .S. And then we also,
in

the market, we're kind of like, you
know, very

in anticipation waiting for the news on
tariffs.

So those type of days are going to be,
you

know, low volatility days.

And they're going to represent that
phase B type of, you know, demand and

both are not there.

And then there's going to be days like
this where synchronicity is going to be

there. We want to recognize those, and
we want to open or to add on those days.

And you can go through the trading range
with this traffic light and try to

define where exactly that synchronicity
takes place, where exactly the timing

becomes more apparent, and especially in
the swing analysis. And you can use

this for the bar -to -bar.

You can use this for swing -to -swing,
and you can use this for phase analysis.

There are multiple uses of this tool.

So hopefully that's helpful.

All right.

Five o 'clock.

That's great. We have 30 minutes. Let's
jump into our action sequence.

Let me know who wants to volunteer, and
we'll do this together.

And meanwhile, I'm just going to go
through this really quick.

um so that you would remember where we
are we started with the stock that also

was an ipo stock uh very aggressive
initial buys that we see

off the uh off the bat uh no selling

and then they're still buying on the way
up once they bought on those two waves

they're not buying they're not buying
they're not buying and that leads to a

more meaningful trading range.

We saw this as a change of character,
and we said that, okay, well, maybe this

is where we are in this range, and this
is where the price is going to be for

the time being.

Also, the latest gap right here on the
increased volume signature suggested

we're going to stay here or even have,
you know, maybe like some kind of

reaction.

We had that reaction.

And I don't know if I remember
correctly, I'm not sure if we've talked

this.

This decline had that low volatility
signature.

And usually we would say that this is a
very bullish sign.

This means that there is no selling.

And with this type of movement, the
timing of the end.

of this move is usually gonna be an
increase in the volume signature because

this increase in the volume signature
would identify to us emergence of the

demand. And it happens somewhere here.

So basically on this bar right here,
you're just saying, okay, well now

is there.

We just need to define that reversal
bar, which comes right here. So here's

reversal significant bar.

Please note, you know, Stephen, on the
definition of this bar, what is this?

This is the commitment to the upside
above actually multiple closes,

most recent closes that we had to the
downside.

And that commitment shows the commitment
of strong hands to the upside, at least

at this point of time.

The significant bar should be an
expanding bar.

the close should be above one half of
the spread for the bullish up bar.

And we want to see that significant bar
committing above the level of the

resistance that was defined by the
opposite force.

So from here we're expecting some kind
of rally where two probably into this

area right here.

And it seems like every time we have
some kind of supply characteristics, we

into new high, we have that supply
characteristic. And we said, you know,

time that this was very interesting.
Supply is going lower and we have better

closes. We have better absorption. We
just kind of repeated that concept,

look at the absorption here and look at
the absorption here so different type of

absorption so this one suggests that
maybe that's going to be a continuation

our target is going to be somewhere here
so if we're in the trade that that's

how we're trading it all right and this
is where we are this was the last

chart uh so um volunteer

and we'll go from there We have 30
minutes, so that's great.

All right.

Oh, we have two answers, so we'll go,
you know.

Actually, let me not

mispronounce this.

Thibaut, how do I pronounce your name?
I'm sorry if I'm mispronouncing it.

Hi, Thibaut, can you hear me? Thibaut,
yeah, okay, great. Yes, I can.

Yeah.

Okay, how are you doing today?

Good, how are you? Good, good.

All right, so this is where we've ended
last time.

And Tivo, let me just ask you this
question. This last reaction, what does

remind you of? Is there something
specific about this reaction that tells

something about, let's say, the rally
that we are in?

Yes, there is a change of character.

Okay, great. Yeah, and why is this
change of character?

Well, we had a big move from April to
October to late September. Yes, great.

And then why is this a change of
character? Yeah, so we have that rally.

What does it tell us that this is a
change of character?

Well, just looking at the bar, but the
volume.

It's not showing any supply.

Okay, interesting.

So those are kind of contradicting
ideas, right? So we need to

maybe slow down here and think about
this for a second. So we're seeing a

of character. Why?

Because the downspread bars are
increasing.

Also, Thibaut, what about the length of
this reaction?

Just by itself. So it's like 22 bucks,
22 and a half dollars. Before that, what

kind of reactions do we have? So
obviously all of those reactions.

The spread is much wider.

Yeah, the spread is wider.

The downswing is bigger in distance.

And then we have, you said that we have
some kind of increase of the supply.

But it's not really.

a distributional increase of the supply,
we're probably just having

some kind of profit taken at this point.

So what could we expect with this change
of character, Thibault?

A resume of the trend?

Yeah, a resume. It could be like an
automatic reaction if we go to a phase.

Okay, yeah, so this would mean that the
highest point here is probably buying

climax, right? So we might be going into
a trading range.

That's idea number one. We might be
going to some kind of reaction, but that

reaction, judging by the volume
signature, is probably going to have

bullish characteristics.

So we need to see if this whole
scenario, the reaction that we're going

or the trading range that we're gonna
have is gonna have some kind of either

reaccumulation for the trading range or
bullish characteristics

for the reaction.

Okay, well let's see what comes next. So
here is our reaction.

So TiVo, what do you think now? Is this,
you know, we said that two scenarios,

either a trading range, And then we have
to look for, you know, obviously

some bullish characteristics.

Or we're going to have some kind of
reaction, okay, reaccumulation

characteristics. And this reaction for
us to stay bullish should have some kind

of bullish characteristics.

So obviously not number one, we are not
in the trading range. So let's answer

this second question. Is this reaction
has...

does this reaction have bullish
characteristics or bearish

Well, that's bearish.

Okay, so let's show that bearishness. So
where do you see that bearishness?

Well, there is the, I would say like
automatic reaction like early October.

Okay. But it fell right in like 65.

Right, so there is some kind of
hypodermic almost action, right?

Speculation on the way up.

And then urgent distribution on the way
down. Urgent selling on the

way down.

Okay, so you said something about the
automatic reaction.

Okay, what about it?

Well, it's fair like it resume and then
we have a bit spread down mm -hmm So

that that's showing continuation And I
probably like how would you even like

label this?

What do you think Well

from the top we have like two

lower low.

So the first one would be like a
secondary test.

And the third one, like in early
November, would be last point of supply?

Yeah. Well, because this is a
hypodermic, then our

phases are going to collapse, right? So
they're going to be extremely short.

So you could do something like this is
phase C.

This is phase A.

This is phase B.

Major sign of weakness, LPSY.

And then a downtrend.

You could also have it in a different
way. You could have a structure here.

And you can say this looks climactic.
This looks like a buying climax

And then change of character, secondary
test, test.

and then phase C has kind of like this
more prolonged phase, and then sign of

weakness into this, and then LPSY, and
then the downtrend. So this probably

would be even more preferred labeling.

You can do either.

Okay, so we were talking about different
distribution characteristics. So I see

the distribution characteristics here.

I see the distributional characteristics
on the increase of the supply on the

reaction. I see distributional
characteristics on the institutional

right here.

What happens after that?

The spread is diminishing, but there's
still supply available.

Okay.

relative to supply that we have had,
let's say here, what is this

supply doing?

Maybe slightly lower.

Slightly lower, yeah.

Okay, so not as much selling producing
kind of like this

laborious move to the downside where the
spread is just diminishing. I mean,

like compare the spread in this area to
this and this.

This is just such a big difference.

What does this remind you of? Does this
remind you of maybe like this action

right here?

Yes, it's similar. And it could be like
a stopping action from where it started.

Like if you draw a horizontal line,
that's basically where we have the gap

Yeah, look at that zone where that
happens. It's almost like it's

Where is our supply and high volatility
and at which price

level? So somewhere here, I'm just
quickly trying to figure out where

we have those big spikes of selling.

And we kind of see that it's this zone
right here.

But it's not like the price cannot stay
there. It actually spends a lot of time.

in that zone. It actually spends more
time in that zone than let's say below

or below it. And whenever it's below, it
seems like the selling is just like not

there.

So could we be part of a larger
structure where this would be the value

Yeah. And we have to wait to see the
phases develop?

Yeah. So we kind of seen there that the
selling was at this level, then the

selling became at higher level and it
just that the price just dipped down

into the value zone where there were a
lot of buys before.

We don't see a lot of selling.

So this looks bullish at the end of this
reaction.

And maybe it would suggest that we could
potentially have some kind of another

rally here.

you know, just based on the analog and
based on the supply signature.

Okay, well, I wonder what kind of
confirmation of the

rally we should have. We should probably
have something like this, right? Where

we either have a trading range or we
have some kind of, you know, a series of

tests. So let's see what comes next. By
the way, would we be buyers here?

Yes.

Okay.

I would wait to develop because it could
go further down.

Let's wait for a test.

Okay. So let's just ask the whole class.

What do you guys think? Would we be
biased here?

I mean, do we have the – we've talked
about the bias, the short -term bias. We

see the deterioration of selling.

So we're assuming that we're going to
have a rally here.

but would we be buying now would we be
waiting for the trading

range to unfold

no

wait for the short cover and test of the
low first wait for the test volume

looks still high now

Okay, so what volume are we talking
about?

So we're talking probably about the
selling volume, right? So here is one,

is two, here is three. So we kind of see
that the supply definitely diminishes.

We see that probably this is a
relatively

easy pickup for us here, which is
thinking that we're

probably experiencing this.

return to value. Where is the value for
them? I think that here, this area right

here where, you know, some additional
institutions came in into this position

and established a new position.

Then again, somewhere here in this area
especially, as it jumps out, and

then again here.

So throughout this whole level, we see
elements of big high volume

signature that suggests a lot of
presence of institutions.

So it seems that the value, the fair
value for them is somewhere here around

bucks.

So from here, probably we're going to
have a rally right into this zone. And

then we're going to have maybe like a
small consolidation right there.

So we could build some kind of trade
around here.

There is definitely demand that is
coming in.

and then look at how now demand is
moving freely right so

we have that synchronicity now where uh
there is an almost like an ease of

movement okay well let's see what
happens next let me see some other

i mean right now we we at the

edge i i would i would be

I mean, you're mentioning you would just
go in. I would be hesitant.

Go ahead.

The volume is starting showing up, like
it is of movement.

Would it be better just to wait for
retest and see are your volume kicking

Yes, absolutely.

Yes, that would be the next test.

So the next test would be a bar like
this, and then we would be coming in on

bar like this. The next test would be a
high or low, and then the resumption. So

we would be coming in here, and we would
be coming in here.

What's the logic here of me saying that
we're probably going to go into 50?

It happened before multiple times on
this chart.

So look at this. We're thinking that the
value, It's somewhere here, right,

around $50. Then what happens next?

So we're deviating above that value.

And if we know that the value is, let's
say, at $50, we know that there's going

to be at some point a mean reversion
trade.

And usually when there is, you know, a
good profit built in into that, that's

when it's going to happen. And we know
that we want to observe the bar that's

going to have an increase volume
characteristic.

and then increase price characteristics.
So these two bars right here would

identify for us that that mean reversion
trade to $50 is probably taking place.

The same happens here, right? So we're
seeing how there is no momentum here.

There is no momentum here. There is no
momentum here.

And there is a vanishing momentum here.
And it's all around the same price where

we have the momentum going into the fair
value, and then we have

the momentum diminishing, and the same
to the downside, the same to the upside,

the same to the upside.

So I'm thinking about that type of
trade, where we're trading into the fair

value, into about 50 bucks, and then
hopefully that momentum is going to

us over. We just have to make a judgment
what kind of momentum we're going to

see here.

all right so let's uh that's why i'm
saying that maybe out of this oversold

condition we could get in right away but
we also could wait we could wait for

more definitive characteristics here
let's see what comes next okay

so here is that one big bar another big
bar we kind of jumping into that

value zone still not at 50 but close and
then look at this test

so that's great we're thinking okay
we're in the value zone we

could maybe continue that move um how
would we label this by the way what do

think people when the you have the
gappers that would be a buying climax

the gap center is very yeah so like all
the way up

Well, it looks more like, you know, we
were talking about like hypodermic

activity here, right? So it's hypodermic
reverse, so like a V -shaped bottom.

Okay.

So, you know, this looks more like a
sign of strength and then a backing up

action and more like a minor sign of
strength.

So then if that's the case, then this
would be phase C.

And then where is the stop in action?

Probably somewhere here.

This is a slightly different labeling,
guys, that you usually would be

accustomed to.

So phase A and phase B here, then
oversold into phase C, quick recovery

value zone again, and then into the
backing up action continuation.

All right.

So what do you think about the rally
itself?

Is it a better rally than we have had
before?

What do you think?

It's kind of similar, a bit faster.

There is big momentum, but it stops at a
resistant level.

Well, yeah, we're looking at the
characteristics.

So momentum has increased. It takes less
time now to get to the same highs.

And volume is much lighter.

We can see much larger volume than
before.

The volume is much larger than before.

And we kind of like the IPO volume is
just large, you know, in it by itself.

here we see a definitive increase in the
volume signature over the previous

area, over the previous rally. So what
does that mean?

Well, the institution are buying in.

So we should expect that. Are you
present?

Absolutely. And because we have a rally,
what are they doing? Institutions are

buyers.

And are there a lot of buyers?

Yes.

There is an increase in their
participation.

Is there an urgency to get into this
position?

Yes. Yes, we see this from the increased
momentum signature.

Okay, great. So then it kind of tells us
that maybe we're close to getting above

the previous highs because there is some
kind of urgency.

Okay, what about the latest trading
range that we have right here?

What do you think about that?

Well, that would be a climax on the
first one. We have a test.

Possibly a C phase and going to like a
last point of support, going to backing

up action.

Something like that.

So would we be considering a position
here at this point?

Yes. When exactly?

I would probably would like to wait for
the last point of support.

Just wait for a little pullback because
we can see the volume is decreasing.

So there may be a reaction there before
resuming the up move.

Yeah. So I would say that anything in
the break of this line right here

would just tell us that we would be
expecting to go in and to the position.

the way, guys, look at what kind of
stock this is.

It went to $75 in two, two and a half
months.

So this is times three.

This is a high momentum stock.

So once it breaks out, it's probably
going to, you know, run away from us.

So we want to make sure that we are in
the position. It looks like the volume

signature is pretty bullish.

I mean, look at this, all of these bars
to the upside.

There is no really a big reaction after
the rally either.

And it rests on the support of the first
distributional formation

that we had there.

So it looks ready to go. But let's come
back to this trade that we discussed

before. So point of entry here, point of
entry here. Those are going to be kind

of like very risky probe type of trades.

those are not going to be your regular
trades. Your regular trade is going to

come here, here, maybe here.

And you would be thinking your target
zone somewhere here in this area.

Going into this bar, you're going to be
thinking that this is probably where we

might be having some kind of stopping
action.

So a swing trader would get out
somewhere here and on the way up,

the change of character bar. The long
-term trader, is gonna do nothing.

There's gonna be maybe an attempt to
hedge, but the way how

the momentum unfolded suggests that
we're not gonna have a prolonged

reaccumulation, a very deep
reaccumulation.

Okay, what else could we notice here?

Change of character bar, well defined,
suggests that we are done.

we are done with this uh rally and we
are going to go at the minimum into the

consolidation uh you know steve has said
the dimension volume characteristics

suggesting continuation okay let's see
if it would get us into the position so

somewhere here on at the open we could
get into the position throughout uh this

whole day on the breakout at the close
event on the test the test kind of gives

us an idea that you know we probably
could get into the position but we would

have to see what kind of momentum we are
going to have here momentum diminishes

and we would be expecting the price to
come probably to around this level which

it does so kibo what are we going to do
now

That could be one of my problems.

I'm usually very early to exit, and I
don't sit on the threat to let it

So here, you know, I would see a climax.
I would be intended to exit and wait

for the range, a new range to develop.

Okay. Yeah, so a new range, something
like this. So we are probably, what,

somewhere here, right?

Yes.

somewhere here so at least you know at
the minimum we want to have some kind of

free test so we could wait for the
second low hopefully it's going

to be a higher low and we could come in
somewhere on the higher low we are

definitely in the uptrend at this point
of time where are we in the price cycle

tivo what do you think

We have great momentum, so I would be
expecting to start fading at

some point.

Right, but where are we in the price
cycle?

The trend is still up, so we're still in
an uptrend.

There is no sign of distribution yet, so
I guess we have to wait and see how it

develops. Okay, so accumulation is
segment number one.

emergence of the trend is segment number
two, uptrend segment number three,

change of character into the
distribution four,

distribution five, six, seven.

So that could be your number four.

Number four? Number four, possibly.

Okay, well, think about this.

I mean, if we are at number four, you're
basically saying that we have concluded

the whole price cycle, the markup of the
price cycle, right?

So, and think about the causality that
we have. So what is the causality here?

No,

we're still in the uptrend.

We are still in the uptrend, yes. But
the question is, how would you define

causality here?

Where did accumulation happen?

Yes, in May we just had the backing up
action, so we should expect higher

pricing.

Right, so we really need to think about
where we are in the price cycle to

define what to do.

So we're thinking...

we're seeing accumulation on the way up,
on the way up,

on the way up, so all of this absorption
there,

on the way up right here,

on the way down, on the way up.

So we're seeing a lot of the
accumulation on the way up and also in

formation right here.

So this looks like, you know, a trading
range.

So this is the whole causality. So if we
would be measuring, you know, by P and

F, this would be the count, this whole
thing. And probably we wouldn't

you know, the IPO.

So for this type of the causality that
lasts more than a year, let's say a year

and a half.

Do you think that they're going to get
out of the position after six months?

Would you call this like a major sign of
strength and going to backing up

action? Probably.

It's a major sign of strength. Yes,
correct.

So major sign of strength into the
backing up action.

And we're probably still early on in the
cycle itself.

So then you... hopefully that will help
you with the long -term positions and

you can stay there for some time if you
could recognize that the causality was

huge enough and that the price still has
not reached

that target. Okay, well, let's see what
happens next.

We do have this higher low here.

And this looks like an earnings gap
right here.

So we said that somewhere here, probably
on this bar,

you know, we could have that point of
entry.

Yeah, and that looks like a really good
point of entry for us right here because

it's in the oversold condition.

Okay, well, we are on the last bar.

Thibault, how would we interpret where
we are?

It would be like a climax.

Yeah, it looks like a climax. Possibly a
trading range or a small consolidation.

Okay, so take the position here.

I mean, take the profit here.

Yeah, volume is very strong. There is
like no selling.

Yeah, there is no selling, so what does
it mean?

It's continuing up.

Yeah, probably could be a continuation.

If we're thinking about an oversold
condition, whenever we have some kind of

gap or big bar spread that breaks to the

upside, how do we judge what comes next?

we usually look at the test.

And what we want to see is both the
price being able to stay

at that level where the big bar
finished.

And then the second thing we want to
look at how much supply comes in.

So in this case, there is a lot of
effort to push the price down, but the

to the downside is limited.

So this is bullish.

Here, there's not that much supply as
there was at the previous instance.

So that suggests a continuation.

Here, we're seeing that supply is also
not as much as let's say in the first

case. Let's say right here.

So we're expecting a continuation.

Here, we don't have a lot of supply, but
This demand is also not that great

relative to the previous attempts to
break out.

And then the price kind of drifts down
and look how quickly it goes to the low

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

here. And here we are still holding and
supply is not that great.

It's actually the smallest supply on any
type of situations like this that we

have had.

So this shows a lot of strength and that
suggests still, you know, an immediate

continuation.

It's a very strange spot.

I actually was right into this spot just
recently.

And I couldn't bring myself to bind
here.

I couldn't bring myself to bind into the
continuation. But, you know, there are

some stocks where you have to have that
faith in the momentum.

And the continuation because next what
happens is something like this.

And then you still have a runaway
market.

And you go from, let's say, 130 to 175.
So that's about,

what, 25 % return right there.

So have to be really cognizant of how
this happens and maybe scale out here

just. one -fourth on what you think is
the buy -in climax, and then allow the

test to happen, and then just write the
last one with all of those left

shares that you have.

Okay, well, Thibaut, really quickly,
we're at 5 .30, so what do you think is

happening now?

You can see the volume is starting.

Coming and the spread coming down. So we
we might see that being a great up move

So we must stop seeing some supply And I
would be cautious after this. So how

would we label this move to the
downside?

Like a buying climax, okay buying climax
We changing the character

And we are probably in some kind of
reaction here

Something like this.

So now look at this whole big picture.

Here's your huge trading range.

Here's your phase C.

Here's your minor sign of strength, LPS.

And then some major sign of strength,
backing up action. But then another

major sign of strength, just like such a
huge move.

in such a short period of time.

And this was the start of the end for
this rally

that lasted from what, from about $25 to
$175. Wow,

what a move.

Let's see what happens next.

Here's that reaction.

So for those of you who recognize, who
traded the stock, Rocco.

one of my favorite momentum stocks right
here had a couple of trades here we had

a really good call here um i actually
bought the stock right here uh sold some

on the way up right here into that same
logic of the climactic action the

smallest portion was sold right here but
still not the greatest of the trades

and then uh obviously a very clear
change of character changes

of character bars, and then I started to
buying this stock right here, so I'm

currently in the position.

I think that this is an opportunity.

The way how I'm buying this is not
speculative.

I'm gonna hold on to this stock for a
couple of years, maybe three years,

the cycle, depending on the market as
well.

So my idea here is that this is the
stock that's gonna be

interesting stock for institutions.

Look at how the volume is increasing.

So they're still getting into the
position.

And this latest reaction to the downside
is actually looking like a very

interesting opportunity for them to get
at $100 or close to that in the stock

that has moved from 30 to 175 and
showing such huge potential

on how the business is going to unfold.

All right, well, Thibaut, thank you so
much.

Thank you very much. And I think, you
know, the price cycle you explained,

that's light up some ideas.

Okay, great, great. I'm glad to hear
that.

All right, guys.

Let's just see, maybe last question.
Between March and May.

March and May.

If we hypothesize that this is an
accumulation in phase B, don't see high

at the bottom of the trading range, that
may provide evidence to my hypothesis,

or is it because supply has been
observed?

So I'm somewhere here.

We are definitely seeing a lot of

Buying in this area right here. This is
just a period of an activity. It was

just you know some local spikes and

We would be thinking here that you know
this

looks like an accumulation so our Trade
here is going to be to the upside.

We probably would be Thinking of getting
out somewhere here

And then just restarting the trade
somewhere here, here, and then somewhere

here.

Okay, well, I don't know, Simon, does
that answer the question?

Yep, okay, great.

All right, guys, that's it for this
class. Don't forget your homework, which

the bias game.

Here it is.

So for next class, we're going to go
through that.

And obviously, I want to know as to, you
know, what are we going to do with

the anatomy of the trade. So

we have to think about that.

And then at some point at the end of
October, we're going to...

Start talking about the process as well.
So we're going to do this as a home

assignment. We're going to establish the
process, and you guys are going to

bring me the homework on the selection.
So that's going to be interesting.

So that's going to be at the end of
October.

All right, guys, that's it for today.

I will see you next Tuesday.

Happy week. Thank you, guys. Bye -bye.