[Dimitri Deychak]

Let’s start a game – it’s called “This stock is being [Accumulated/Distributed] — Change my Mind!”

I’ll start — This stock (GRA) is being distributed, change my mind!

Feels like a good bias game!

 

[skoutasg]

As of 3/6/2020, old Grace (GRA) appears to have undergone its buying climax (BC), SOW, LPSY, MARKDOWN (MD), 2-PRELIMINARY STOPS, and subsequent SECONDARY DISTRIBUTIONS (SDs) prior to finally reaching its selling climax at $52.21?  Now the mop-up of any remaining supply prior to markup (MD)?  My 2-cents.

[Frantz Herr]

[Roman Bogomazov]

Weekly market update. Still uptrend. Institutions are buying one each reaction and absorbing supply very quickly. A true change of character reaction (read Automatic Reaction) will most likely be fast (5-7 trading days) and more pronounced (7-10%). That will finally lead for a pause. R

 

[Dimitri Deychak]

If you guys had an open position, would you close it out or see if supply that came in on the recent bar gets absorbed? Does the rally need to rest or s it just getting started?

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   lh.png
   

[rotageht]

It would depend on where you entered the position. If you entered early and and are sitting on a good profit, you could close a portion of the position and lock in a profit with a SL for the remaining position also being profitable. Good luck on the trade and thanks sharing!!

[Frantz Herr]

Hi Roman, I’ve been studying the chapter on Absorption in David Weis’s book “Trades About to Happen” in preparation for the homework you gave us.  I came across this quote:

Absorption does not always take the form of lateral movement. There are occasions when prices simply levitate higher. In these instances, prices climb the proverbial “wall of worry,” lock out would-be buyers waiting for a correction, and feed on anyone daring to go short. I think of the Greek phalanx marching in step across the Plain of Troy. Volatility usually stays low until a high-volume wide-range price bar temporarily stops the move.  

It seems to describe the way the market has been moving since October pretty well; and relates nicely to your lectures about trends!  (Hope David doesn’t object to me lifting a short quote from his book)

[Roman Bogomazov]

Great quote by great Wyckoffian describing extended uptrend move with vertical absorption.

[Roman Bogomazov]

Someone was asking about schematics. Here they are. Roman

 

[Drag0nflai]

Hi Roman, do you also have the volume signature schematics for the different accumulation and distribution phases you could share with us?

[Frantz Herr]

How do others keep tabs on the behavior of the overall market?  I have a spreadsheet I update every weekend that looks at what the market is currently doing from various perspectives – Monthly price swings, Moving averages, Sentiment, Money flows, Indicators, Visualization, Breadth, Momentum and Comparative Index performance.  The only flies in the ointment this week are a breadth non-confirmation and the Put/Call sentiment.

Posting this made me think I might want to add some cross-market performance indicators to the Comparative Index performance page of the spreadsheet.  Does anyone else have some cross-market indicators (stocks versus bonds etc) they keep tabs of?

 

[Frantz Herr]

I’m posting a stock trade I just entered to see if we can get some discussion going on the forums. The stock is GPRK. It’s in the oil patch. My annotated charts for the trade follow. My rationale is to participate in a potential developing uptrend in oil prices as a longer term campaign.  My initial R is 4+. Feel free to comment!  This is for discussion and education purposes ONLY and is NOT a recommendation; please refer to the disclaimer on the Forum main page.

[Frantz Herr]

[rotageht]

Here is what I see on the daily. Thanks for posting!

[Roman Bogomazov]

[rotageht]

Thank you for the feedback on the chart.

[Frantz Herr]

I really like the way you did your analysis Rotageht!  I am trying to train my eye to see all the same nuances you point out.  I think the regression line through the TR is upward sloping, so that’s one thing we differ on…  Thanks for posting

[Frantz Herr]

[Frantz Herr]

[aBuzz]

Hey Frantz — I did a P&F for GPRK use ATR(14), 3-box reversal that autoscaled to $0.74 box-size. Those parameters produced a confirming count of $49 to $59 — just a confirming analysis. Good Work. I don’t really invest in this sector, but oil sector has really been beaten down. Seems like a good campaign idea.

[Frantz Herr]

Thanks for the feedback Buzz.  The virus may derail the global economic recovery – the maritime shipping stocks are getting hammered and may be the canary in the coal mine.  This trade in an oil stock may get torpedoed as well.  I like the GPRK chart action but keeping it on a short leash with my stop for now.

[aBuzz]

Without admitting to my bias, the #37 is either easy or I’m missing something.

[Frantz Herr]

Here’s my analysis. If it’s wrong it doesn’t bother me. It’s just a reflection of my level of analytical skill at the moment. Actually, I would rather be wrong, I learn more from my mistakes and have something to work on correcting 🙂  (Just a guess, but from the time frame in months this looks like February 2003, at the end of the 2000 – 2003 bear market…)

[Frantz Herr]

The alternate bearish conclusion of Distribution would consider the inability of Demand to move price aggressively higher to a conclusive SOS after three attempts. It would observe that while Supply has diminished, Demand has also. There has as yet been no successful challenge by price of the selling zone between $40 and $42. Supply is a more important consideration than Demand in a base, but Demand needs to do its job eventually. Not really the case here as yet…

[aBuzz]

Franz — our interpretation and markings agree!

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[Frantz Herr]

Buzz, let’s see if we recognized it correctly when the solution is announced…

[Frantz Herr]

 

[Frantz Herr]

This is an indicator of the market’s condition that Bruce Fraser has shared in WMD…

[Frantz Herr]

This is what I am seeing on the chart of Bias game #36

[aBuzz]

Posted on twitter also.  The last two bars seem critical.  Next to last bar is a supply spike, but last bar price support holds above previous low (if re-accumulation Phase C).  My argument would be trend channel remains in tact — we should be alert for possible distribution.

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   Bias-Game-36-Reaccumulation.png
   

[Frantz Herr]

The answer key was just posted on Twitter. The lesson in this one is the quality of Demand in the second TR. This was a challenging one to analyze! Every time I go through a Bias game I can tell my analytical skills get a little better. It’s a great way to learn – and fun at the same time!

[Frantz Herr]

The interpretation of Bias game #36 that would lead to a Bullish conclusion is that all the Selling effort that is being expended in the final reaction on the chart is unable to create a lower price commitment.  Looks Bearish, Acts Bullish.  I can see that as a possibility leading to a Bullish/Accumulation bias since the current TR evolved out of a prior uptrend and price is more likely to emerge from this consolidation heading in the same direction.

[rotageht]

Hello. How did you attach the image of your chart?

[Frantz Herr]

Hi Rotageht.  When you posted your question, you opened up a dialog box.  At the top on the right hand side there is a little landscape icon.  If you click that you can post pictures in .png format.  Also, at the bottom of the box, there is a box titled Attachments:  If you click the Choose File box, you should be able to add a document file.  Hope this helps…  Frantz

[Frantz Herr]

The Biotech Industry ended last week in the 1/197 position within IBD’s industry classification

[Frantz Herr]

Here’s a weekly chart of a biotech on my WL (name withheld to protect the innocent).  Wyckoff Nation, what is your opinion of the bias; and what about timing and character for the next move?

[Nancy Simmons]

DISCUSS YOUR CHARTS, ANALYSIS AND TRADING

[Frantz Herr]

Curt, this is one possible market condition indicator you could incorporate into your Trading Plan, the S&P Bullish Percent Index.  If you subscribe to Wyckoff Market Discussion you will be quite familiar with it.  I have noted where each of the trades you posted occurred.  If you don’t wish to use this indicator to assess the market’s condition, please let me know what you will be using.

I have set the time period to monthly to eliminate most of the noise.  When it is above 50, the market can be considered to be bullish, so the most basic first consideration for any trades you make is for this to be above the purple line.  There are some other observations that seem important as well.  This is 10 years of history.  The time spent above the 50 level between drops below it has been compressing.  The overall level of each peak has also generally been declining.  This is suggestive of a market environment that is less likely to produce long trading upswings.  Regardless of the duration of the swings, the best returns are likely to occur early in the rising phase of each swing of the indicator as it breaks above the 50 line or reverses from an approach to it from above.  Notice where your trades occurred.  The first rule if you want to improve your results is to wait for the overall market to give you a tailwind.  This means being patient and waiting for the signal.  Please comment.

[Frantz Herr]

Done

[skoutasg]

TYME:  Sometimes the commentary comes in spurts, so individual comments get lost in the shuffle.  My suggestion is to repost if no response after 2-days or so?  IMHO.

[Kenneth]

Well that was not suppose to have amounts on the damn thing.  Sorry about that.

[Kenneth]

Frantz can you delete that image please.

[ArkadiyRezviy]

i’m unlocked)

[ArkadiyRezviy]

?(

[ArkadiyRezviy]

this post via mobile phone mail. I cannot login still

[Frantz Herr]

Arkadiy, are you able to post your charts using .png format?

[Frantz Herr]

Maybe the system doesn’t like the .jpg format.  Can you try it as a .png?

[Frantz Herr]

This post didn’t get blocked Arkadiy.  Not sure why you had a problem before?

[skoutasg]

Z1839:  The chart which you reference connotes falling volume or in Wyckoffian terms falling supply.  The latter can give cause to rising prices.  Although I am no expert, it is the trend of price and or volume which is the important factor in Wyckoffian logic, not the action of the individual bars.   IMHO.

[Frantz Herr]

Hi Z, sorry for the lull in dialogue.  1 Each volume bar is the total number of shares (assuming it’s a stock) traded during the time period of the bar.  For each share traded there is a buyer and a seller.  2 A long tail or wick generally indicates an unsuccessful intention to move price in the direction the tail or wick is pointing.  There’s a lot more to it, though.  What is the context?  I like how you use brackets on your charts to isolate behavior.  You are on the right track.

Might I suggest playing a few of the Bias Games on this website?  Don’t look at the solution before attempting it yourself.  Imagine you are about to make a trade.  Then look at the solution to see where your interpretation is correct and where you might have missed a clue.  There are 50+ of them.  It’s a great way to develop your chart reading skills!

[Frantz Herr]

Z, great deductions, but there’s more going on here than just the price and volume behavior of the individual bars.  Some questions to consider: 1 there’s a downtrend on the left of the chart.  What changes?  2 What do you think is going on across the horizontal area in the middle?  3 Do you see any interesting volume behavior in that horizontal area?  What do you think is occurring?  4 Why do you think price was able to move more aggressively higher on the second attempt than the first?  5 What can you say about the level price reached on the second attempt relative to the first?  6  How deep is the reaction after the second rally, and how would you describe its position relative to the horizontal area?  7 How is volume behaving approaching the right hand side of the chart?

Some concepts to think about: ability to commit versus intention; follow through.

If others are reading this, do you see a Wyckoff structure on Z’s chart?  What do you think about bias, timing and character of the next move in this  time frame?

 

[Frantz Herr]

30 and 5 minutes

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   NVAX-30-Minute.png
   

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   NVAX-5-Minute.png
   

[Frantz Herr]

Z, I woke up last night and couldn’t sleep so I put some NVAX charts together from the highest time frame to the 5 minute chart you are referencing.  Thanks for the opportunity to do some chart analysis!

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   NVAX-Monthly.png
   

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   NVAX-Weekly.png
   

3. 

   NVAX-Daily.png
   

4. 

   NVAX-4-Hour.png
   

5. 

   NVAX-2-Hour.png
   

[Frantz Herr]

Z, cool.  A chart is a continuum, so the first thing I’d be interested in knowing is what is happening on the left edge.  Buying Climax from a prior uptrend?  What is the nature of the reaction off the 86.5 Hi?  Automatic Reaction?  Are we seeing the entire Trading Range or is there more consolidation to the left that isn’t visible?  Context is needed for a better understanding of the reaction in the middle of the chart.  Event driven, earnings news maybe?  The initial gap bar is selling, so Supply dominates.  Supply is obviously dominant in the second bar of the reaction as well but it is becoming exhausted as we can see by the behavior of the third bar where Demand is clearly present and able to stop the decline.  Price has reached a deeply oversold Value Zone for institutions as we can see on the initial leg of the recovery from the lows.  Whatever Supply remains is being absorbed by buyers and price quickly recovers to the first reaction zone.  Supply is presented and absorbed and a second leg higher commences.  Note the volume signature, Demand is becoming exhausted as well.  A second consolidation area occurs as more Supply is absorbed, but notice Demand is also becoming spent.  You can see this also in the shortening of the thrust in the three upwaves.  Finally, Supply is exhausted and so is Demand and price enters another consolidation range.  Volume is again expanding on the right edge.  What is the larger context in which this is occurring?  Roman teaches us to determine the Bias, Timing and Character of the next trending move out of a consolidation range.  The most efficient use of our capital is to put it to work in Phase |C| and |D| after Accumulation or Distribution is mostly complete.

[skoutasg]

Looks like a reaccumulation phase?  The bar is red because it is a day (or whatever period you are using) that price declined.  Large volume spike likely represents public selling in reaction to short selling by the large interests who are accumulating shares before markup?

[Frantz Herr]

Z, others will have more to say, but VSA is a big part of the Wyckoff story.  I’m sure you know about his 3 laws: 1 Supply and Demand; 2 EFFORT AND RESULT; and 3 Cause and Effect.  I used all caps for 2 because it encompasses VSA.  For price to go up (or down) Supply or Demand must dominate (rule 1).  To determine which force is becoming dominant, we use Effort versus Result (VSA) (rule 2).  To determine the potential for price to move – Effect – a Cause must be built (rule 3).  I’m not sure I understand what you mean by “Although it would be ideal to have such in depth knowledge of volume, I feel like it takes my focus away from the bigger picture.”  If you post some charts for us to see what specifically you are trying to resolve in your analysis we can continue the dialogue.

[Frantz Herr]

Z, check out lhom’s P&F chart below.  You can see the volume characteristics of an entire swing when volume is included with the P&F.  Check out lhom’s annotations for his interpretation of the Supply that is being presented.  skout charts volume a bit differently in his reply to lhom.  His chart nicely depicts the waves of buying and selling that Wyckoff felt characterized the behavior of markets.

[Frantz Herr]

Question #2, I hope others will comment as well, but I think for securities like futures that trade globally, after US market hours activity is important.  I personally invest mostly in US listed stocks, so I rely on volume during normal trading hours that my charting service provides.  Institutions move markets and they are often trading off the exchanges, but their activity gets reported and shows up on the chart eventually.  In the longer time frames I operate in, that is sufficient.  Others with a shorter term emphasis may have a different view.

[Frantz Herr]

Welcome to the forum, you will find we share your enthusiasm for Wyckoff’s methodology

[Frantz Herr]

Z, for some reason your last 2 posts are not appearing on the forum.  Could you please try again as a ‘new post’.  We welcome your participation on this forum, don’t want you to get the wrong idea…

[Frantz Herr]

Z, providing a link on this forum to draw our users to another web location – which will do exactly the same thing as this forum – is against the spirit if not the letter of this forum’s usage rules.

[Frantz Herr]

Z, providing a link to another web location for the purpose of drawing Wyckoff Analytics’ users away from this forum – which already does exactly the same thing – is in conflict with the spirit if not the letter of our forum usage policy.

[Frantz Herr]

Hi Z, could you post an annotated chart with some examples of volume bars that you find confusing?  I’m sure it would start an interesting discussion… Frantz

[Frantz Herr]

Z, the default volume bars in the Trading View app, didn’t change anything…

[Author]

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