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EXERCISE

-Provide your phase analysis

-Label the trading range as it unfolds

- Make trades: entry, SL and exit

January 20, 2014 Advanced WYCKOFF Course 4 Prepared by Roman Bogomazov

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PHASING of Wyckoff Accumulation trading ranges:

Phase A:

Purpose:1. Stop the decline

2. Exhibit the first signs of intelligent accumulation (Thank you, Bruce)

Selling Climax (SC) can be three types:

1. Big spread/Big volume;

2. An area of SC with local TR that can take more than 2-3 days to

develop;

3. Small spread/Low volume SC means either intermediate SC andlower prices ahead or exhaustion of supply during the later phases of

bear market.

Automatic Rally (AR) usually is the first counter trend rally that is bigger than

most of the previous rallies.

Secondary Test (ST) can be two types:

1. Local test of the Selling Climax (Phase A);

2. Secondary Test area which tests the validity of stopping action of

Phase A (appears in Phase B!!!).3. Test of a #2 Spring which tests a spring (appears in Phase C!!!)


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Phase B:

Purpose:

1. To retest a stopping action of Phase A;2. To work on the exhaustion of supply;

3. To define strength in future leading stocks.

Secondary Test Area can have several points of Secondary Test. Penetration of SC

and local ST to SC area means either further consolidation or more decline.

On the contrary, higher ST in Phase B would suggest an evidence of strength

and potential future leadership.

Upthrust action after secondary test means either active covering of the shorts or

initial strength.

Notable observations:The most important analysis during Phase B is volume analysis. Supply has to be exhausted

before demand becomes present.

Penetration of support and resistance clusters will give us the clues for how long a stock might

consolidate and/or whether we can expect higher/lower prices. Lower area of STs means

more consolidation and possible lower prices at the next phase and can be labeled as SOW.

Higher area of STs means potential strength and can lead to upthrust action.Upthrust is quite common occurrence during Phase B. If an upthrust action after initial SC and ST

happens too fast, expect a retest of SC+ST area. This will create a Mountain structure with

upthrust as the highest point.

Phase B is the most volatile and difficult phase of any TR to trade. Long-term investors/traders

should avoid initiating position during Phase B unless there are signs of strength.


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Phase C:

Purpose:

1. To retest a support area of either Phase A or Phase B;

2. To exhaust remaining supply;

3. To catch traders on the wrong side of a trade.

Spring #1 is an evidence of continuing supply and is a continuation of a

decline.

Spring #2 is the most common occurrence among accumulation springs

Spring#3 is the least common occurrence among accumulation springs

Shakeout is much faster and deeper than #2 spring and is usually coincidedwith market decline.

Failed Spring has the same intention to retest the support lows, but fails

because of the underlying strength. It creates a higher low and

indicates lack of supply and readiness to advance (demand). It is a

stronger pattern than Spring 1-2 and a shakeout.

Notable observations:

The reversal signal at the support level in Phase C puts a stock on a Springboard.Springboard is a point of no return from which price should advance firstly in the TR

(from support to beyond resistance JAC as a SOS) and then above the resistance

of the BUC (Markup phase starts here). Stocks with extra strength can potentially

Jump across the creek during Phase C.

The first high probability trade can be established closer to the end of Phase C on the

reversal pattern. If identified correctly, the price should not come back to the same

area.

February 24, 2014 Advanced WYCKOFF Course 4 Prepared by Roman Bogomazov

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Phase D:

Purpose:1. To advance a stock to higher ground of the trading range and

beyond;

2. For demand to have a control;

Jump across the Creek as a SOS

Backup to the Creek

Shakeout LPS is a potential event after JAC that will scare lots of traders.

Usually it happens during decline of overall market and/or because of

unexpected stock event. The best indication of potential continuing

movement after shakeout is a higher low formed by a shakeout.

Phase E:

Purpose:

1. To advance a stock beyond accumulation trading range;

2. For demand to be in full control with short periods of weakness(reactions and reaccumulation ranges).

February 24, 2014 Advanced WYCKOFF Course 4 Prepared by Roman Bogomazov

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STOP!

Conversation:

How does absorption of Supply happen in a trading range?

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SUPPLY Signatures for Different Wyckoff Phases (Accumulation)

Example of Supply Absorption - I

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p pp y p

Supply in Phase C occurs is higher than at

the SC or ST of Phase B Supply needs to

be absorbed at higher price levels before

price moves out of the range

Springboard POE

A CB

A CB

Example of Supply Absorption - II

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CB

A

Test in Phase B occurs on lower

Supply, but it is still a substantial

volume means more absorption into

Phase C should happen before price

moves out of the rangeSecondary Test in Phase B

Springboard POE

p pp y p

Example of Supply Absorption - III

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Test in Phase B occurs on higher

Supply that needs to be tested Phase

C should see Supply at lower levels

before price moves out of the range

Springboard POE

SOW as a Secondary Test in Phase B

A

CB

A

C

B

Example of Supply Absorption - IV

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Supply in Phase C is the highest than out

of all phases a higher low test with

decreased Supply should occur before

price can move out of the range

Springboard POE

A

CB

A

CB

SUPPLY Signatures for Different Wyckoff Phases (Distribution)

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SUPPLY Signatures for Different Wyckoff Phases (Distribution)Note: These are NOT ALL Supply signatures for Distribution TRs

Example of Supply Absorption V (Distribution)

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D

A + BB

Supply is steadily increase through Phases

A to D making the biggest downward price

progress in Phase D

Re-Distribution TR

A B C D

November 25, 2013 Wyckoff Supply & Demand Mini-Course Prepared by Roman Bogomazov

Example of Supply Absorption V (Distribution)

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Biggest Supply comes in Phase A Distribution on the

way down (Teepee formation). Both Supply and

Demand contract throughout TR structure with

subsequent increase in Supply in Phase D or E.

A

BC D

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STOP!

Conversation:

Can Supply signature be the same for Accumulation and Distribution?

If YES, then how do we differentiate Accumulation from Distribution?

Exercise: Same stock, same Supply signature What is the difference?

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Luiz - Dec. 8,2014