A Wyckoff Student Notebook

Thanks guys but all I did was recognize the setup on SPWR, I had no idea it would explode so quickly. There's no doubt we are all getting better. Rock had some great picks that I wished I'd have taken but its hard for me time-wise to manage too much. Still though, for me the hardest part is getting out. Today before lunch I was watching SPWR settle into an intraday trading range, a bull flag waving in the clouds. I went to lunch, did not raise my stop. Came back from lunch and found that it dropped out of the range. Then I noticed the whole damn market dropped. I got stopped out of BABA with a profit and I'm not sure if I would have set the stop on SPWR high enough to get taken out, but all I'm thinking is, dang that was an expensive lunch. But yeah I'm way up on it. I can't complain a bit.

So the S&Pee doesn't look too good huh. Looks like the LPSY got printed. It could bounce but the SOWs and volatility are red flags and I expect just a test of the ice. I'll try and do some Point and Figure work to gage how low it could go.

EDIT: Well, using 1-hour data with a $10 box and 3-box reversal and counting from the LPSY back to the BC gives a downside target of 2860.

3-hour bars:

 

That's one of yours that I was seriously looking to long, but no time to manage it. As I recall your P&F target is $105. I like Burger King better than McD's and Popeyes is probably the best fried yard bird offered by any chain, they've got potential long term.

I think I might try to get in next week. On August 1st it managed to tag the August monthly pivot at 72.65. Next week's pivot is 75.85 and there is old-fashioned support at 75.62. If it tags that area I think I'll give it a shot.

EDIT: Oh it's better than I thought, QSR is the one which you used a conservative count. It could go to $132 counting back to the BC.

65-minute bars:

 

So on Fryday I decided to step out of SPWR for now, having held it for 71 hours. In retrospect my best sell would have been on the failed tests of the 16.03 high or even just after the LSPY was printed as it fell out of that first trading range, but that was when I was out for lunch and Trump spontaneously tweeted about further China tariffs. Or was it spontaneous, or is it any coincidence that Secretaries of the Treasury come from the revolving door at Goldman Suchs? Ahh, but I digress, we must play the system at hand despite the injustices and corruption and embrace the manipulation to our advantage.
So anyway, into the close on Fryday, SPWR completed phase A of a new trading range by printing the SC, AR and ST and stopping the intraday downtrend. But there is weakness in the background of this latest TR so I expect it will drift lower out of the range unless a SOS is printed.

Of course zooming out there is a larger TR at play here with the BC at 16.03, the AR at 14.38 and ST at 15.71 and that TR has strength in its background, so it'd be good to watch for phase C hopefully on some kind of spring of 14.38, either a capitulating terminal shakeout or an exhaustion of supply.

5-minute bars:

 

Sorry I didn't get back to you right away while we were both online but I had to run an errand. I'm glad you're finding Wyckoff useful. I remember when the first light came on for me. It was on the principal of Effort versus Result. It blew me away. Made any and all indicators I studied a waste of time, redundant and useless (except for scanning).

Personally I don't think there should be an "educational" thread on Wyckoff beyond this one for a few reasons.

• One, I don't want too many people to know about it. In fact I'm often torn about disclosing too much on this thread. That may sound selfish but this is a competitive business after all. Fortunately though, it is too much work for most people and they are content with mechanical trading, arbitrary lines on charts, hit and miss patterns, etc. But it works for them because it gives them an edge and they understand trade management. But the reality of the auction is that we want most people to be fooled by mechanical trading and take bad trades because that is how the composite man (CM) makes money and we follow the CM. We're here to make money, not save the whales or anything like that.
• Two, there are plenty of resources on the web, albeit the very less-travelled places, where information is available and it sounds like you have begun to discover them. Those like yourself for whom the lights have been turned on, will have an appetite for more and will dig and ask questions. Probably one of the best resources is Bruce Frazer's (Hank Pruden disciple) archived blogs in the Chart School on Stockcharts.com. https://stockcharts.com/articles/wyckoff/
• Three, this thread provides a learning opportunity by sharing practical applications. In fact I don't think there's anything quite like it. It is not a journal per se but a "Student Notebook" intended for every student of Wyckoff to post observations and to ask questions. Feel free to ask anything pertaining to Wyckoff or post a tube that you think is helpful. We are all learning here, post away.

There will come a time when the 3 Wyckoff principals come together for you and you won't need the instruction or opinions of others, no indicators, no fundamental analyses, reports, or news. These principals need to be memorized because they are the core of Wyckoff and what you are attempting to understand about a particular market:

1. Supply versus Demand
2. Effort versus Result
3. Cause versus Effect

 

Wyckoff was the father of technical analyses and his work was the basis of subsequent classics like "Technical Analysis of Stock Trends" by Edwards and MaGee, from which other technical analyses proliferated. One important thing that Wyckoff developed is how to draw trendlines and trend channels. Now days there's all sorts of convoluted ways to draw these that cater to mechanical trading instead of attempting to understand supply and demand, like drawing the line that passes thru the most points non-sense. It's rubbish. Here is the Wyckoff way:

Regular Uptrend Channel - drawn and extended from two higher lows and a parallel line that passes thru the intervening high (solid lines)

Regular Downtrend Channel - drawn and extended from two lower highs and a parallel line that passes thru the intervening low

(solid lines)​

Reverse Uptrend Channel - drawn and extended from two higher highs and a parallel line that passes thru the intervening low (dashed lines)

Reverse Downtrend Channel - drawn and extended from two lower lows and a parallel line that passes thru the intervening high (dashed lines)

Once you start drawing them correctly you'll begin to understand the benefits for judging the markets supply and demand characteristics.

 

Here's a good primer to the Wyckoff method:

 

Here is Part #2 of the above:

 

And here is the final part which includes P&F concepts, Part #3:

 

Rock, as always thanks for sharing your finds. I know its a lot of work finding those diamonds in the rough.

MOBL looks bullish but the structure is complicated and judging how to count it is subjective. I can see why you'd want a second opinion. I'm working on it but first, I know Bodacious is interested in ZNGA so I thought I'd post what that count might be. ZNGA may have a bigger longer term count but its probably prudent to break it down as I've shown below. So the base count gives a target of 8.25 which coincides with resistance at 8.10. The stepping stone count only projects to 7.05. It's always nice when the stepping stone projection matches the base count projection. But no, and the question is, will it go straight to 8.25 or will it build another stepping stone? If count what has built in the $6 area there are only 2 columns and 2 x $0.15 x 3 = $0.90. Add that to $5.85 (the low of the last column of "Os" and you get 6.75. Not enough to match the base count projection to 8.25. So if its going to build another stepping stone to shake out the weak hands then it will need more time to consolidate. Either way though, I'd trust that base count projection to 8.25 and use the vertical charts to time an entry but don't be surprised if it gets turned back at the $7 area to build more cause.

15-cent box by 3-box reversal P&F:

 

Rock, on MOBL, I used a 20-cent box and got $25, a close match to your 27.30. But, this is a bit complicated and you've mentioned this concept before and that is the idea that the float may have turned over during what I'm showing as a UTAD. Consequently I'm wondering how valid it is to count further back beyond the decline off the UTAD. I'm thinking it may be prudent to only count the structure I'm showing with blue labels which projects to 13.20, just above the all-time high of 12.96, which is still excellent. We'll have to come back to this one later and see if it builds a re-accumulation range with a target that matches the $25 base.

As an aside, it appears that the blue-labeled range is a period of absorption for the larger black-labeled range, that is, the CM absorbing sellers at resistance. So maybe the larger count is good, I dunno. But time will tell and in the meantime this looks strong.

On the weekly chart it appears to have knocked its head on the oversold line of the uptrend channel. Will need to look at the hourly or 30-minute vertical chart for timing.

I'm taking a road trip up to the farm, so may be out of pocket for few days.

Weekly bars:

20-cent-box by 3-box reversal P&F: