Welcome to session 10 of the Wyckoff Recession Survival course.

We're going to
start off with Babcock International. BAB is the ticket and it's a US listed
security. So I hope by now already we're only at session 10 of the course, but
you're already seeing the value of this course in terms of looking at the
distribution structures at the top of the market and also the accumulation
structures at the bottom of the market and just how this might be able to benefit
you in practical terms as well as theories we're studying now. But we've got to
have that knowledge base. We've got to build that knowledge base up. So let's get
into it with Babcock. Could have had a 50% decline from the top here where I've
shown down to the low. And then we could have been buying in after a bit longer
phase accumulation range that took to develop. So it could have been buying in
phase D there and had a 72% gain in 18 months or so. So let's look at the
distributional structure for Babcock first. So as you know, we have a very
climactic run into the preliminary supply there, and you can see that by the CO
volume signature. There's then a move into the buying climax and note on the
buying climax, there's an increase in volume and also we see the supply shoots
there suggesting some kind of a pullback as well. We then have the change of
character move into the automatic reaction, and we can see that the CO is
distributing there by the increasing volume signature. We then have weak demand
that follows into the secondary test. So from the AR into the secondary test, you
can see the weak demand there. As we then progress through the trading range into
phase B, we have a weak hands rally into the upthrust followed by the CO
distributing, so selling off the top again. So you can see this rally here into
the upthrust is then followed by the CO selling off the top into the sign of
weakness, as noted by the volume signatures. We then have a prolonged weak demand
rally followed by the CO selling off the top again at the upthrust after
distribution. So we have this long rally here longer than the one we had from the
AR into the upthrust, which suggests that the CO is pretty inactive there.
They're not really buying, they're not selling either. And then we have a pickup
in volume and supply there as we have a decline of the upthrust after distribution.
So the CO selling off the top again. We then have demand exhausted as we come into
the LPS. So throughout here, you can see that demand exhausted, followed by a
pickup again as the CO then sells into the major sign of weakness. And as noted at
point number five, climactic price swing, a possible change of character there. So
we're looking for a trading range to then develop. So let's move on to the
accumulation structure. So number one, note the apex nature to this accumulation
structure. We always want to be aware of apex formations, whether they're in
accumulation or distribution. So number two, we have climactic price swing into AR
acts as the change of character and note the significant demand tails at the
selling climax that come on that increasing volume signature as well. We have more
supply tails, sorry, demand tails that should have been at the selling climax and
at the secondary test as well on a slight pickup in effort that you can see there.
So demand is present again, helping form that lower high, lower high. We then have
a pretty strong phase B as noted by the minor sign of weaknesses. OK, so remember,
we're looking for that strength in phase B if it's going to be a reaccumulation or
accumulation structure. Number three, we have increasing supply yet structural
higher low for the LPS. So you can see that we have this pickup in supply here
prior to the LPS and the test and both form high low. So structurally, this is
bullish. We're making higher highs as well. These regions where I'm circling now
and we're making lower highs as well. So structurally, this is very bullish and we
can see that supply decreases for the test and also supplies and decreasing for the
major sign of strength, which is a higher high. And the backing up action, as we
discussed just now, is a higher low. So structurally bullish. And this happens
also on diminishing volume. So suggesting that supply previously in the prior
phases, in particular phase A and phase B, supply has been absorbed. So let's move
on to example number 13, which is Boeing. So we're on to Boeing now. So from the
top to the bottom, minus 73 percent. And from buying in at phase D, could have had
a 229 percent gain. You can see the kind of persistency of the trend channel that
emerged. So let's look at the distribution structure. So number one, leading
stocks undergo distribution on the way up and can be difficult to correctly
analyze. Until much later in structures. However, the significant selling in phase
phase C was a key clue. The CEO was distributing large amounts of shares. So as I
said in some prior examples, distribution on the way up looks like the trending
environment. And it's not until we start getting more of the data points in phase
C and phase D that we actually see there's a distribution structure forming and
then we act accordingly. But in any event, take for here, for example, at the
upper end, we wouldn't be buying, applying the Wyckoff methodology, we wouldn't be
buying in the upper part of that trend channel anyway. We'd be waiting for the
oversold conditions. So potentially here, but there's no reversal. So we'd be
buying on the reversal back in. So we actually wouldn't have even been buying down
here at the break. Again, follow the process, stick to the process. So number two
rally ends more because of demand being exhausted instead of significant supply by
the CEO. So you can see that the supply is just diminishing. So sometimes these
upward rallies can just end because demand becomes exhausted. We then have a bit
of a change of character. I'm going to go back to my pen. It's a bit of a change
of character here. This is the largest decline that we see within the prior
uptrend. So we're now on alert that some form of trend channel or trading range
might develop. Point number three, supply increases significantly as CEO starts
selling off the top at the upthrust and upthrust after distribution. So you can
see in this region here, then going down, we can see that supply is increasing. We
know it's the CEO selling because of the size of the volume signature. Point
number four, most severe decline seen on high volume. So we're talking about the
decline from the upthrust after distribution into the sign of weakness. This
decline here, this is the largest one that we see within the prior uptrend, larger
than the buying climax to the AR. So if you imagine it, we've got a change of
character here and then we almost have a confirming change of character is quite a
good way to look at it. We then have the LPS wise failing to return back into the
trading range on relatively weak demand, followed by an increasing supply as the
downtrend now persists. So a few clues there. One of the key ones is noting the
selling off the top in phase B at the upthrust and phase C, the upthrust after
distribution and the size of the decline in phase D from the upthrust after
distribution into the sign of weakness. And then the failure for the LPS wise to
rally back into the structure. So let's look at the accumulation at the bottom. So
you know, we've got two structures here, so we're going to go through them both.
It's not uncommon for reaccumulation structures to form in phase D and E of
accumulation structures. Entering on the spring of the reaccumulation structure is
optimal in terms of risk versus reward and high probability of success. So we're
noting in particular this area here, which would be phase C of our reaccumulation
structure shown in blue. But it would be more of a major backing up action within
phase E of the original accumulation structure. So just something to note as we go
through as well. And when you work through the blank charts, the ones without my
annotations or labelling on, just note where these reaccumulation structures form
in accumulation structures and variably they'll be in phases D and E. So number
two, note the climactic volume swing price. So sorry. So again, climactic volume
and price swing, that should say, is a key indication absorption is happening. So
you can see on the way down within the region here in phase A, note that the
selling climax price swing into the AR is the largest that we see of in the
downtrend comes on that increasing volume signature as well. Number three, we see
significant effort yet price hold support at the LPS. So here and you can see that
very large volume bar. So again, think effort versus result. And also just note
that supply throughout phase B where we have this ST as a sign of weakness and
beyond is decreasing throughout phase D. So number four touches on that supply
decreasing throughout phases. So that's absorption by the CO, which is what we
want to see. What we have here as well, which I'm going to touch upon, is we have
this kind of trend channel forming out of phase C. And just note that when we come
to the buying climax and shake out of the phase A of the reaccumulation structure.
So this is our reaccumulation structure in the blue, blue in brackets. Note that
this is the largest decline that we see and it comes on a bit of increasing supply
as well. So we're expecting some form of pullback in trading range to develop
there. And as we progress throughout, note at point number six, significant effort
on spring yet price struggles to commit below the shakeout and CO demand is
present. So what we're talking about at the spring here is just note how price
struggles to go below the shakeout
level, even though we've got that increasing effort. So again, think effort
versus result. Is the intention fulfilled? No. Price holds. That means there's
significant amounts of demand there. And then at point number seven, note again how
volatility decreases after phase C in the reaccumulation structure. So if we were
to just look and I'll change my colour for this. If we were to look at the
volatility in this structure compared to the volatility of this structure. So
we've got one and two. So we're splitting the trading range in half. Note how
after we've been through the absorption in the first half, the second half, the
volatility greatly decreases. And this kind of laboured move into phase D breakout
as those waves, if you like, start decreasing. And again, here we have effort up.
But what's the result? OK. Is the intention fulfilled? No, it's not. Price is able
to remain high and then eventually breakout afterwards. So note those
reaccumulation structures forming within phases D and E of the original
accumulation structure. Next, we're going on to Barrett Developments, which is one
of the largest house builders in the UK. So very large decline of 97 percent. I
don't know many people that would sit for a 97 percent decline in their money. And
then a very big gain from where the phase D backing up action was at 584 percent
over the preceding years. So here's the structure again. And it's one where it's
this upsloping trend channel kind of structure. What we can notice that's quite
significant, just change my ink colour back to red, is the change of character. So
the decline from the buying climax into the AR suggesting some form of trading
range is going to now start unfolding. And then obviously we have the confirmation
of the change of character in phase C and D here. Let's just get rid of that
scribble. So note that number one, demand is low. So the CEO is pretty inactive
during this part of the start of the rally. So CEO doesn't always have to do
anything. Sometimes they can just sit back and watch. At point number two, we have
demand exhausted, followed by the CEO selling off the top. And important to note
at point number three is we see a significant increase in effort yet price
struggles to make new highs, followed by the CEO distributing. So we're talking
about the region in phase C. When I get the highlighter. OK, significant effort,
particularly on this bar here. But yet price struggles to start making new highs
relative to the first high in the phase C at this point here. So again, we're
thinking effort versus result. There's a lot of effort there to push prices up.
But yet price is reluctant to go up. So suggesting there's a lot of supply coming
to the market. Then we see at point number four, volume significantly higher price
makes lower highs and lower lows. So the CEO is distributing. So that's then
looking at the change back to the pen. That's then looking at these highs here.
You'll just note the continual lower highs all the way down. And then we see lower
lows as well. I'm just highlighting there. So the trend is significantly to the
downside and then we have no demand into LPSY rally. So that's looking at this
structure here. Then I'm about to highlight this structure here. There's no demand
followed by that increase in supply as the move to the downside continues.
Hopefully you can make sense of my scribbles. So now let's look at the accumulation
structure. We've got two to look at for Barratt. So number one, number on the
daily log here. So number one, first signs of significant CEO demand, note volume
and demand tail. So in particular, we're looking here. So note the two very large
demand tails and the very large volume signature as well. So suggesting there's
some preliminary support coming in there by the CEO. Then what we have again is at
the selling climax, we have pretty climactic volume. So more CEO absorption
followed by an increase in demand into the AR. So the AR rally is obviously the
largest that we see within the prior downtrend. Number three, what we can then see
is long term supply decreasing into the LPS and test and the test is a successful
higher low. So just note the absorption that happens. And this is one of the
really key things I want you to take away. Well, there's a lot of key things to
take away. But one of these as well as when we're looking at these accumulation
structures coming off of the downtrend, we want to know absorption and we want to
know no price volatility decreasing. So you can see this long term absorption
happening by the volume signature decreasing. We have the LPS and the test and the
test is a successful high low. And then note in the second half of this trading
range again after our phase C, if we were looking at this as number two. And this
as number one, just note how that volatility has decreased with that absorption of
the supply. Then what we can see in phase B is this rally in here, CEO
participating in rally because we can see the price spread increasing. We can see
the demand coming through in the volume signature as well. And we can just see how
volatility on this rally for the breakout is very low comparatively to the price
swings we've had previously. So let's look at the longer term accumulation
structure for Barrett. So, again, it's this kind of apex structure. And what I
want you to do is note the strength in phase B as well. So if we were to just draw
a line across the middle, OK. Strong phase B. OK. We have a minor sign of strength
in here as well. So number one, be aware of long term structures developing on
different time scales. So the one we looked previously was the daily time frame
and this one is the weekly time frame. So we need to be aware of price structures
developing across multiple time frames and obviously cause and effect. So the
bigger the cause, the bigger the effect. And we're going to see those bigger causes
develop on the longer term time frames. So just note structurally as well. Go to
the highlighter. We've got lower highs forming. OK. And also higher highs too. So
structurally very bullish. And as we saw on the previous structure, we see that
increase and then that long term decrease in supply coming to the market. So
structurally very bullish. Next one up is BlackRock. So you could have had a 61
percent decline in your capital and then buying in a phase D, you could have had a
159 percent gain over the preceding years. So here we go. We've got this small
reaccumulation structure that forms in blue before we go into the distribution
structure. So do just analyze the reaccumulation structure yourself. In
particular, notice the increased effort yet price fails to commit below the
secondary test lows in the reaccumulation structure in phase B. So obviously you
think effort versus result. We can see the significant demand tails as well. There
we then have the test as a higher low on significantly decreased volume, which is
bullish. So obviously we have that increase followed by that decrease in volume,
which is what we want to see shows absorption has happened. And then note what I
want you to do is note where I've circled here. Note how the structure transitions
into the distribution structure. So you can see that increase in volatility. In
this region, so volatility, vol increases. This acts as a change of character as
well into the AR. So note how the texture and volatility changing into the
preliminary supply and buying climax afterwards. CO is selling off the top there.
So point number four, we have large effort yet failure to commit above resistance
on the secondary test. So the area that we're looking at is these volume bars here
in the secondary test. And you can note the demand tails as well on this secondary
test. OK, looks very bullish, but yet price fails to overcome the buying climax
and just about gets above the primary supply. And also note just before there as
well, another supply shoot. OK, so when you start seeing supply shoots, OK, going
into the resistance that comes on increasing volume as well. You know, there's a
lot of supply up there and a pullback is likely. So number five, we've got a
demand week followed by the CO selling. So the rally into the upthrust in phase B.
This part here. So the rallies into upthrust action in phase B are weak. And then
what we see on the decline is very large volume, increasing volume. So the CO is
selling there. What do we see after that into the upthrust after distribution
rally? Note these very large volume bars again. So demand there, a lot of effort.
But is price able to overcome the prior resistance? No, it's not. So we interpret
that effort versus result as bearish. The intention is not fulfilled. And then we
see at the top, number six, we see weak demand followed by the CO selling. And
then obviously note how the volatility in this latter part of the trading range,
OK, greatly increases as price moves to the downside bearish. So this is
BlackRock on the accumulation structure at the bottom. So note the selling climax
into the AR is the largest price swing that we see. So a change of character. So
it's the largest rally seen within downtrends, suggest change character, as I just
said. We then have the move into the secondary test and note on that second bar,
the very large demand tail as well. So you just need to be able to contextualize
and the candle bars themselves can really help you to understand what was going on,
whether that's a daily, weekly, hourly, logly, daily, weekly or hourly, any time
frame, any bar really. And you can obviously take what we're learning here and you
can apply on intraday time frames as well. If you're a day trader or however you
trade, this knowledge is applicable across all time frames. So number two,
increased effort
yet no commitment below previous ST or selling climax. So we're looking at this
part here in phase B. OK, see that huge increase in effort. Yet is the downwards
intention fulfilled? No, it is not fulfilled. So then we come into the spring and
you'll note a bit of an increase in volume into the spring or a bit of an increase
in effort as well. Priced does undercut the STs and the selling climax, but yet
look how quickly it reverses on these significant bars. OK, so we're looking at
this bar here and this bar here. OK, so we can call these significant reversal
bars. Hopefully you can read my scribbles or hydroglyphics. And then what we have
after there is the trend channel merges with higher highs and higher lows on
increased volume, which is structurally bullish. So demand is present. So now
we've got these higher highs forming and these higher lows forming as well. So
structurally bullish and hopefully again in a lot out of this and starting to see
where these structures develop. So again, it's being able to contextualize and
tell the story of the stock. So last one for this session, we're going to look at
Burberry BRBYs, the ticker. So this structure here is actually a kind of it's an
intermediate redistribution structure or we could just call it a distribution
structure. So it's redistribution. Why is it redistribution? Because it's
happening in the context of a prior downtrend. So you could have lost 61 percent
of your capital buying this final peak here and buying in phase D could have made
two hundred twenty one percent in the coming years without doing anything. Not
bad. Right. So weekly log chart here. Let's have a look at it. So what we're going
to do is look at the this is the first distribution structure. OK, and then this
here was the I'm just going to call it redis. That was the redistribution structure
in blue. So as we come into the preliminary supply and the buying climax, note the
rally ends more so of exhaustion. As opposed to very significant supply, so you
can see that rally ending because of exhaustion. What we have at the upfrost of
the sorry, the upfrost in phase B of this structure here, we have a week rally,
followed by the CEO selling off the top, as can be noted by the by the volume
signature there and the sign of weakness. We then have another week rally attempt
into the LPSY. You can see that there, OK, followed by the CEO distributing on the
way down and just note the severity of these two declines. So if we were to call
this change my ink color, we would call this decline number one and decline number
two. OK, we haven't seen anything like that previously within the uptrend
structure and as the structure started to unfold as well. So definitely a change
of character, change of behavior and note the significant demand going into the
intermediate selling climax. Get my highlighter back. OK, very large volume going
into the intermediate selling climax. So what we're then trying to do is ascertain
whether this is going to be a accumulation distribution structure. One of the
tells was if you look at phase C, the upfrost after distribution and this topping
process into the sign of weakness. Know how volume is significant. Effort is
sorry. Effort is significantly increasing and volume is as well. And then in phase
D, note all of the supply shoots that you can see there and on the failure into the
major sign of weakness. Again, we can see supply increasing. So a lot of weakness
there throughout. So this is then the accumulation structure that happened for
Burberry. So number one rally after preliminary supply is the largest within
downtrend and suggests nearing and suggest change of character nearing. So I think
that should have said the selling climax. So it's this rally here that we're
looking at into the automatic reaction after the selling climax. So number two,
no, no high effort on volume bars prior to the selling climax and limited downward
result. So this is a this is a pretty important point to note as well. If you're
really trying to pick the bottom, obviously much harder to do need those tape
reading skills. So just note here on the bar before we reverse, there's this large
red bar in here and you'll note the significant volume. It's actually got one of
the highest volume bars that we see previously or up to that point. And yet what
is the downwards result? What's the result? Is the intention fulfilled? No, it's
not. So there's significant effort there. And then we get the AR rally afterwards.
We then have supply being absorbed throughout this range here. And as we then go
into the ST in phase B, the increasing volume signature. But yet we make a high
low. So structurally, this is looking bullish, that increase effort yet structural
high low. And there's a pretty quick reversal bar in that. OK, that's our reversal
bar. And then number five, supply decreases into LPS, followed by increased
demand. So one of the things we've been touching on a lot is that decrease of
supply into the face LPS or spring, followed by the increasing demand. And you can
note the trending environment that was unfolding. So the higher highs and higher
lows. So number six as well, just finally note that horizontal levels of support
and resistance can help add additional context and benefit Wyckoff analysis to take
for Wyckoff analysis to take trades at optimal times. So in this structure, it was
quite good to have those horizontal lines as well as the upward sloping as well.
You'll note how well the LPS in this region found support at the preliminary supply
and also found support at the bottom of this upward sloping structure as well. So
kind of adds even more conviction. So that's it for this session. I look forward
to seeing you in the next session where we're going to start off with Warren
Buffett's company, Berkshire Hathaway.