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The S&P Chronicles - An Amalgamation of Wyckoff, VSA and Price Action
Just opened this thread to myself, really great to see somebody practicing Wyckoff and VSA so professionally I would say..
One fast question here: doesn't low supply can mean low demand as well?? I've just finished Tom Williams "The undeclared secrets..." - and it's said the same: "low supply". Can you explain please?
An excellent question. The answer is relatively simple ''Background Conditions'', if we come from strength i.e a decent wave up, a true sign of strength bar, a spring etc we can say that demand is in control. If the market proceeds north and finds resistance and we hold (react weakly) spreads start to narrow, volume declines, we would classify as a lack of supply. Selling should emerge at resistance ''through dis-confirming supply, we get the confirmation of demand''.
If the market shakes out weak longs or has finished accumulation price can appear to levitate up with very low volume, this doesn't mean the lack of demand. If supply has been eradicated, there will be no upside friction, no selling contracts to absorb by the buyers, this enables the buyers to drive the market higher with very little volume.
In a nutshell its all about the back ground conditions, we need to see clear evidence that either demand overcomes supply (or vice versa) and when the opposing force has an opportunity to react or rally - we analyse the quality/strength of the buying/selling behaviour. If you work your way through the Chronicles you will find various in-depth trades in the correct context that should solidify your knowledge on this topic
Wyckoff and VSA principles at play in today's action:
Multiple Time Frames
Waves
Effort vs. Result
No supply (setup; waves) Reverse use of trend line
Strcuture
Testing
Relative and Comparative Analysis (Often neglected Wyckoffian attribute)
@Feibel
Hi Sir ,
I am novice and still trying to learn/master Wyckoff , your writings are of great help. Its absolutely amazing what your doing here. However sometimes I have difficulty understanding everything. Do you take training/webinars or some kind of mentoring. I had love to if you do. If not can you please suggest me a place where I can learn the principles first and then it will be easy to understand your writings more clearly.
Appears to be a whacky market (probably a currency)
To be honest I cannot read the volume on your chart or the price action that clearly, however the shakeout bar is clear (more than likely news driven) and the price action prior resistance is kind of grinding up. Yet as we begin to drive through drive through those 2 resistance areas, price action becomes a little messy and awful to read. Price does push higher, but is far from a low volatile grind up due to the lack of supply, there is much price bar overlap, big spreads, smalls spreads, closing low, closing high etc.
Wyckoff and VSA principles at play in today's action:
Change of Behaviour (setup)
Continuation/trend trades (setups x2)
Waves
Structure
Overbought and oversold conditions Reverse use of Trend Lines
Shortening of the Thrust
Multiple Time Frame Analysis
Hypodermics?
No demand (waves)
Hello.
First a huge thanks for the time you take to share these.
A question from the Chronicles from 16/01/2018.
This leads to bar D – Entry 1, why? We have a plethora of reasons; price is unable to reach the
supply line from our channel with price holding a reverse use (double bearish) we break the demand
line from our channel and local support to C (double bearish). The wave down (59k orange HL) is a
’’change of behaviour’’ draws out the largest downside volume and wave down (double bearish).
NOW we wait for weak rally to short, which prints at D (an upthrust) a sign of weakness in itself.
I see the wave down and I recognize that it has the most down volume since the up move began. I know we should also be looking for a weak rally to try and short. What I don't see is how D is an upthrust? What are we upthrusting? I see the line you have drawn from the reaction low, but unclear how that would be so significant.
Thanks for your time.
Second quick question. What settings would you recommend using for the CL to recreate a chart similar to your 3500 tick with .75 WW in the ES?
An excellent question: it's a nuance of structure that I like to use. When the market turns as it does to C, I am looking for a local level of resistance to trade against. Due to the lack of demand at the highs (12k and 12k) after the move to C, its highly unlikely that price will test the highs again, as we know there is no demand (not enough force)
For whatever reason the market has respected the local level of support 3 times, then as we reverse to break, note the price action - spread has increased closing weak on its lows. This gives the level validity (as we know it takes force to break support or resistance) When price rallies back to resistance the spreads have narrowed considerably, more or less into the 50% range of the down bar and prints a lovely little upthrust of the local resistance. For all intents and purposes we could name the bar a ''key Reversal'. As previously stated the labelling is unimportant.
The use of tick charts provide subtleties of structure and clarity that the 5m does not possess, especially in volatile conditions. This is the main reason I prefer tick chart structure to the 5m
CL settings $0.05c (5 cents) and between 750 to 900 ticks. When the AVT is higher than normal switch to 900 ticks.
Wyckoff and VA principles at play in today's action:
Spring (setup)
Upthrust (setup)
Accumulation/buying zone
Bar by Bar Analysis
Shakeouts
No supply (setup)
Overbought and oversold conditions
Volume aberrations
Structure - triple Confluence
