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Wyckoff Trading Method
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Wyckoff Trading Method

  #761 (permalink)
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30 minutes 6E

HI Gary, this is a very basic forecast analysis of 6E, I am wondering if it is the right way to understand Wyckoff wave.

would you please comment?

thanks

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muscleman View Post
Gary, thanks a lot for your comments. I think this is getting interesting.
For stocks, I think the market cap is more important than the share price. If the market cap is large, it is impossible to manipulate even if the share price is $1. For example, if MSFT announces a 1:33 split, per share price will be less than $1, but does this mean some random person can manipulate it? Clearly not. MMT's market cap is over 300 M, so I think it is probably hard to manipulate. Usually how small is the market cap do you think can be easily manipulated?

Looking at BAC's monthly chart, the first chart is the run up to $56 high. Is there any clue that is the top to get out? The previous two years of volume seems steady each month.

The second chart is the run down and stablizing after making the $56 high. We somewhat formed a double bottom in 2009 and in 2011, and each bottom's volume is much higher than the average time. The most recent month is a down month, but volume is low. Does this mean anything? Wyckoff's method says if the trend is down, ideally all the down bars should have high volume and all the up bars should have lower volume, but sometimes I do see a trend going steadily with low volume, but just keep going in that direction, such as the entire 2011 for BAC, or the recent surge in ES from December 2011 to now.

I'll respond to this after the market closes today. Just briefly, there are many stocks that are either "overvalued" or "undervalued" based on certain criteria. But as a technical trader, I can't give that much credence. because if a stock is worth $30 but trading at $1, there's a reason why it's trading at $1. Price is key as it shows what the stock or commodity is worth at the present time.

Gary

There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
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  #763 (permalink)
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supermht View Post
HI Gary, this is a very basic forecast analysis of 6E, I am wondering if it is the right way to understand Wyckoff wave.

would you please comment?

thanks


The most recent "Climactic Volume" you marked is actually your sign of weakness, and not climactic volume. The sign of weakness characteristic is increased volume and increase bar length. Climactic volume would indicate the ending of a trend. It is part of the process of distribution, as you identified in the rest of the chart. Everything else I agree with. Good job!

Gary

There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
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  #764 (permalink)
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Gary Fullett View Post
The most recent "Climactic Volume" you marked is actually your sign of weakness, and not climactic volume. The sign of weakness characteristic is increased volume and increase bar length. Climactic volume would indicate the ending of a trend. It is part of the process of distribution, as you identified in the rest of the chart. Everything else I agree with. Good job!

Gary

Gary,

Wouldn't an increase in bar length as well as volume be a bullish sign? Is it weakness in this case because of the resistance level to the left it could not close above.

David

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  #765 (permalink)
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David_R View Post
Gary,

Wouldn't an increase in bar length as well as volume be a bullish sign? Is it weakness in this case because of the resistance level to the left it could not close above.

David

In the example presented, he showed a buying climax. The subsequent action after a buying climax would be a sign of weakness if the bar length and volume increased. This would not be bullish. The key would be the retest after this bar if it is weak or not. If the rally is weak (light volume and small price range), this would then lead to LPSY. If the market takes out the buying climax area and begins to mark up, that wide bar and high volume would be considered a shakeout bar.

Gary

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  #766 (permalink)
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Gary Fullett View Post
I'll respond to this after the market closes today. Just briefly, there are many stocks that are either "overvalued" or "undervalued" based on certain criteria. But as a technical trader, I can't give that much credence. because if a stock is worth $30 but trading at $1, there's a reason why it's trading at $1. Price is key as it shows what the stock or commodity is worth at the present time.

Gary

Thanks a lot in advance. I appreciate your help!
My $1 example was trying to say that if MSFT does a 1:32 stock split, it will trade at $1, but still no one can manipulate it, so may be it is better to use market cap instead of stock price to determine if a stock is suitable for Wickoff analysis?

Now looking at BAC again, I think I am confusing long term (5-10 year pattern) to intermediate term (6 month - 1 year pattern). What I really meant was that in the very long term BAC doesn't look bad, but in the intermediate term, it actually looked like a good short candidate. Buying climax at $10, and now heading down. Sideways looks like a re-distribution pattern. Do you think so?

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muscleman View Post
Thanks a lot in advance. I appreciate your help!
My $1 example was trying to say that if MSFT does a 1:32 stock split, it will trade at $1, but still no one can manipulate it, so may be it is better to use market cap instead of stock price to determine if a stock is suitable for Wickoff analysis?

Now looking at BAC again, I think I am confusing long term (5-10 year pattern) to intermediate term (6 month - 1 year pattern). What I really meant was that in the very long term BAC doesn't look bad, but in the intermediate term, it actually looked like a good short candidate. Buying climax at $10, and now heading down. Sideways looks like a re-distribution pattern. Do you think so?


A stock that trades from the mid-fifties to five dollars can not be considered a bullish stock in any time frame. BAC may have bounced from $5 to $10, but when you look at the big picture, if you wanted to be bullish, it will take a very long time to overcome the bearishness of the stock. If this was a stock that was in R&D and had a "wonder drug" coming out, then maybe you could see a retest back to the highs quickly. But considering this is a very largely held institutional stock, it would take a complete turnaround for this to become bullish again IMO. So to me, this stock will stay in a trading range for a long time.

Regarding manipulation, I would agree with you regarding your example with MSFT. I am basically responding to the technical aspects of the market and how low priced stocks can be manipulated with greater ease than a more established stock. When I refer to manipulation, this doesn't mean that it's illegal. Stocks are manipulated every single day, but most times, legally.

Gary

There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
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  #768 (permalink)
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Gary Fullett View Post
A stock that trades from the mid-fifties to five dollars can not be considered a bullish stock in any time frame. BAC may have bounced from $5 to $10, but when you look at the big picture, if you wanted to be bullish, it will take a very long time to overcome the bearishness of the stock. If this was a stock that was in R&D and had a "wonder drug" coming out, then maybe you could see a retest back to the highs quickly. But considering this is a very largely held institutional stock, it would take a complete turnaround for this to become bullish again IMO. So to me, this stock will stay in a trading range for a long time.

Regarding manipulation, I would agree with you regarding your example with MSFT. I am basically responding to the technical aspects of the market and how low priced stocks can be manipulated with greater ease than a more established stock. When I refer to manipulation, this doesn't mean that it's illegal. Stocks are manipulated every single day, but most times, legally.

Gary

Thank you Gary.
Your comments as well as my own judgements from the daily volume chart shows that BAC is bearish at least in intermediate term, so I am thinking maybe it is time to consider a short position.
After dropping about 20% from $10 to $8, it is in a sideways market for the past 6 days. Now the question is whether this sideways move is a re-distribution or an accumulation?

Please see my attached chart, which is the 15 minute chart for the past 5 days. I am trying to figure out signs that market manipulators trying to build short positions, but it is kind of unclear to me. Could you please take a look?
Wyckoff says that this is usually unclear until near the end of the accumulation/distribution phase, so maybe we should just wait for a few more days?

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muscleman View Post
Thank you Gary.
Your comments as well as my own judgements from the daily volume chart shows that BAC is bearish at least in intermediate term, so I am thinking maybe it is time to consider a short position.
After dropping about 20% from $10 to $8, it is in a sideways market for the past 6 days. Now the question is whether this sideways move is a re-distribution or an accumulation?

Please see my attached chart, which is the 15 minute chart for the past 5 days. I am trying to figure out signs that market manipulators trying to build short positions, but it is kind of unclear to me. Could you please take a look?
Wyckoff says that this is usually unclear until near the end of the accumulation/distribution phase, so maybe we should just wait for a few more days?


It appears to me that from your chart, the waves to the downside are more pronounced than the waves to the upside. Meaning, as large interest built a bearish position, they will defend resistance, and this stock appears to be doing that. As mentioned earlier, I think BAC will have a prolonged trading range.

Gary

There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
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Gary Fullett View Post
It appears to me that from your chart, the waves to the downside are more pronounced than the waves to the upside. Meaning, as large interest built a bearish position, they will defend resistance, and this stock appears to be doing that. As mentioned earlier, I think BAC will have a prolonged trading range.

Gary

It is a bit confusing to me because things seem to be quietly changing to the bullish side. Today we see health volume pushing the stock up. As we approach the close, the stock pulls back with much lower volume. I think this says that the tide probably have turned, and we may see the stock going back to $10 soon?

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