Wyckoff SOS in play
SOS—sign of strength, a price advance on increasing spread and relatively higher volume. Often a SOS takes place after a spring, validating the analyst's interpretation of that prior action. LPS—last point of support, the low point of a reaction or pullback after a SOS.
As we head to from phase D towards phase E we will see the greatest % gains.
PHASE-A
PS -Preliminary Support, the Composite Operator starts to buy the market, however, the downtrend is not yet complete. Volatility and volume are significantly increasing.
SC -Selling Climax, volatility, and volume boom as retail investors sell in panic. The price bottoms and that price level will later become the lower boundary of the accumulation’s trading range.
AR -Automatic Rally, the downtrend is now complete. The selling pressure is weaker and the Composite Operator continues to buy the market, therefore, there is a strong rebound. Depending on the extent of the previous downtrend, the early rallies can move the price up to 100%. The highs of this early rally determine the upper boundary of the upcoming trading range.
ST -Secondary Test, the Composite Operator stops buying and even takes some profits, the price revisits the bottom to test the dynamics of supply. Retail traders are now anticipating lower lows and thus they are selling everything. As the price bottoms for the second time, volatility and volume are significantly diminishing.
PHASE-B:
The second phase is characterized by moderate volatility and tight volume. The price is ranging between the highs of the early rally (AR) and the lows of the secondary test (ST). The Composite Operator is a careful buyer while the majority of retail traders are mainly bearish.
RULE: As mentioned before, the volume should increase on rallies and diminish during pullbacks.
PHASE-C:
The Composite Operator tests the remaining supply by shaking the price.
SPRING: The “spring” period misleads retail traders who believe a price breakdown and a lower-low are imminent.
Test— The Composite Operator tests the price for the last time. Nevertheless, if there is a considerable amount of supply, the market is not ready to take off, and another test may be on the way.
PHASE-D:
The fourth phase of accumulation is very bullish. Most indicators are showing highly overbought market levels and that makes a lot of traders wait for a correction before entering long positions.
SOS -Sign of Strength, the market finally breaks out of the previous range, volatility, and volume booms.
LPS -Last Point of Support, a price pullback after an SOS. Usually, the previous resistance act as support.
PHASE-E:
The price aggressively moves up, heading for a market top. Now retail traders start building their long positions. Market tops should be confirmed by record volumes.
Im buying up the fear and enjoying the entertainment along the way.... Best of luck and PEACE!
SOS—sign of strength, a price advance on increasing spread and relatively higher volume. Often a SOS takes place after a spring, validating the analyst's interpretation of that prior action. LPS—last point of support, the low point of a reaction or pullback after a SOS.
As we head to from phase D towards phase E we will see the greatest % gains.
PHASE-A
PS -Preliminary Support, the Composite Operator starts to buy the market, however, the downtrend is not yet complete. Volatility and volume are significantly increasing.
SC -Selling Climax, volatility, and volume boom as retail investors sell in panic. The price bottoms and that price level will later become the lower boundary of the accumulation’s trading range.
AR -Automatic Rally, the downtrend is now complete. The selling pressure is weaker and the Composite Operator continues to buy the market, therefore, there is a strong rebound. Depending on the extent of the previous downtrend, the early rallies can move the price up to 100%. The highs of this early rally determine the upper boundary of the upcoming trading range.
ST -Secondary Test, the Composite Operator stops buying and even takes some profits, the price revisits the bottom to test the dynamics of supply. Retail traders are now anticipating lower lows and thus they are selling everything. As the price bottoms for the second time, volatility and volume are significantly diminishing.
PHASE-B:
The second phase is characterized by moderate volatility and tight volume. The price is ranging between the highs of the early rally (AR) and the lows of the secondary test (ST). The Composite Operator is a careful buyer while the majority of retail traders are mainly bearish.
RULE: As mentioned before, the volume should increase on rallies and diminish during pullbacks.
PHASE-C:
The Composite Operator tests the remaining supply by shaking the price.
SPRING: The “spring” period misleads retail traders who believe a price breakdown and a lower-low are imminent.
Test— The Composite Operator tests the price for the last time. Nevertheless, if there is a considerable amount of supply, the market is not ready to take off, and another test may be on the way.
PHASE-D:
The fourth phase of accumulation is very bullish. Most indicators are showing highly overbought market levels and that makes a lot of traders wait for a correction before entering long positions.
SOS -Sign of Strength, the market finally breaks out of the previous range, volatility, and volume booms.
LPS -Last Point of Support, a price pullback after an SOS. Usually, the previous resistance act as support.
PHASE-E:
The price aggressively moves up, heading for a market top. Now retail traders start building their long positions. Market tops should be confirmed by record volumes.
Im buying up the fear and enjoying the entertainment along the way.... Best of luck and PEACE!