Sandbox

[BlowFish 10]

Always nice to see someone talk about trades at the hard right edge. Charts are nice and clear, I also like how you have written the commentary on the charts, it makes it nice and easy to follow. I also appreciate the comments on risk, and why you are staying with this trade. I for one shall be watching with interest. Good luck with the 'journal'.

[rollotape9 10]

Hi Rollotape,

 

The figure chart (short-term, 10-point) indicates that the uptrend since the March lows has run out of cause. There was a count across the 750 line and a Stepping Stone count along 780 that targeted the present levels of the ES.

 

 

Eiger

 

Hi Eiger,

 

I love your PnF chart. I have posted my SnP cash PnF chart of the potential downside objective of 780 using a 10 x 1 chart if this Upthrust leads to an important reaction. It is interesting that this downside objective goes to about the 1/2 point of the entire move from the March low and is where the minor support from the end of March is located.

 

Also, I love your use of swing lines on one of your other charts. Very few people realize that Wyckoff, himself, would look at charts in this manner. I use swing lines on my charts as well to help me to objectively determine the trend, which as you know according to Wyckoff is the most important thing to know.

 

Rollotape

[rollotape9 10]

I admit I'm not familiar with Bob Evans' adaptation of the Wyckoff method, but from what I've read in the last couple of posts, it seems this 'version' has a lot in common with VSA.

 

 

Hi firewalker,

 

Wyckoff, himself, would analyze the message of the market from individual bars at certain times. We get a pretty good idea of how Wyckoff analyzed a market in this way from Section 7 of the Wyckoff course which I believe is posted on this forum. This section is one of my favorite in the Wyckoff course.

 

My method of trading is totally Wyckoff based even though I may use terms originated by Bob Evans like creek, ice, springs, one-eyed Joes, jump across the creek, break under ice, among others to describe market action that Dbphoenix correctly pointed out. I used the terms because I figured everyone here was familiar with them. I did not mean to confuse anyone with the use of these terms so I want to apologize to all readers and to the moderators of this forum for using them. I just figured it was simpler to describe market action in this way.

 

I could have just as easily said that the minor buying waves were showing a shortening of upward thrust as Eiger pointed out in his analysis as the SnP approached an important resistance area from late January/early February. The SnP marginally rallied above this resistance area and a minor resistance area of a little upward wedging trading range moving into an apex position but was unable to provide upside follow-through as supply overcame demand leaving behind a potential upthrust (Wyckoff did use this term in his original writings). The effort vs. result principle that I mentioned in my original analysis is a Wyckoff principle and not a Bob Evans principle. All Bob Evans did was come along and create some terms to help him better understand and describe the market actions that Wyckoff taught.

 

Once again, I want to express my sincere apologies for any confusion.

 

Rollotape

[rollotape9 10]

Thank you for the elaboration and clarification. As you note on your first chart, however, most of your analysis is based on Bob Evans and not Wyckoff (there are no springs, creeks, ice and so forth in Wyckoff's course). While some members may find Evans' adaptations useful, they are not consistent with the content of the Wyckoff Forum as a whole, focusing as it does on Wyckoff's original course.

 

In order to avoid confusion, therefore, I've retitled the thread. This will enable those who are interested in discussing Evans to do so without getting into unnecessary debates about what is or is not Wyckoff.

 

Hi Dbphoenix,

 

I apologize for opening up a can of worms. Can we compromise and retitle this thread the "Wyckoff/Evans Newsletter"? Although I used some terms that you correctly pointed out originated from Bob Evans, the analysis is still Wyckoff. Bob Evans merely came up with some terms to help him describe market action that was taught by Wyckoff. As you know, the effort vs. result principle is not a Bob Evans principle. Also using the principle of selecting stocks based on relative strength/weakness is not a Bob Evans principle either. Future stock charts to this newsletter will show this Wyckoff principle at work. I will also be glad to show my swing charts in future charts since we both know that comparing alternating buying/selling waves to determine the strength/weakness of a trend, was part of the foundation of Wyckoff.

 

Thanks for understanding in advance,

Rollotape

[rollotape9 10]

Always nice to see someone talk about trades at the hard right edge.

 

Hi Blowfish,

 

I am glad you like the charts. The hard right edge is where I live.

 

Rollotape

[rollotape9 10]

Hi everyone,

 

The attached spreadsheet is how this newsletter will track all real-time trades. I hope everyone likes how it is presented. If you don't, too bad.

 

Rollotape

Traders Laboratory portfolio 050109.xls

[Tams 20]

Hi Dbphoenix,

I apologize for opening up a can of worms. Can we compromise and retitle this thread the "Wyckoff/Evans Newsletter"? ...

 

 

 

 

don't worry about the title...

 

it is the substance that counts.

 

 

Rock on!

[DbPhoenix 42]

Hi Dbphoenix,

 

I apologize for opening up a can of worms. Can we compromise and retitle this thread the "Wyckoff/Evans Newsletter"? Although I used some terms that you correctly pointed out originated from Bob Evans, the analysis is still Wyckoff. Bob Evans merely came up with some terms to help him describe market action that was taught by Wyckoff. As you know, the effort vs. result principle is not a Bob Evans principle. Also using the principle of selecting stocks based on relative strength/weakness is not a Bob Evans principle either. Future stock charts to this newsletter will show this Wyckoff principle at work. I will also be glad to show my swing charts in future charts since we both know that comparing alternating buying/selling waves to determine the strength/weakness of a trend, was part of the foundation of Wyckoff.

 

Thanks for understanding in advance,

Rollotape

 

Given that your purpose in initiating the thread was and is to solicit contributors to your newsletter, and given that you and Eiger are on the same wavelength with regards to Evans, Williams et al, I suggest that you set up shop in the VSA forum. Or if you prefer to focus on making calls and logging your P&L, you may want to investigate brownsfan's thread. Either way, I'm closing the thread rather than deleting it so that you will have access to your charts and posts in the event that you want to repost them elsewhere.

[DbPhoenix 42]

Posted these to the Trading Daily Charts thread, but not everybody reads that, so...

 

 

 

 

 

 

 

 

Edited May 6, 2009 by DbPhoenix

[DbPhoenix 42]

Wyckoff suggested that the trader keep an eye on the leading stocks in order to gain insight into potential strength (at the bottom) or weakness (at the top) in advance of those who look only at the major averages.

 

Using the Dow as a proxy for the market as a whole, the first set of charts consists of those which have been the leaders since the most recent upturn. It includes financials.

 

 

The second set consists of the leaders over the same period but without the financials.

 

 

Also worth noting is the possible distribution which occurred a couple of days ago in the Industrials and Materials.

 

 

The market will tell you by its own action what you should do about all this.

Edited May 8, 2009 by DbPhoenix

[brownsfan019 17]

The market will tell you by its own action what you should do about all this.

 

and that would be ....

[Gringo 10]

and that would be ....

 

Brownsfan,

 

There was a link in DB's post above and given here for your convenience CLICK.

Edited May 8, 2009 by Gringo

[DbPhoenix 42]

I was going to wait until this weekend to post updates to these charts, but today's action prompts me to do it now for the reasons offered below the charts:

 

 

AA has dropped below its trendline (using the 20p as a proxy for the trendline, since a moving average is a moving trendline). However, it appears to have found support in the middle of the trading range it created during the second half of April, 8 to 9.25 +/-. It could, of course, reverse and plummet. But today, it reversed course, if only for today.

 

CAT appears to be seeking support at its trendline and at its last swing high, both at or about 35. Since there's nothing remarkable about the volume (ditto AA), it could reverse here, so be prepared (Wyckoff believed in anticipation).

 

DD has dropped below its trendline but may find support at the lower end of the trading range it created, like AA, during the second half of April, at or about 26 to 28.5 (I emphasize the "about" part).

 

DIS remains well above its trendline, and though it's been weak, it has also filled its gap. Having done so, buyers may regroup and work price higher (note how low the volume has been). Again, be prepared.

 

GE has been as weak as AA and CAT, but, like CAT, it appears to be finding support at its trendline and at the top of the trading range created during the last half of April, at or about 12.5. Whether GE's weakness has anything or a lot to do with its financing arm I'll leave to those who just have to know why. For now, again, it appears to be finding support, and, again, nothing remarkable about the volume.

 

MMM is behaving well, finding support at its trendline and at the top of the healthy volume upsurge on 4/24. If it fails here, it could drop all the way to 55, but within the context of the Canaries as a group, don't be surprised by a rally.

 

If there is a rally of any kind, it could be brief since there is now that much more resistance to plow through. Therefore, one must be especially alert for whatever clues big money traders provide us with in order to avoid being caught in a pinch.

 

 

As for these two, those big volume-no progress waves appear to have been distribution after all, and both are hanging onto their trendlines by their fingernails. Don't underestimate the bulls, This could be a real fight.

 

Two others, XLK and XLY, took big hits by way of "active" distribution, i.e., selling on the way down, and they are both below their trendlines. One could surmise that the rise in XLY was purely speculative and that the dismal consumer spending numbers prompted longs to head for the exits without waiting for their change. I'll leave that to the Whys. As for now, these two bear watching.

 

Edited May 14, 2009 by DbPhoenix

[Guest tradingcube]

Hello,

Firstly i'd like to thank DbPhoenix for posting a document titled 'W Wyckoff Analysis 1930-31.pdf' Which i actually came across on the T2W forum.

I have been a 'student' trader now for just over 2 years and am slowly learning to trade by price action and more recently volume, I have read Studies in Tape reading and Tape reading and market tactics and this weekend read the above PDF posted and really enjoyed and found the content very useful.

Anyway my question:

I understand the PDF comes from a larger document

"Wyckoff's original trading and investing course" i have had a search about but don't seem to be able to find any other reference to this? is this a document or book that is still available? and if so dose anyone have a link to a site i can purchase or download from?

Many Thanks.

[Guest tradingcube]

sorry guys, jumped the gun a bit there... seem if i had read further in this forum i could find the answers.... its not readily available or what is seems very expensive? I shall read through this form in more detail.

Thanks!!

[Flojomojo 10]

wow...I'm so excited about the microfilm info! DB, please keep me posted about it or feel free to contact me if I can contribute somehow to organise it! I'd also contribute some cash to make this available to the Wyckoff followers over here.

Regrads,

Flojo

[DbPhoenix 42]

Rather than follow all the leaders in stocks and groups individually, one can consolidate the leaders in each into "the Wyckoff Wave", i.e., a crystal ball of sorts that peers into the inner workings -- strengths and weaknesses -- of the major market averages and helps to avoid surprises. If, for example, the market is strong but the leaders are weak, one has a leg up on the competition by detecting this weakness before most are aware of it.

 

A hundred years ago, creating the WW was a laborious task. Nowadays, all one has to do is determine the leaders, as I have above, add them together, and plot the result as a single map.

 

Weakness, however, cannot be taken at face value. In a grinding, range-bound market, one must be on the lookout for rotation, out of one set of one-time leaders and into a set of a new group of leaders. So far, this is not an issue.

 

 

 

 

[DbPhoenix 42]

wow...I'm so excited about the microfilm info! DB, please keep me posted about it or feel free to contact me if I can contribute somehow to organise it! I'd also contribute some cash to make this available to the Wyckoff followers over here.

Regrads,

Flojo

 

Please understand that there are no Hidden Secrets being withheld here. The "keys" are for the most part in what's already been posted, in W's own words. Most everything else is little more than examples. Hundreds of examples. If one does not "get" what's being postulated in the first three stickies (here, here, and here), then this is likely not for him (and given the number of posts related to coding and indicators and automated systems and so forth, there clearly are a great many people whose tastes lie elsewhere).

 

This is not to say that there are not useful examples provided in the course that are not provided here. However, many of these charts are in deplorable condition and take a great deal of time to restore. Even then, there are some things that just can't be recovered, such as in some cases the "closes" on the bars on the vertical charts (even the volume bars are sometimes a guess).

 

If you enjoy the process of getting into a long-dead trader's head through what he's written, then the course is well worth having. But I don't want you to be disappointed if you don't receive some sudden illumination. My primary caution is to focus what you think and believe and do on the work itself, not on an adaptation of it or an interpretation of it or on what some supposed Wyckoff guru has to say about it.

[Flojomojo 10]

Please understand that there are no Hidden Secrets being withheld here. The "keys" are for the most part in what's already been posted, in W's own words. Most everything else is little more than examples. Hundreds of examples. If one does not "get" what's being postulated in the first three stickies (here, here, and here), then this is likely not for him (and given the number of posts related to coding and indicators and automated systems and so forth, there clearly are a great many people whose tastes lie elsewhere).

 

This is not to say that there are not useful examples provided in the course that are not provided here. However, many of these charts are in deplorable condition and take a great deal of time to restore. Even then, there are some things that just can't be recovered, such as in some cases the "closes" on the bars on the vertical charts (even the volume bars are sometimes a guess).

 

If you enjoy the process of getting into a long-dead trader's head through what he's written, then the course is well worth having. But I don't want you to be disappointed if you don't receive some sudden illumination. My primary caution is to focus what you think and believe and do on the work itself, not on an adaptation of it or an interpretation of it or on what some supposed Wyckoff guru has to say about it.

 

Now to get this straight: Maybe you've interpreted too much into my message. I think I have built my market understanding very well on my own, nevertheless Wyckoffs ideas play an important role. Illumination is something that I leave to ppl that have the need to follow gurus. I on the other hand simply enjoy to possess certain things...and the original course would be a great addition to my book shelf! ...there's nothing more to it...

[rigel 10]

IMO it is worth trawling through the course, it is very well presented in almost a thesis form(cross referencing etc) and superb way of sentence construction, sadly lacking in recent publications on trading.

And ofcourse the content and analysis is par excellence , the patterns, and price/vol interplay illustrations, unfold in today's markets as well day after day.

 

Db,

Do you employ figure charting in your trading, and do you consider it absolutely necessary to study those sections in the course ie. sections 11-13 and some others.

[DbPhoenix 42]

 

Db,

Do you employ figure charting in your trading, and do you consider it absolutely necessary to study those sections in the course ie. sections 11-13 and some others.

 

No, I don't, but Wyckoff was enthusiastic about it, and, as I said in the P&F thread, anyone who wants to explore that aspect of it in that thread is welcome to do so. However, no one has shown any interest. Perhaps P&F is no longer stylish. I'm not a part of that community, so I can't say.

 

There is much of the course that has a raise your own chickens for the eggs element to it and that I don't find particularly pertinent today, such as that having to do with drawing your own charts, especially P&F. But those who snort at it because some of it is old-fashioned and out of date (such as how to choose a broker and how to place an order) are missing out on a gold mine.

Edited May 25, 2009 by DbPhoenix

[DbPhoenix 42]

As indicated in the daily charts over the weekend, the Dow, S&P and Naz all found support at the anticipated levels. Today was therefore up.

 

The sector canaries were a bit stronger (which is to be expected since they are after all the leaders), finding support a bit higher.

 

 

 

 

 

 

Too late for a long, of course. The next potential trading opportunity will be if and when price reaches the other side of the range or if and when this upmove fails and it breaks below support.

 

 

 

[Guest OrlandoB]

DbPhoenix,

 

Could you please elaborate on how you constructed those charts to reach those price levels?

 

Thanks for your generosity,

Orlando

[DbPhoenix 42]

DbPhoenix,

 

Could you please elaborate on how you constructed those charts to reach those price levels?

 

Thanks for your generosity,

Orlando

 

It's a Sierra Charts function, though I'm sure there are other charting programs that can do the same thing.

 

First, determine the leaders. Then, once you've listed these with your data provider, just combine them in Sierra Charts. You can also do this with Excel (add the closing prices of, for example, the stocks, then divide by six to get an average price; you can do the same for the highs and lows if you want to track that info). Or you can just watch this space.

[atto 20]

add the closing prices of, for example, the stocks, then divide by six to get an average price

I know that's how Wyckoff and Dow did it, but it seems that this method weights stock prices that are high (which can be rather arbitrary) much heavier (e.g. ACME is at $50, DYNO is at $20, both are similar sized companies, but ACME is weighted in the index 2.5x greater). It could be that normalizing the data was too computationally intensive in the early 1900s.

 

I'm sure it's not a huge deal, or Wyckoff would have given it some notice, but it might give a better picture of the constructed index.