Weakness appears on an up bar

End of Rising Market (buying climax)

-

ultra high volume (can be ultra low too)

narrow spread
close on the low or middle, bearish reaction
new high ground

retest is successful, can expect lower prices, if the test volume is low, and
the spread is narrow (no demand here - strong sell signal)

Strength appears on a down bar

Demand overoming supply (selling climax)
-

ultra high, or ultra low volume

new low ground
close middle or high, bullish reaction

retest is successful, can expect higher prices, if the test volume is low, and
the spread is narrow (no supply here - strong buy signal)

No supply
-

low volume downbar

narrow spread
sometimes closes on middle or up
background is very important, SOS seen before, or an SOW in an uptrend

No demand
-

low volume upbar

narrow spread
sometimes closes on middle or down
background is very important, SOW seen before, or an SOS in a downtrend

Short after distribution at market top

A: Buying Climax
B: Supply coming in (upthrust)
C: No demand at market top
D: Confirmation of no demand (no demand needs to be confirmed for
shorting)

Signs of Weakness

Supply coming in:

1: (can be effort to go up too)
-

Up bar, high volume (if ultra high volume -> climactic action)
can be a breakthrough at an old top, in this case it is an SOS, if fake break,
then SOW
strength or weakness in the background? if there is weakness, this
weakness signal is stronger

if there is strength, or breakout, this supply can be tested, look for no

supply bars (narrow spread, low volume, closing in the middle or high), for
shakeouts, or for narrow spread, high volume downbars. These need to be
retested, a successful test is bullish. In this case, the path of least
resistance is up.
after a long uptrend, this can be profit taking
if next bar is bearish, closing near its lows, weakness confirmed. High
volume, narrow spread upbars shows selling too.
no demands and upthrusts confirm this weakness

Version nr. 2: (2 candle pattern)

-

hgh volume up bar closing off the highs

next bar bearish
more weakness if it is fresh high ground (buying climax)
also more weakness, if the down bars high higher then the upbars high
just like 1, can be a start of distribution, if there is weakness in the
background
caution if the volume was very high on the downbar too. if the reaction to
that a downbar too, further confirms the weakness
THIS IS AN SOW

Version nr. 3:
-

up bar closing off the highs, increase in volume, supply entered the
market, if ultra high, its climactic
look for other SOWs, like upthrusts or NDs

Version nr. 4:
-

up bar closing off the highs, reaction is (are) a small upbar(s) on (ultra)
high volume
the last candle need to be bearish for confirmation
NDs and upthrust confirm the weakness

Version nr. 5:
-

very wide range, upthrust looking pinbar

true upthrusts appear, when there is weakness in the background
if there is strength in the background, can be a failed upthrust

No demand:
Version nr. 1:
-

up bar, narrow spread, closing the middle or low with low volume, or
volume lower than the last 2 bars
it can be a down bar, if the high is higher than the previous bar
if the spread is greater than narrow, still can show weakness
background is very important, if there are SOSs, has little meaning
next bar should be down for confirmation
at market top it is very unlikely price will go higher on ND
caution if there is an NS after it

Version nr. 2:

shows lack of interest as the market rises

works best when there is weakness in the background, or following a minor
SOS in a downtrend
with strong background, it carries little significance
next bar should be down, after that, expect lower pices (entry
possibility)

Weakness has appeared:

Version nr. 1:
-

upbar closing off its high

if volume is lower than the last two -> no demand
if volume is higher -> selling in the candle
it has significance, if there is weakness in the background
low volume up bars in the area of weakness show no demand
upthrusts and high volume upbars closing in the middle add to the
weakness
caution if there is an NS, also if there are high volume down bars closing
int he middle
Version nr. 2:

narrow spread up bar closing off the highs and in fresh new ground
low volume here lack of interest, higher volume shows selling
ONLY VALID IF A SUBSTANTIAL UPMOVE HAVE TAKEN PLACE
if there are down bars on high volume closing off the lows with the next
bar up shows potential strength
if this is not at new high grounds, it can be absorption volume, which is an
SOS

Upthrust:
Version nr. 1:
-

needs confirmation
marked up but falls off rapidly to close on or near its low
average or wide spread
if the high is higher than the prvious bars -> hidden upthrust
on high volume -> selling, on low volume -> lack of interest in the upside
weakness must be in the background (HV up bars closing int he middle, or
NDs)
usually appears after no demand
expect lower prices (short opportunity)
caution is there is an NS later, also at high volume down candles closing off
the low

Hidden Upthrust:
-

average, or wide spread, closing on or near the low

its high is higher than the previous bars
expect lower prices

End of a Rising Market:

-

narrow spread up bar with high volume, closing off the highs, in fresh new
ground
ONLY VALID, IF THERE WAS A SUBSTANTIAL UP MOVE HAVING TAKEN PLACE
following prices should decline
any upmove back into the area of supply on low volume and narrow
spreads, or upthrusts are further SOWs.
caution at NSs, also at down bars on high volume closing off the lows with
the next bar up (SOS)
weakness will not suddenly disappear
if it is not in new high ground, it can be absorption (SOS)

No Result from Effort:

-

up bar with high or ultrahigh volume followed by a down bar (weakness)

should be up bars with increased volume in the immediate background
if next bar closes down on its lows, it confirms weakness
high volume narrow spread upbars also mean selling
NDs and upthrusts confirm weakness

Two Bar Reversal:

-

first an up bar closing near its high, followed by a down bar closing near its
low
if the first candle is into fresh new ground, and volume is high or greater,
this can be a climax
add significance, if volume is higher on the up bar, or if the downbar
engulfs the upbar
there should be a period of rising prices before
caution if the volume ont he down bar was high or ultra high
also caution, if this followed by down bars on reducing volume, especially
closing in the middle with narrow spreads.

Trap Up Move:
-

first bar is up, closing off the highs. next bar is a wide spread down bar,
closing lower than the up bar, locking in traders.
can be the start of distribution, or a shakeout.
caution, if the volume was too high ont he down bar, with the next bar up.

Failed Test:
-

wide spread down bar closing on, or near its low, with the low and the
close lower, than the previous few bars
there should be a test in the immediate background

Reversal after effort to rise:

-

first bar is up, closing on its high, followed by a down bar retracing most of
the previous bars gain
can appear as a top reversal

Top Reversal:

first bar is an up bar closing near its high, followed by a down bar, closing
near its low
similar to two bar reversal

Potential Buying Climax:

-

high or ultra high volume closing int he middle

fresh new high ground
up move precedes it
next bar should be down for confirmation
upthrusts, no demands and high volume, narrow spread up bars confirms
weakness too

Supply Swamping Demand:

-

high volume up bar closing off its highs, can be a buying climax
if the breakout is genuine, the supply needs to be tested, if not, SOW

Weakness based on price action:

-

wide spread down bar, closing on its low

if the next bar down, it confirms the weakness

Possible hidden selling:

-

level, or up bar showing an increase in volume, or low volume

the market has to be weak beforehand
Signs of Strength

Two Bar Reversal:

-

first a down bar closing near its low, followed by an up bar closing near its
high
if the first candle is into fresh low ground, and volume is high or greater,
this can be a climax
add significance, if volume is higher on the down bar, or if the upbar
engulfs the down bar
there should be a period of falling prices before
caution if the volume on the down bar was high or ultra high
also caution, if this followed by up bars on reducing volume, especially
closing in the middle with narrow spreads.

Shakeout:
-

wide spread mark down, closing near the high

can be 1 or 2 candle
can be high or low volume
low volume testing back into the area of the shakeout is a strong
SOS

Test:
-

low volume, close in the middle or high

significance if the low is in fresh new low ground
SOS in background

more weight to a second test in a bullish phase, if the 2nd test has lower
volume

Test After Shakeout:

-

low volume after shakeout

appears a spring
expect higher prices

Stopping volume:
-

volume greater than the last few bars

close off the lows
next bar should be up
needs a series of falling rpices before
testing ideally is inside the stopping area, with narrow to average spread
closing int he middle or high on low volume

Bottom Reversal:
-

first bar is an down bar closing near its low, followed by an up bar, closing
near its high
similar to two bar reversal

No Supply:
-

low volume downbar

narrow spread
sometimes closes on middle or up
background is very important, SOS seen before, or an SOW in an uptrend
expect higher prices

Selling Climax:
-

ultra high volume

happens after downtrend
accumulation needed after
ideal test in the area of stopping volume

Reversal Over Two Bars:

-

first bar down into fresh new ground

second bar is up on wide spread, and closing above the high of the first bar
down move behind it
may need further accumulation

Strength Coming In:

-

down bar closing int he middle or high in new low ground, high or ultra
high volume
low volume also, no selling pressure
background is very important
next bar should be up
caution of weak bars

Bag Holding:
-

narrow spread down bar with ultra high volume in fresh new low ground
rare, but very strong SOS

clear downtrend is the background

strong rally expected
any shakeout or successful test in the bag holding area is a very strong
SOS