Copyiight, Legal Notice anu Bisclaimei:

Copyiight 2u11 By uavin Bolmes. All iights ieseiveu

This publication is piotecteu unuei the 0S Copyiight Act of 1976 anu all othei applicable
inteinational, feueial, state anu local laws, anu all iights aie ieseiveu, incluuing iesale
iights
No pait of this publication may be iepiouuceu, stoieu in a ietiieval system, oi tiansmitteu
in any foim oi by any means, electionic, mechanical, photocopying, iecoiuing, scanning oi
otheiwise, except as peimitteu unuei section 1u7 oi 1u8 of the 0S Copyiight Act of 1976,
without eithei the piioi wiitten peimission of the publishei.

All chaits heiein aie pioviueu with the peimission of Tiaueuuiuei Systems Inteinational
(www.tiaueguiuei.com)
Limit of Liability anu Bisclaimei of Waiianty: The publishei has useu its best effoits in
piepaiing this book, anu the infoimation pioviueu heiein is pioviueu foi euucational
puiposes only. The publishei makes no iepiesentation oi waiianties with iespect to the
accuiacy oi completeness of the contents of this book anu specifically uisclaims any
implieu waiianties of meichantability oi fitness foi any paiticulai puipose anu shall in no
event be liable foi any loss of piofit oi any othei commeicial uamage, incluuing but not
limiteu to special, inciuental, consequential, oi othei uamages.

Tiauing Stocks, Commouities, Futuies, 0ptions on Futuies, anu ietail off-exchange foieign
cuiiency tiansactions involves substantial iisk of loss anu is not suitable foi all investois.
You shoulu caiefully consiuei whethei tiauing is suitable foi you in light of youi
ciicumstances, knowleuge, anu financial iesouices. You may lose all oi moie of youi initial
investment. 0pinions, maiket uata, anu iecommenuations aie subject to change at any time.

ISBN: 978-u-98S6268-1-7

2


"#$%&'()%&# *+,
"#$%& +&- ./
+&0(&12&3

A Companion uuiue to
"TroJinq in tbe SboJow of tbe Smort Honey"

By 6ovin Eolmes





S
,456789:;':<:6"+



So many people have helpeu me wiite this book, anu by uoing so have also
helpeu me finu my puipose in life! I coulu fill ten A4 pages with theii names, but
in oiuei to keep this biief, I want to acknowleuge anu thank the following
people:

Fiistly, my heaitfelt thanks goes out to eveiyone who pusheu me into completing
my book. The pioject eventually took ovei two yeais to complete, but was a veiy
woithwhile ventuie inueeu.

Bioauly, I woulu like to thank all oui Tiaueuuiuei customeis anu *+, Club
membeis foi theii continueu suppoit anu encouiagement as we have neaily
ieacheu oui tenth anniveisaiy in business.

I want to especially thank anu acknowleuge Tiaueuuiuei customei, Eiic Riveia,
foi helping us to piogiam Tiaueuuiuei (v.S) with the scannei auu-in that Eiic
woikeu so haiu on. This was launcheu in 2uu8. Ny sinceie giatituue is extenueu
to Tiaueuuiuei customeis, William Bonelson anu Nalcolm Noos, who pioof ieau
the book anu maue some excellent suggestions anu giammatical coiiections that
weie incoipoiateu into the book.

Thanks anu acknowleugement goes to:

*+, expeit anu funu managei, Philip Fiiston, foi all his tiieless woik in helping
Tom Williams wiite the new *+, uialogue boxes foi the Tiaueuuiuei softwaie,
anu foi his contiibution to the Tiaueuuiuei *+, Club.

*+, expeit Sebastian Nanby, foi contiibuting his inteiview foi this book.
=Wyckoff expeits Bi. uaiy Bayton anu Baviu Weis foi contiibuting theii
inteiviews, I appieciate youi time anu effoits to help give youi expeit opinions
to assist the tiaueis anu investois who ieau my book.

All the gieat tiaueis anu euucatois I have met who have woikeu with me in
vaiious piojects anu have also taught me a gieat ueal, incluuing Naikus
Beitkoettei, Touu Kiuegei, Roy Biulock, Rob Boffman, uaiy Fullet, Philip Fiiston,
Bi. uaiy Bayton, Baviu Weis, Piofessoi Bank Piuuen, Biuce Fiaziei, Baivey
Loomstein, Auiienne Toghiaie, Biau Beufoiu-Biown, Bill Weimine, Naitin Wong
anu Nick Rauge.

Paul Avins foi inspiiing me in the eaily uays to take massive action anu impiove
my life anu the life of otheis!

Big thanks to Richaiu Seegeis, a ueuicateu customei of Tiaueuuiuei
Systems. Richaiu was kinu enough to take the time anu patience to help
thoioughly euit the content anu giammai of the book, as well as auu valuable
insight to the list of the book topics. Thank you Richaiu foi youi input anu
expeitise.
4

A veiy special thank you to }im Nooney anu }im Cagnina fiom Infinity Futuies in
Chicago, who have consistently suppoiteu Tiaueuuiuei anu myself peisonally
anu as a iesult, have become gieat fiienus, anu also thanks to all the biokeis at
Infinity foi theii suppoit incluuing my biokeis Russ Cailson anu Anuy Belap.
They aie ieal fiist class guys to ueal with anu have always been theie when you
neeu them.

Nike Panice, my biokei at PFu Best foi his suppoit anu helping get peimission
to ie-piint the inteiview with Tim Rayment.

The entiie Tiaueuuiuei team - these people aie the backbone of the company
anu continually suppoit the business foi my paitnei anu me in oui ventuie.
They aie A} Robinson, my biothei Baiien Bolmes, Petei anu Rita 0ffen, who aie
always theie to help Tom, oui new uevelopment team }osh Baviuson anu
Nichael Naigolese, anu oui piogiammei Robeit Baiwoou anu all oui *+, Club
contiibutois. A veiy special thank you to oui new team membei, heau of public
ielations anu maiketing foi Tiaueuuiuei Systems Inteinational, Aimi Natienzo,
who has woikeu extiemely haiu to ensuie the book was completeu anu
compileu by a tight ueauline- well uone Aimi.

Ballas Bauham, who is veiy much pait of the Tiaueuuiuei team anu has always
taken caie of me as she uoes Tom when I visit Tom's house in Woithing,
Englanu.
Special thanks to my fathei-in-law, Ken Woouham, foi keeping the finances in
oiuei.

A gieat big thank you to my long time business paitnei anu fiienu, Richaiu
Beunall, who takes my haii biaineu iueas anu makes them happen. Without
Richaiu, theie woulu be no websites oi emails that get oui message out uay aftei
uay.

A son's thanks to my special mum, Shiiley, foi being a wonueiful mothei, anu to
my biothei Baiien, foi his unflinching suppoit.

I want to thank fiom the bottom of my heait two veiy special people who have
hau a big impact foi the bettei in my life. Fiistly, Tom Williams, the man who has
inspiieu many thousanus of tiaueis anu investois woiluwiue to bettei
unueistanu supply anu uemanu anu chait ieauing, using what he hau leaint to
make money. Be has passeu on that knowleuge unselfishly anu giaciously. Tom
is a tiue heio to many anu we owe a gieat ueal to the likes of Tom Williams,
Richaiu Ney anu Richaiu Wyckoff. Both hau the same goal in minu, which was to
help otheis.

Special thanks to my veiy patient anu unueistanuing wife Lauia, who pesteieu
me as the ueauline giew closei to get to my office anu wiite the book, which I
uiu. Thank you Lauia, I love you veiy much, anu to my lovely chiluien Nathan,
0livia anu Ryan, all little chaiacteis in theii own way, but a ieal blessing that
completes me.

S
>7?:8,?;

!" $%& '())(*&+ ,-./0.1%2 %3 4%)5&0 6720*8 9.*)"+(+ *.8 951:%2;



When I fiist met uavin ten yeais ago anu I explaineu to him how the financial
maikets opeiateu, I iemembei his ieaction of suipiise anu bewilueiment. uavin
knew veiy little about tiauing oi investing, but cleaily he hau an appetite to
leain anu was hungiy foi success. It what was foi this ieason I knew he hau the
potential to be a gieat tiauei.

When I wiote my fiist book, "Tbe 0nJecloreJ Secrets Tbot Brive Tbe Stock
Horket", I hau no iuea how populai it woulu become, but as I have gotten oluei, I
knew I neeueu to pass on my extensive knowleuge to someone with the same
passion foi helping anu teaching otheis as I have. uavin fitteu the bill peifectly,
anu uespite having setbacks, he has always maintaineu a veiy positive attituue to
life, anu a willingness to let me teach him eveiything I knew about tiauing.

I explaineu to uavin uuiing one of the many times he has stayeu with me at my
home in Woithing, Englanu, that wiiting my book was one of the most iewaiuing
anu satisfying things I have uone anu I suggesteu that uavin seiiously think
about following in my footsteps anu wiite a book. Be has cleaily leaint a gieat
ueal since I fiist met him, but I ieally uiun't think he was going to sit uown anu
actually wiite a book, as he is a bit of a live wiie! So to see a Suu page book
appeai uuiing Nay 2u11 was wonueiful.

When I hau uavin's book, "TroJinq in tbe SboJow of tbe Smort Honey", ieau to me
(I am now 8S anu suffei fiom maculai uegeneiation so have limiteu vision) I was
veiy suipiiseu at just how goou the book is. Be has explaineu in a cleai anu easy
to unueistanu mannei how you can make money in the financial maikets if you
unueistanu the unueilying mechanics if you have a system anu a plan.

I ceitainly iecommenu that you ieau this book anu keep it as a iefeience at all
times, as it gives gieat insight into how a tiauei enteis the maiket as a winnei.

uavin has become an excellent tiauei in his own iight, anu I must say that it
appeais to me that potential tiaueis who entei the maiket with no pievious
expeiience whatsoevei seem to uo veiy well anu often fai quickei than tiaueis
that have continually jumpeu fiom one system to the next, spenuing a lot of time
anu money in seaich of the elusive Boly uiail of tiauing so they enu up with no
system anu no plan anu as a iesult they fail. If theie is a Boly uiail foi tiaueis, it
is containeu in the infoimation in this book.

If a tiauei enteis the maiket with an unpolluteu minu, they will see cleaily that
the *+, piinciples aie piesent in all maikets anu in all timefiames, anu will
iecognize how they aie woiking, in oiuei to iuentify piofitable tiaue set-ups.
Those tiaueis will then uevelop anu giow theii tiauing skills aiounu this
knowleuge.
6

Nost tiaueis anu investois uon't unueistanu volume implications anu how
impoitant it is in theii analysis of any of the maikets in any timefiame. Basically,
you have hunuieus of thousanus of tiaueis constantly tiauing, some long, some
shoit, some holuing, some waiting to get into the maiket, some alieauy in
piofitable positions, anu some in losing positions.

So how on eaith can we possibly make sense of this. It's not as uifficult as you
might think because whenevei a tiaue is enteieu in, the appiopiiate exchange
iegisteis this as volume on a continuous basis. So to us, volume iepiesents
activity.

Now, what is the exact amount of activity taking place in ielation to the piice bai
on youi chait. The activity must be the ieason why the chait is behaving the
way it is. You then neeu to iealize that at least 8u% oi even moie of that volume
oi activity will be piofessional money, oi the "Smait Noney", as uavin iefeis to in
the book; in othei woius, tiaueis who aie tiauing laige amounts of money anu
contiacts that aie in fact laige enough to altei the uiiection of a maiket.

Foi example, on youi chait, if you see an up-bai that has moveu into fiesh high
giounu, but you see that the spieau is naiiow, anu the volume is veiy high, it will
piouuce an automatic 'Siqn of Weokness in the Tiaueuuiuei *+, softwaie that I
inventeu. The ieason foi this is that piofessional money has to sell as the maiket
is going up, onJ tbe norrow spreoJ up-bor is couseJ by tbem sotisfyinq every buy
orJer tbot comes into tbe morket, i.e. coppinq tbe top enJ of tbe morket. lt is like
puttinq o liJ on it. This piouuces a naiiow spieau on the up-bai anu uavin shows
seveial excellent examples in his book of this piice action. If the activity is veiy
high then this can only tell you that piofessional money is taking theii piofits
anu the net effect of this is to make the maiket beaiish, oi in othei woius, weak.

veiy often it will be uifficult foi you to see this because inevitably the news will
be goou news, anu it may be uifficult foi many to unueistanu that you neeu to
sell on goou news. Nost tiaueis will, by theii veiy natuie, consiuei themselves to
be quite intelligent, anu maybe have pievious success in life that will show this.
So you have to ask youiself a question, why is it so uifficult to pieuict maiket
behavioi. All youi skills that have seiveu you well uuiing youi life nevei seem to
be quite goou enough, so why is this. I woulu say the ieason foi this is that all
the infoimation, anu I mean all, that's pouiing into youi minu cannot be the
coiiect infoimation, anu it's this ueluge of misinfoimation that is making it
uifficult to pieuict maiket behavioi on a iegulai, ieliable basis.

This book will go a long way to bioauen anu fulfill youi unueistanuing of exactly
what's going on, anu you can only benefit fiom this infoimation - infoimation
that will be with you foi the iest of youi life.



-Tom Willioms

7
@,45'?7.6; ,@7." *79.<: +A?:,; ,6,9B+C+
,6; "?,;:'.C;:? +B+":<+ C6":?6,"C76,9


This is a biief explanation about Tiaueuuiuei anu the unueilying methouology of volume
Spieau Analysis. We will be showing examples of how piofessional activity is cleaily visible
in all maikets anu in all timefiames, if you know what you aie looking foi.

Tiaueuuiuei is baseu on a methouology calleu volume Spieau Analysis.

volume Spieau Analysis (*+,) is a piopiietaiy maiket analysis methou that was conceiveu
by Tom Williams (Chaiiman of Tiaueuuiuei Systems). *+, is utilizeu in the Tiaueuuiuei
softwaie to analyze a maiket by obseiving the intei-ielationship between volume, piice,
anu spieau of the piice bai (i.e. iange of a piice bai). This methou is paiticulaily goou at
highlighting imbalances of supply onJ JemonJ.

Tiaueuuiuei was pieviously known as Wyckoff *+, (volume Spieau Analysis) anu has
been in existence foi ovei 2u yeais. The unique natuie of Tiaueuuiuei is uue to its built in
aitificial intelligence engine. The softwaie is capable of analyzing any liquiu maiket, in any
time fiame, anu extiacting the infoimation it neeus to inuicate imbalances of supply anu
uemanu on a chait. Thus, Tiaueuuiuei is able to giaphically show the essential foices that
move eveiy maiket.

The softwaie functions in eithei Real-Time (RT) oi Enu-of-Bay (E0B) moues, anu enables
useis to see when piofessional money is enteiing, exiting, oi not paiticipating in the
maiket they aie tiauing. This empoweis Tiaueuuiuei useis to make moie intelligent,
timely, anu infoimeu tiauing uecisions. Tiaueuuiuei is a ievolutionaiy concept that can be
useu on its own oi in conjunction with othei tiauing softwaie platfoims, making it an iueal
choice foi uecision suppoit anu auuing value to othei piopiietaiy uata venuoi platfoims.
The Tiaueuuiuei softwaie combines ease of use with the best morket supply onJ JemonJ
onolysis, cuiiently available. The extensive Expeit System has an innate unueistanuing of
maiket uynamics, combineu with DEF(G&, which means that it is capable of analyzing
supply onJ JemonJ in any liquiu maiket.

The inuicatois aie uisplayeu automatically on the chait. Theie is no configuiation, no
setting of paiameteis, anu no optimization. It is oui contention that if an inuicatoi oi
tiauing iobot iequiies optimization to make it piouuce positive iesults, it is because they
aie "lagging " in natuie anu theiefoie neeu iesults "cuive fitting" in oiuei to piouuce the
expecteu iesults. Tiaueuuiuei on the othei hanu, has inbuilt logic signals that aie coueu
aiounu volume, which is a leauing inuicatoi as opposeu to a lagging one, anu can theiefoie
be applieu to any timefiame, with consistent positive iesults. The sophisticateu unueilying
Tiaueuuiuei couing has an augmenteu set of novel piopiietaiy tools, which confiim tiaue
set-ups as they appeai in any time fiame anu in any maiket.

As we saiu eailiei, this is not a new concept, anu Tom Williams who inventeu *+, was
himself a synuicate tiauei who coulu see that the maikets weie manipulateu anu that the
key to unlocking the tiuth lay in the ielationship between the volume, the spieau (oi
iange) of the bai, anu the closing piice. Tom spent many yeais stuuying the concepts of
Richaiu Wyckoff who was a tiauei uuiing the 192u anu Su's, anu who wiote seveial books
8
on the Naiket, eventually setting up the "Stock Naiket Institute" in Phoenix, Aiizona. At its
coie, Wyckoff's woik is baseu on the analysis of tiauing ianges, anu ueteimining when
stocks aie in bosinq, morkJown, Jistribution, oi morkup phases. Incoipoiateu into these
phases aie the ongoing shifts between 'weak hanus' (public owneiship) anu 'composite
opeiatoi ', now commonly known as 'Smort Honey.

Tom left Beveily Bills in the eaily 198u's anu went back to Englanu. 0nce theie, he began
to investigate the possibilities of computeiizing the system he hau leaint as a synuicate
tiauei. This began the evolution of volume Spieau Analysis. Togethei with an expeiienceu
computei piogiammei, Tom caiefully stuuieu many thousanus of chaits to iecognize the
obvious patteins that weie left when piofessional oi 'Smort Honey was active. This
methouology, although simple in concept, took many yeais to wiite anu is now taught as a
methouology combineu with the softwaie calleu Tiaueuuiuei.

volume Spieau Analysis seeks to establish the cause of piice movements. The 'cause' is
quite simply the imbalance between Supply anu Bemanu oi stiength anu weakness in any
liquiu maiket, which is cieateu by the activity of piofessional opeiatois, oi Smait Noney. If
you use the Tiaueuuiuei softwaie you will see that it uoes an excellent job of uetecting
these key imbalances foi you, taking the haiu woik out of ieauing the maikets anu enabling
you to fully concentiate on youi tiauing.

The significance anu impoitance of volume appeais little unueistoou by most non-
piofessional tiaueis. Peihaps this is because theie is veiy little infoimation anu limiteu
teachings available on this vital pait of technical analysis. To use a chait without volume is
similai to buying an automobile without a gasoline tank.

Foi the coiiect analysis of volume, one neeus to iealize that tbe recorJeJ volume
informotion contoins only bolf of tbe meoninq requireJ to orrive ot o correct onolysis. "H&
E-H&# H$FI EI -H& G&$1)1J )3 IE(1% )1 -H& /#)2& 3/#&$% K)L&L #$1J&M. volume always
inuicates the amount of activity going on. The coiiesponuing piice spieau shows the piice
movement on that volume. Nany tiaueis believe you cannot analyze volume in the F0REX
maikets because it is unavailable, but we will show you how the Tiaueuuiuei piopiietaiy
system can uo something that most tiaueis thought weie impossible (I will uiscuss moie
about this latei).

Some technical inuicatois attempt to combine volume anu piice movements togethei. Rest
assuieu that this appioach has limitations, because at times the maiket will go up on high
volume, but can uo exactly the same thing on low volume. Piices can suuuenly go siueways,
oi even fall off, on exactly the same volume! So, theie aie obviously othei factois at woik.

Piice anu volume aie in a complex syneigistic ielationship, which is the ieason
Tiaueuuiuei was uevelopeu in the fiist place. The system is capable of analyzing the
maikets in ieal-time (oi at the enu of the uay) while uisplaying any one of 4uu inuicatois
on the scieen to show imbalances of supply anu uemanu.

(Foi moie infoimation please visit www.troJequiJer.com)

9
<*. =%5 >*?0 >%.0" @+(.A $:0
$2*80B5(802 469 6%31C*20 6"+10&D

Bont toke HY worJ for it. ReoJ wbot Tim Royment, tbe winner of tbe WorlJ
Cup TroJinq Cbompionsbip, bos to soy. Ee JiJnt win once, but be won 1C(E0,
troJinq reol money in reol-time usinq volume SpreoJ Anolysis.

Pleose enjoy tbe followinq interview witb Tim Royment, os well os on excerpt
from tbe 1
st
book, cbopters 1-4 of TroJinq ln tbe SboJow of tbe Smort Honey.


-6ovin Eolmes

1u

11

12


1S
4N,A":? O

"N: <::"C6' "N," 4N,6':; <B 9C>:



I iemembei the phone call well. It was an eaily Nonuay moining, anu my Peisonal
Assistant Anne came into my office to tell me that theie was a gentleman fiom Yoikshiie
Englanu on hei phone. Be hau seen one of my e-maiketing websites anu hau a pioposition
foi me. I askeu Anne to finu out moie befoie putting the call thiough. Appaiently, this
gentleman nameu Roy Biulock was involveu in the uevelopment of a computeiizeu tiauing
piogiam calleu Wyckoff volume SpreoJ Anolysis. The inventoi of the piogiam, Tom
Williams, a ietiieu synuicate tiauei, wanteu to paitnei with a maiketing fiim in oiuei to
biing his tiauing softwaie to a wiuei auuience.

I knew nothing about tiauing oi investing at the time, but I was cuiious, so I took the call.
0n the othei enu of the line was a ueep, but pleasant voice with a thick Yoikshiie accent.
Roy began to explain how Tom hau staiteu the company as a hobby. This implieu that they
hau no maiketing buuget. Roy also explaineu that the company Tom hau founueu seveial
yeais piioi to piomote the piogiam, uenie Softwaie Ltu., was inteiesteu in paitneiing with
a maiketing oi auveitising agency. The pioposal was that the maiketing aim woulu take a
piofit shaie in ietuin foi its seivices.

At the outset I was skeptical anu somewhat intiigueu by Roy's appioach, so I askeu him
why he was inteiesteu in my company. Roy tolu me he pickeu about 6u companies he
founu on the Inteinet, anu we weie one of those companies that hau suitable qualifications
to suit theii puiposes. I then askeu how many phone calls anu visits he hau maue, anu
what type anu level of iesponse he hau ieceiveu. We weie one of the last companies on his
list. Be hau a uejecteu tone in his voice. I coulu sense that it was an issue to woik without a
maiketing buuget, anu most likely, theie hau been little oi no inteiest in the softwaie.

At this point, a little voice in my heau uigeu me to invite him to call on me at my office to
finu out moie. In those uays my office was in Beckenham, Kent, which is appioximately
4uu miles (SSu km) fiom Yoikshiie. I askeu Roy if he hau a business plan, anu whethei it
was possible foi him to come uown fiom his base upcountiy to visit me at my office in the
south to uiscuss his pioposal. I was a bit suipiiseu by the obvious enthusiasm with which
he jumpeu at my suggestion, anu we et a meeting the following week. Roy infoimeu me
that he woulu be biinging along Tom Williams, the inventoi of the piogiam, to explain to
me how the financial maikets ieally woik. I was fascinateu, to say the least, so the next few
uays passeu by veiy slowly as I eageily anticipateu the follow up meeting.

Roy anu Tom aiiiveu eaily anu weie askeu to wait in the boaiuioom. The uay was alieauy
hectic with my extiemely busy exhibition uesign company anu e-maiketing business. I felt
that I coulu give Roy anu Tom 4S minutes out of my chaotic uay foi them to show me the
business plan. That shoulu be enough time, I thought. I woulu meet with them biiefly now,
take it away, anu uigest it's content latei.

As I enteieu the boaiuioom, I noticeu both men weie veiy well uiesseu. Roy gieeteu me
fiist anu eageily shook my hanu. Be stiuck me as being somewhat ill at ease, but went on
14
to ieveal that he useu to woik foi Einst anu Young Cap uemini, one of the woilu's laigest
management consulting, outsouicing, anu piofessional seivices companies. Roy then
quickly tuineu to intiouuce Tom Williams. Tom at fiist glance was an elueily gentleman
that I estimateu to be in his eaily 7u's. Be impiesseu me as highly aleit anu aiticulate.

This was going to be an inteiesting meeting!

Roy hanueu me theii business plan. It was well piepaieu anu highly oiganizeu. Be then
began his piesentation. As I mentioneu befoie, I knew veiy little about the financial
maikets at that time anu unfoitunately, aftei about 1S minutes, I ceaseu to have the faintest
iuea what Roy was talking about! I was about to call the meeting to an enu since my uay
was alieauy veiy busy, but Tom, on the othei hanu, woulu not let that happen. Be hau
alieauy noticeu my bouy language uuiing the piesentation anu as I was just about to speak,
the uistinguisheu gentleman helu up his hanu. With a glint in his eye anu hanu in the aii,
Tom saiu, "Stop! Roy." Be then saiu, " uavin- lets go back to the beginning, anu let me
explain to you how the maikets reolly woik!"

With no hesitation, Tom began to explain the maikets to me. "All financial maikets move on
the univeisal law of Supply anu Bemanu. When you say this to any tiauei oi investoi, they
will nou in agieement anu say 'Well that's obvious, tell me something new!' Bowevei, what
they uo 1E- unueistanu is how to coiiectly pull this infoimation out of a piice chait. I have
uevelopeu, ovei many yeais, a computei piogiam calleu Wyckoff volume SpreoJ Anolysis,
oi Wyckoff 469, that uoes exactly that. It extiacts the Supply anu Bemanu infoimation on a
chait to give cleai signals when the big playeis, oi what I call 'Smait Noney', aie veiy active
oi inactive, so the usei can tiaue in haimony with theii moves.

Tom continueu, "You know, uavin, the maikets uo not move by acciuent! They aie not
ianuom as many tiaueis anu investois think. They aie, howevei, Jeliberotely manipulateu
to wiong-foot the unsuspecting heiu, in othei woius, the uninfoimeu tiaueis. If you can
ieau Supply anu Bemanu by analyzing volume, you will give youiself a uistinct tiauing
auvantage ovei the uninfoimeu anu unsuspecting heiu, in oiuei to position youiself wheie
you too can tiaue in haimony with what's going on!"

"The maikets aie manipulateu." I gaspeu. "C'mon Tom," I saiu naively, "We have
iegulatoiy bouies heie in Englanu that pievent all that. I have fiienus in the city who tiaue
anu they woulu laugh if you tolu them that!"

Tom lookeu at me intensely anu saiu, "If you uon't believe me, let me show you on the
chaits. Youi eyes will be openeu to the many oppoitunities on offei if you can inteipiet the
action of the manipulatois."

I was spell bounu. This fellow cleaily knew something that I uiu not. So I let him continue
with my next question being, "So how uo you know all this." (Theie was a ieason why he
was able to ietiie at 4u a veiy wealthy man, as I was to finu out latei.)

"Well uavin, in the late 19Su's, I ueciueu I wanteu to make money. Seiious money. I was in
my late twenties then anu I hau just solu my populai coffee bai, the Whisky uo-uo in
Biighton. I was also a qualifieu iegisteieu nuise so I figuieu I woulu make my way to
1S
Beveily Bills, in Califoinia, since that was wheie the money was. Anu that's exactly what I
uiu.

"When I aiiiveu in the 0niteu States I was foitunate enough to iegistei quickly in Califoinia
as an RN (Registeieu Nuise) anu joineu an agency in Beveily Bills. 0ne of my eailiest
assignments with this agency was woiking foi the family of a veiy wealthy oil tycoon anu
tiauing synuicate membei. The family was ueeply woiiieu about this inuiviuual, (who I
will iefei to as 'ueoige') because he hau a uiug auuiction neeuing to be contiolleu. The
family believeu that a full-time Registeieu Nuise was necessaiy to monitoi his behavioi. I
inteivieweu foi the position anu was chosen shoitly afteiwaius."

"ueoige was the boss of an elite gioup of tiauing synuicates in the 0niteu States. Buiing
that time, they tiaueu mostly theii own money anu some money foi otheis in the stock
maiket. They weie successful, but they shunneu publicity. That was theii natuie, which is
piobably why veiy few people even knew of theii existence."

"Theii basic stiategy was to taiget company stocks anu iemove what they calleu tbe
Ilootinq Supply of that stock if any of it was available on the open maiket. This piocess
coulu take months, sometimes even yeais, but eventually, the synuicate woulu be in
majoiity contiol of that stock. This phase of buying is known as *EE5&5)*1(%.FG

"When geneial maiket conuitions appeai favoiable, the synuicate can then maik up the
piice of the stock, which is suipiisingly easy since they have iemoveu all the Floating
Supply anu Resistance to highei piices. This means that the selleis of the stock have all but
uisappeaieu. It follows that theie is thus veiy little stock left that can be solu once theii
piice ially commences. At some time in the futuie, a point will be ieacheu when the
synuicate will take auvantage of the highei piices obtaineu in the ially to take piofits. This
they uo by beginning to sell the stock back to the uninfoimeu tiaueisinvestois often calleu
the 'Beiu'. This is now calleu the 8(+12(H51(%. 7:*+0. At this point, a hanusome piofit will
be maue foi the synuicate anu its membeis."

I askeu Tom how the synuicate woulu get the 'Beiu' to buy stock at much highei piices
than what the synuicate hau oiiginally paiu. Tom just gave me a big smile as he
iemembeieu the moment he was about to shaie with me.

"Well uavin," he saiu, "I can iemembei, veiy cleaily actually, a paiticulai 0.S. stock which I
believe is still aiounu touay. At that time, they weie calleu Teleuyne Technologies (TBY).
0ui synuicate hau heavily accumulateu them anu it was time to take piofits. To acquiie
this, any tiicks aie faii game. Foi example, we woulu taiget the annual geneial meetings
anu ask bullish questions that woulu often be iepoiteu to the meuia the next uay. We
woulu 'cieate' as much positive news as possible in oiuei to get the ciowu exciteu. Tiue oi
not, it was iiielevant to us, as long as people weie buying the now high-piiceu stock fiom
the synuicate.

"This was veiy piofitable business anu is one of the basic ieasons why theie aie Bull moves
anu Beai moves in the maikets. Its Supply anu Bemanu woiking in the longei teim.
Iionically, the uiiectois of most companies baiely have an iuea of why theii stocks move up
oi uown. Nost will often shiug theii shoulueis if askeu why theii stock hau just fallen 1u%.
They will have no clue why theii stock ueclineu, especially when the company is in bettei
16
shape now than the pievious yeai. To them theie appeais to be no logical ieason why these
moves happen. Bowevei, the synuicates know bettei since they weie actively involveu in
tiauing these stocks up anu uown!"

The moie Tom explaineu the mechanics of how the financial maikets opeiateu, the moie
absoibeu I became. The 4S-minute tuineu pleasantly into an houi anu 4S minutes, anu
befoie long, lunchtime was upon us. I instiucteu my Peisonal Assistant to cancel all my
afteinoon meetings because I hau a feeling this coulu be something potentially veiy big.
Anu now, as I wiite about this impoitant event 9 yeais latei in 2u11, how iight I was!

The Tiaueuuiuei jouiney hau begun. Back then, little uiu I know it, but Tom was giooming
me to be his piotg. I was to leain eveiything he knew anu he woulu teach me to ieau the
chaits just like he uiu.

Tom went to Beveily Bills to finu his foitune wheie he met ueoige, gaineu his tiust anu
confiuence, anu became an establisheu membei of a tiauing synuicate that unueistoou anu
playeu the game only insiueis tiuly unueistoou. It wasn't long befoie Tom was askeu to
stait hanu uiawing the chaits the synuicates woulu use to make theii speculative attacks.
0n his own aumission, Tom's hanu uiawn chaits weie a woik of ait. It tuins out that he
was a natuial when it came to uiawing anu uetail.

The moie Tom got involveu with chaiting the vaiious stocks hanu-pickeu by the synuicate,
the moie inquisitive he became about what was going on with the piice movement, the
volume, anu wheie the piice closeu. Tom constantly askeu the tiaueis in the synuicate foi
infoimation, but they weie fai too busy making money. So finally, they ueciueu to senu
Tom to the Wyckoff Chait Reauing Couise in Paik Riuge, Illinois, just outsiue of Chicago. It
was heie that he finally got a giip on what was happening. Tom iealizeu that all clues weie
in the chaits if you knew how to ieau them coiiectly.

Tom spent twelve happy anu piospeious yeais with the synuicate in Beveily Bills, anu
tiaveleu all ovei the 0.S. netwoiking anu meeting many inteiesting people. By the age of
4u, Tom hau maue enough money to live the iest of his life veiy comfoitably anu ueciueu it
was time to move back to Englanu. Then uuiing his miu-foities, he puichaseu a facility foi
ietiieu folk so he coulu continue his nuising anu fulfill his passion foi helping otheis. Tom
continueu to tiaue as well, but became consumeu with all the knowleuge he hau leaineu
fiom the synuicate anu it's tiaueis back in the 0niteu States. This was also the time when
computeis weie beginning to become moie ieauily available to the geneial public.

Tom hau a biilliant iuea, which he spent the iest of his life ueveloping anu impioving. Be
wanteu to computeiize the Wyckoff HetboJ anu the knowleuge he hau gaineu fiom that
stuuy to piouuce automateu tiauing signals that uiu not have to iely on human
inteivention.

Tom scouieu locally in Toiquay, Bevon, 0K, to finu a piogiammei skilleu enough to
inteipiet his specific instiuctions. The computei woulu neeu to iuentify buy anu sell setups
using volume Spieau Analysis. This methou of analyzing the maiket uoes not use past
piice foimulas, which nevei seem to woik.

Tom was only inteiesteu in:
17

The *EF(G& (i.e. activity),
The +/#&$% (i.e. iange of the piice bai)
The 4FE3& (the point wheie the piice closes on the cuiient bai.)

lts tbe point wbere tbe bor closes tbot is tbe most importont of tbe tbree key onolysis foctors.

Piice closes eithei at the bottom, the miuule, oi the top of the cuiient bai, anu as such is
consiueieu extiemely significant to the analysis.

By goou foitune, Tom stumbleu acioss a newspapei auveitisement foi piogiamming
seivices situateu close to wheie he liveu. Be immeuiately aiiangeu a meeting. Tom was
still unsuie about whethei his iueas weie able to be piogiammeu, let alone give the
accuiate tiaue setups this methouology piouuceu. It was agieeu with the piogiammei,
Robeit Baiwoou that they woulu at least give it a tiy anu see what woulu happen.

Within weeks, the fiist ten inuicatois weie piogiammeu in, anu to theii uttei amazement,
they woikeu! The inuicatois gave cleai anu accuiate signals of imbalances of Supply anu
Bemanu as they appeaieu. As the weeks went on, the inuicatois giew in numbei anu weie
iefineu many times ovei.

As the softwaie piogiesseu to the point of being a usable piogiam, a iumoi spieau
amongst Tom's tiauing fiienus about his new piogiam anu its astonishing accuiacy. Be
began to sell the softwaie foi a small fee to his close fiienus anu colleagues in the business.
Fiom these eaily seeus came the fiist veision of Wyckoff 469 version 1 fiom uenie Softwaie
Ltu., anu the latest incaination aptly nameu, TroJe6uiJer Reol Time onJ FnJ-of-Boy {F0B)
softwore proqrom.

Tom's woik was cleaily giounu bieaking anu hau enhanceu the excellent woik of eaily
19uu's tiauei Richaiu Bemille Wyckoff. Amongst othei things, this man iecognizeu that
tape ieauing was the key to becoming a successful, piofitable tiauei. I ueciueu that this
was an oppoitunity not to be misseu. Tom left the meeting on a sombei note. Be lookeu at
me anu saiu, "uavin, always iemembei that the maiket has to have moie loseis than
winneis. It is uevious. I have nevei heaiu the tiuth about the maiket thiough the meuia."

Let me give you Tom's example of this: the 911 attacks on the Woilu Tiaue Centie. If you
iecall, the maikets closeu foi a week. Buiing that entiie week, the news was hoiiific,
especially the news about the futuie peifoimance of the financial maikets. 0nce the
maikets openeu, they uiu inueeu plummet anu many meuia souices weie pieuicting an
inevitable Beai maiket. uiim-faceu iepoiteis lookeu at you fiom the television scieens,
telling you that billions of uollais weie being wipeu off the maikets, anu that a collapse was
inevitable. 0n the suiface, this news may have been paitly tiue, but the geneial public will
nevei be tolu the whole tiuth. It is highly likely that the self-iegulateu exchanges weie only
too awaie that all theii tiaueis weie fiantically buying fiom the panicking selleis because a
baigain was to be hau. A moie tiuthful meuia iepoit shoulu have saiu this:

"uoou evening lauies anu gentleman. As you know the maikets have ie-openeu touay anu
piices have fallen iapiuly as Piesiuent Bush anu Piime Ninistei Blaii have waineu of
fuithei attacks. This is having a negative impact on stock piices even though on 1u
th

18
Septembei these companies weie in the same shape as they weie on 12
th
Septembei, so
this panic selling seems somewhat iiiational.

"The goou news howevei is that we have uiiect contact with the insiueis anu maiket
specialists on the vaiious exchange floois, anu they have tolu us that theii tiaueis aie busy
buying eveiything that is being solu by the panic-stiicken 'Beiu'. You will see in a week oi
two that this maiket is not Beaiish at all, but Bullish, anu will iise iapiuly as stocks anu
othei instiuments have passeu fiom weak holueis to stiong holueis.

"This will be cleai fiom the massive volume to the uownsiue. Note that the bai has closeu
in the miuule, not on the low; this inuicates that buying must be taking place, anu theiefoie,
contiaiy to what the news is implying, piices will go up, not uown."

Aftei this example, Tom saiu, "uavin, this is an ongoing piocess in vaiying uegiees of
intensity. Remembei, the chait nevei lies if you leain to ieau it coiiectly - anu that is what
I will teach you."

Aftei that uay, I contacteu my business paitnei, Richaiu Beunall, anu tolu him of this gieat
oppoitunity. Aftei some uue uiligence, anu speaking with some of the city tiaueis I knew,
we weie convinceu that this was a most woithwhile ventuie that woulu help ietail tiaueis
anu investois to stait to level the playing fielu, anu give them the oppoitunity to make
money in haimony with the "manipulatois".

Anu so Tom uiu teach me, anu my life changeu. I began to see things I hau nevei seen
befoie. I began to ieau the chait as a musician woulu ieau music. I felt enlighteneu anu
open minueu, seeing things foi what they ieally weie, anu not how they aie iepoiteu in the
mainstieam meuia. I piomiseu Tom I woulu help him continue his woik to show
unenlighteneu tiaueis how to finu the tiuth anu theieby become piofitable in the maikets.

So with that saiu, I hope you enjoy this book. I also hope you ieau it moie than once tiuly
to embiace the knowleuge impaiteu within.

19
4N,A":? P

"N: ',<: 76 8,99 +"?::"Q <,?5:" <,6CA.9,"C76



0n Nay 6
th
, 2u1u something veiy stiange happeneu in the financial maikets. This uay is
now iefeiieu to as the Ilosb Crosb. Even as I wiite about this moie than 6 months aftei
that eventful uay, no cieuible explanation has been pioviueu by the iegulatoiy authoiities
as to exactly what causeu the ciash oi who was iesponsible. In fact, many investois began
to suspect that all was not what it seemeu.

CBNC's 'Closing Bell' anchoi Naiia Baitiiomo was iepoiting on the uay the Ilosb Crosb
happeneu. Below is a tiansciipt of fellow iepoitei Natt Nesto explaining to Baitiiomo
some unusual anomalies in a numbei of stocks, even though the mainstieam meuia claimeu
that it was causeu by a lone tiauei fiom a majoi banking institution hitting the wiong
button. 'B' foi billion was enteieu insteau of an 'N' foi million while tiauing the CNE E-
Nini S&P Futuies! The conveisation went as follows:

(The conveisation is also available to view on Youtube.com. Type in 'Naiia Baitiiomo,
Naiket Nanipulation')

NFST0: "A person fomilior witb tbe Citi investiqotion soiJ one focus of tbe troJinq probes were tbe futures
controcts tieJ to tbe S&P S00 stock inJex known os tbe F-mini S&P S00 futures, onJ in porticulor, tbot two-
minute winJow in wbicb 16 billion of tbe futures were solJ. Aqoin, tbose sources ore tellinq us tbot Citiqroups
totol F-mini volume for tbe entire Joy wos only 9 billion, suqqestinq tbot tbe oriqin of tbe troJes wos elsewbere."

Nesto nameu eight stocks that weie hit with the supposeu computei eiioibau tiaue that
went all the way uown to zeio oi one cent, incluuing Exelon (NYSE:EXC), Accentuie
(NYSE:ACN), CenteiPoint Eneigy (NYSE:CNP), Eagle Nateiial (NYSE:EXP), uenpact Ltu
(NYSE:u), ITC Boluings (NYSE:ITC), Biown & Biown (NYSE:BR0), Casey's ueneial
(NASBAQ:CASY) anu Boston Beei (NYSE:SAN)

NFST0: "Now occorJinq to someone else close to Citiqroups own probe of tbe situotion, tbe F-Hinis troJe on tbe
CHF. Now Horio, l wont to oJJ sometbinq else, just in terms of tbese erroneous troJes tbot Buncon NieJerouer;
tbe NYSF CF0 wos just tolkinq obout. l meon, weve tolkeJ o lot obout Accenture, ACN. Tbis is o Bublin-boseJ
compony. lt's not in ony of tbe inJexes. lf you look in tbe S&P S00, for exomple, l sbow ot leost two stocks tbot
troJeJ to zero or one cent - Fxelon onJ CenterPoint. lf you look in tbe Russell 1000, l sbow Foqle Hoteriols,
6enpoct, lTC onJ Brown & Brown, olso troJinq to zero or o penny, onJ olso Cosey's 6enerol Stores, os well os
Boston Beer troJinq toJoy, introJoy, to zero or o penny. So tbose bove ot leost eiqbt nomes tbot tbey're qoinq to
bove to trock Jown on top of tbe Accenture troJe, wbere we bove tbe stock price introJoy sbowinq us ot leost,
we'll ossume, o boqus troJe of zero."

When Natt Nesto calleu these tiaues 'bogus', host anu CNBC veteian Naiia Baitiiomo
lookeu shockeu anu a little angiy anu ieplieu:

BARTlR0H0: "Tbot is riJiculous, l meon tbis reolly sounJs like morket monipulotion to me. Tbis is outroqeous."

Accoiuing to Nesto, these aie fiequent occuiiences, at least at the NASBAQ exchange, anu if
you make a tiaue anu lose money, theie's no iecouise.

2u
NFST0: "lt boppens o lot, Horio. lt reolly Joes. l meon, we coulJ probobly osk tbe NASBA, tbey moy not wont to
soy bow often it boppens, but it boppens frequently. AnJ tbey qo bock onJ tbey correct. AnJ tbe tbinq tbot stinks
is if you, in qooJ foitb, put in o troJe onJ moJe money onJ tben lost it, you lose it. AnJ tbere's no recourse onJ
tbere's no woy to oppeol."

When I calleu Tom Williams about what happeneu anu I mentioneu that CNBC hau actually
iepoiteu the tiauing activity that uay as maiket manipulation, Tom laugheu anu saiu
jokingly, "I bet theie is a signal in oui Tiaueuuiuei softwaie piogiam showing what we call
a "Sbokeout." To my amazement, I openeu the piogiam anu theie it was. The signal was a
Tiaueuuiuei piopiietaiy signal calleu 'Stiength Numbei 87' anu the softwaie's onboaiu
uialogue box explains the signal as follows:

+7+ RS +N,5:7."

N7":Q None.

@$# ;&32#)/-)E1Q A 'Sbokeout' is a maik uown on a wiue spieau closing up neai the high to shake
out weak holueis. If volume is low, then supply has uiieu up. Bigh volume suggests uemanu
oveicame the supply but iemembei this supply will holu back futuie upwaiu piogiess. If the spieau
is naiiow it will have less impact.

This paiticulai signal is moie geneial anu uoes not neeu to close neai the high of the bai. Exeicise
caution if the bai has gappeu uown as this can inuicate hiuuen weakness. If volume is 0ltia Bigh,
this can be climactic action anu the stait of accumulation.

@$2TJ#E(1%Q The backgiounu is extiemely impoitant. You shoulu see stiength in the backgiounu
with stopping volume oi a selling climax. Is theie some minoi S0W in an uptienu oi has supply hit
the maiket.

>(-(#&Q A 'Sbokeout' on low volume is ieally a violent test anu has the same effect. It shows supply
has uisappeaieu anu you woulu then expect highei piices.

A 'Sbokeout' on high volume shows uemanu was piepaieu to absoib the supply on that bai but they
will likely want to test that supply in the futuie. Any low volume testing back into the aiea of the
Shakeout woulu be a stiong S0S.

Be cautious if the 'Sbokeout' is followeu by low volume up bais, oi high volume up bais closing in
the miuule, especially on a naiiow spieau. If the maiket staits to whipsaw anu goes siueways, it
may be builuing a cause foi the next up move. Remembei, you neeu to look at the oveiall pictuie
not just the inuiviuual bais.

copyriqbt TroJe6uiJer Systems, 2009










21

4N,?" *+, C6"?7



What we witnesseu on that Nay 6
th
was a giant Sbokeout of the maiket. The 'Smait Noney'
opeiatois weie expecting highei piices anu wanteu to catch all the stops befoie moving the
piice up. They weie bullish anu stocks weie going to iise, anu of couise, they wanteu to
buy at the best possible piice. I mean, woulun't you uo the same - buy at the lowest piice
knowing you coulu sell it latei foi much moie than what you bought it foi. That's The
uame on Wall Stieet: Buy low, Sell high. Be a pieuatoi, a clevei pieuatoi that unueistanus
exactly how the piey think anu act. It's like heiuing sheep, steeiing them, iounuing them
up, anu then placing them in a pen.

Whethei we aumit it oi not, human beings aie conuitioneu to act as a heiu anu the meuia
unwittingly play a key iole in helping investois anu tiaueis foim an opinion about tiaueu
instiuments such as stocks, commouities, futuies, oi even Foiex. Like a twisteu veision of
mass hysteiia, when meuia-inuuceu opinions about tiaueu instiuments aie wiong, anu the
majoiity of the uninfoimeu Beiu believe them, it will cost them ueaily. 'Smait Noney'
playeis know how you will act as an investoi oi tiauei. They know how to steei you. They
know the two most poweiful human emotions aie gieeu anu feai, anu those emotions aie
oui woist enemies when it comes to making investment oi tiauing uecisions.

As Naik Twain once saiu, "lf you Jo not reoJ tbe newspoper, you ore uninformeJ, onJ if you
Jo reoJ tbe newspoper, you ore misinformeJ." Latei in this book we will examine why
maikets tenu to uo the opposite of what any noimal peison woulu expect. We will look at
why Biitish Petioleum stock was a gieat buy on }une 2S
th
, 2u1u, when the oil spill ciisis in
the uulf of Nexico was at its woist anu the iumois of Biitish Petioleum going out of
business weie iife. I will also show you how to iuentify piofessional buying (the Smort
22
Honey) on a piice chait. You will be able to iecognize anu piofit fiom buying at the iight
piice, uespite the bau news anu iumois all aiounu you, anu when not to buy oi go shoit
when all the news is goou. Foi an example, we will examine the 0.S. stock, }P Noigan, by
looking at gieat eainings iepoits anu funuamentals, which woulu cieate public expectation
of highei piices, anu then show an immeuiate uiop in the stock piice, which in fact
occuiieu!

So you may be asking, "Is Horket Honipulotion a goou thing oi a bau thing." I feel that if
you can ieau a chait coiiectly, then the volatility causeu when maikets aie 'moveu' is a
veiy goou thing because an euucateu chait ieauei can see with claiity the intentions of the
manipulatois, thus tiauing in haimony with what's happening.

You may also wonuei, "Aie the Naiket Nanipulatois evil beings intent on stealing youi
money." I uon't believe so. These aie clevei inuiviuuals who unueistanu human natuie
anu maiket stiuctuie. Like most who aie successful in any enueavoi, they view theii
activity as a game, anu have acquiieu the knowleuge anu piacticeu skills iequiieu to win.
Like successful pokei playeis, they simply take auvantage of oppoitunities that aiise in
ceitain situations. These inuiviuuals have the financial supiemacy anu unueistanuing of
the financial maikets. They have an euge ovei the ietail investoi oi tiauei, anu they use
this to theii auvantage to make piofits anu gain foi theii own accounts.

At this point you may be thinking, "Why is this chaptei ielevant to making money in the
maikets. Why can't we just go stiaight to the chaits anu all the setups." Well, the ieason
it's vital anu impoitant to know this infoimation is because in oiuei to win the game, you
must fiist accept it exists anu unueistanu it. The aveiage ietail tiauei who uoes not accept
this ieality calls to minu anothei pokei maxim: "If you sit uown at the table anu uon't know
who the patsy is, you'ie the patsy." I uiu not initially accept this as ieality when I fiist met
Tom, but as I began to examine the financial maikets closely, I noticeu consistent patteins.
The chaits always appeaieu to be at ouus with what was on television anu what was
iepoiteu in the financial piess. Latei, I will show you two things happeneu that both
confiimeu my thoughts anu incieaseu my inteiest in the teachings of Tom Williams anu his
methouology of volume Spieau Analysis.

0n Becembei 22
nu
, 2uu6 a viueo was piouuceu anu uploaueu to www.youtube.com. It
became veiy contioveisial. Nany attempts weie maue to iemove it fiom the public uomain.
This viueo was an inteiview with }im Ciamei, the host of CNBC's 'Nau Noney'. }im Ciamei
is a bestselling authoi anu foimei Beuge Funu Nanagei, as well as being the co-founuei
anu Chaiipeison of www.TheStieet.com. In this viueo, Ciamei ieveals how he was able to
influence piices of seveial stocks, incluuing Apple anu Rimm (of Blackbeiiy fame). Below
is a paitial tiansciipt of the inteiview. I have highlighteu the paits that will be inteiesting
foi you to note. (Tbe full interview is ovoiloble on www.youtube.com. Seorcb }im Cromer, Horket
Honipulotion.)




veibatim (paitial) tiansciipt of }im Ciamei on Wall Stieet Confiuential Bec. 22
nu
, 2uu6:

You know, o lot of times wben l wos sbort ot my EeJqe IunJwben l wos positioneJ sbort, meoninq l neeJeJ it
Jownl woulJ creote o level of octivity beforebonJ tbot coulJ Jrive tbe futures. lt Joesn't toke mucb money.
2S
Similorly, if l were lonq, onJ l wonteJ to moke tbinqs o little bit rosy, l woulJ qo in onJ toke o buncb of stocks
onJ moke sure tbot tbey're biqber. Hoybe commit $S million in copitol, onJ l coulJ offect it. Wbot you're seeinq
now is moybe it's probobly o biqqer morket. Hoybe you neeJ $10 million in copitol to knock tbe stuff Jown.

But its o fun qome, onJ its o lucrotive qome. You con move it up onJ tben foJe ittbot often creotes o very
neqotive feel. So let's soy you toke o lonqer term view introJoy, onJ you soy, "listen, l'm qoinq to boost tbe
futures, onJ tbe wben tbe reol sellers come intbe reol morket comes intbey're qoinq to knock it Jown onJ
tbot's qoinq to creote o neqotive view." Tbot's o stroteqy very wortb Joinq wben you're voluinq on o Joy-to-Joy
bosis. l woulJ encouroqe onyone wbo's in tbe beJqe funJ qome to Jo it. Becouse its leqol onJ o very quick woy
to moke money. onJ very sotisfyinq.

By tbe woy, no one else in tbe worlJ woulJ ever oJmit tbot. But l Jont core, onJ lm not qoinq to soy tbot on Tv.
ln tbe next section of tbe interview, Cromer is Jiscussinq wbot struqqlinq beJqe funJs Jo to improve tbeir
performonces before tbe enJ of tbe yeor.

"lt's reolly vitol tbese next six Joys becouse of your poyJoy, you've reolly qot to control tbe morket. You con't let
it lift. Wben you qet o Reseorcb in Hotion, {RlHH) it's reolly importont to use o lot of your firepower to knock
tbot Jown, becouse its tbe fulcrum of tbe morket toJoy. So, lets soy l wos sbort. Wbot l woulJ Jo is l woulJ bit o
lot of quys witb RlHH.

Now you cont foment. Tbots o violotion. You cont creote on impression tbot o stocks Jown. But you Jo it
onywoy becouse tbe SFC Joesnt unJerstonJ it. Tbots tbe only sense tbot l woulJ soy is illeqol. But o beJqe funJ
tbotJ not up o lot reolly bos to Jo o lot now to sove itself.

Tbis is Jifferent from wbot l wos tolkinq obout ot tbe beqinninq wbere l wos tolkinq obout buyinq tbe s onJ
stuff. Tbis is octuolly blotontly illeqol. But wben you bove six Joys onJ your compony moy be in Joubt becouse
you're Jown, l tbink it's reolly importont to fomentif l were one of tbese quysfoment on impression tbot
Reseorcb in Hotion {RlHH) isn't ony qooJ becouse Reseorcb in Hotion {RlHH) is tbe key toJoy.

Ciamei goes on to talk about the actual mechanics of what one woulu uo to knock Reseaich
in Notion uown. Then he continues:

lf l wonteJ it to qo biqber, l woulJ toke onJ biJ, toke onJ biJ, toke onJ biJ, onJ if l wonteJ it to qo lower, l'J bit
onJ offer, bit onJ offer, bit onJ offer. AnJ l coulJ qet o stock like RlHH for moybetbot miqbt cost me $1S to
$20 million to knock RlH Jownbut it woulJ be fobulous becouse it woulJ beleoquer oll tbe moron lonqs wbo
ore olso keyinq on Reseorcb in Hotion.

So we're seeinq tbot. Aqoin, wben your compony is in survivol moJe, it's reolly importont to Jefeot Reseorcb in
Hotion, onJ qet tbe Pisonis of tbe worlJ onJ people tolkinq obout it os if tbere's sometbinq wronq witb RlHH.
Tben you woulJ coll tbe }ournol onJ you woulJ qet tbe Bozo reporter on Reseorcb in Hotion onJ you woulJ feeJ
tbot Polms qot o killer tbots qoinq to qive owoy. Tbese ore oll tbe tbinqs you must Jo in o Joy like toJoy, onJ if
youre not Joinq it, tben moybe you sboulJnt be in tbe qome.

Ciamei talks foi a while in consiueiable uetail about how, if he weie shoit Apple's stock
touay, he woulu knock Apple's stock uown. Then he says:

Wbots importont wben youre in tbot beJqe funJ moJe is to not Jo onytbinq remotely trutbful.
becouse trutb is so oqoinst view tbot its importont to creote o new trutb to Jevelop o fiction.

A minute latei, when talking about how company funuamentals uon't mattei, Ciamei says:

Tbe qreot tbinq obout tbe morket is it bos notbinq to Jo witb tbe octuol stocks. Now, moybe two weeks from
now, tbe buyers will come to tbeir senses onJ reolize tbot everytbinq tbot tbey beorJ wos o lie, but tben oqoin,
Ionnie Hoe lieJ obout tbeir eorninqs for $6 billion, so tbere's just fiction onJ fiction onJ fiction.

l tbink it's importont for people to recoqnize tbot tbe woy tbot tbe morket reolly works is to bove tbot nexus of:
Eit tbe brokeroqe bouses witb o series of orJers tbot con pusb it Jown, tben leok it to tbe press, onJ tben qet it on
24
CNBCtbot's olso very importont. AnJ tben you bove o kinJ of o vicious cycle Jown. lt's o pretty qooJ qome. lt
con poy for o percentoqe or two". -ENB


0n Naich 12
th
, 2uu9, }im Ciamei's YouTube viueo came back to haunt him as exceipts weie
finally playeu on national television. It wasn't on the financial netwoiks as one woulu
expect, but these exceipts weie playeu on Comeuy Cential in an excellent inteiview on the
Baily Show with }on Stewait. }on Stewait is well known in the 0niteu States foi not
mincing woius anu being a haiu hittei.

}S is }ohn Stewait, }C is }im Ciamei, anu the woiu 'sbenoniqons is useu to uesciibe the
manipulation. Call it by a uiffeient name, it's all the same thing! This tiansciipt was taken
fiom www.maholo.com anu I woulu like to give cieuit to Baicy Logan foi the effoit to wiite
the tiansciipt:

}S: Eow tbe bell JiJ we enJ up bere, Hr. Cromer? Wbot boppeneJ?

}C: l Jont know. l Jont know. Biq fon of tbe sbow. Wbos never soiJ tbot?

}S: Well, mony people. let me just exploin to you very quickly one tbinq tbot is somewbot misinterpreteJ. Tbis
wos not JirecteJ ot you, per soy. l just wont you to know tbot. We tbrew some bonono creom pies ot CNBC.
0bviously, you qot some scbmutz on your jocket from it. Took exception.

}C: l tbink tbot everyone coulJ come unJer criticism from it. l meon, we oll sboulJ bove seen it more. l meon,
oJmitteJly tbis is o terrible one. Fveryone qot it wronq. l qot o lot of tbinqs wronq becouse l tbink it wos kinJ of
one in o million sbot. But l Jont tbink onyone sboulJ be sporeJ in tbis environment.

}S: So, tben, if l moy, wby were you moJ ot us? --Auuience laughs--

}C: No.

}S: Becouse l wos unJer tbe impression tbot you tbouqbt we were beinq unfoir.

}C: No, you bove my frienJ }oe Nosoir onJ }oe colleJ me onJ soiJ, }im, Jo l neeJ to opoloqize to you? onJ l soiJ,
No. Were foir qome. Were biq network. Weve been out front. Weve moJe mistokes. We bove 17 bours of live Tv
o Joy to Jo. But l

}S: Hoybe you coulJ cut Jown on tbot. --Auuience laughs--
So let me tell you wby l tbink tbis bos couseJ some ottention. lts tbe qop between wbot CNBC oJvertises itself os
onJ wbot it is onJ tbe belp tbot people neeJ to Jiscern tbis. let me sbow you. Tbis is tbe promo for your sbow.

}C: 0koy.

UUVC1 4#$G&# 8& "#(3-W /#EGEWUU

}S: lsnt tbot, you know, lookwe ore botb snoke oil solesmen to o certoin extent--

}C: lm not Jiscerninq.

}S: But we Jo lobel tbe sbow os snoke oil bere. lsnt tbere o problem witb sellinq snoke oil onJ lobelinq it os
vitomin tonic onJ soyinq tbot it cures impetiqo etc. etc. etc. lsnt tbot tbe Jifficulty bere?

}C: l tbink tbot tbere ore two kinJs of people. People come out onJ moke qooJ colls onJ boJ colls tbot ore
finonciol professionols onJ tbere ore people wbo soy tbey only moke qooJ colls onJ tbey ore liors. l try reolly
borJ to moke os mony qooJ colls os l con.

2S
}S: l tbink tbe Jifference is not qooJ coll,boJ coll. Tbe Jifference is reol morket onJ unreol morket. let me sbow
you.tbis is.you ron o beJqe funJ.

}C: Yes l JiJ.

UU;&2&GX&# PPY PZZ[ D)%&E EI \)G 4#$G&#UU
" You know a lot of times when I was shoit at my heuge funu anu I was position shoit, meaning I neeueu it
uown, I woulu cieate a level of activity befoiehanu that coulu uiive the futuies. It uoesn't take much money." U
U:1% *)%&EUU

}S: Wbot Joes tbot meon?

}C: 0koy, tbis wos o just o byperbolic exomple of wbot people You boJ o qreot piece obout sbort sellinq eorlier.

}S: Yes, l wos

}C: l bove been tryinq to reiqn in sbort sellinq, tryinq to expose wbot reolly boppens. Tbis is wbot qoes on, wbot
lm tryinq to soy is, l JiJnt Jo tbis but lm tryinq to exploin to people tbis is tbe sbenoniqons tbot

}S: Well, it sounJeJ os if you were tolkinq obout tbot you boJ Jone it.

}C: Tben l wos inorticulote becouse l JiJ-- l borely troJeJ tbe futures. let me soy tbis: l om tryinq to expose tbis
stuff. Fxoctly wbot you quys Jo onJ l om tryinq to qet tbe requlotors to look ot it.

}S: Tbots very interestinq becouse... roll 2:10!

UUPOZ D)%&EUU K"H)3 )3 /$#- EI -H& BE("(X& D)%&E %)32(33&% &$#F)&#M
}C: I woulu encouiage anyone who is in the heuge funu unit to 'uo it' because it is legal. It is a veiy quick way
to make money anu veiy satisfying. By the way, no one else in the woilu woulu evei aumit that but I uon't
caie.
0thei guy: That's iight anu you can say that heie.
}C: Neans I'm not going to say it on Tv. UU:1% D)%&EUU

}C: lts on Tv now.

}S: l wont tbe }im Cromer on CNBC to protect me from tbot }im Cromer.

}C: l tbink tbot woy you Jo tbot is to sbow0koy, tbe requlotors wotcb tbe tope tbey reolize tbe sbenoniqons
tbot qo on, tbey con qo ofter tbis. Now, tbey JiJ cotcb HoJoff, tbots o sbome.
}S: Now wby wben you tolk obout tbe requlotors, wby not tbe finonciol news networks? Tbot is tbe wbole point
of tbis? CNBC coulJ be on increJibly powerful tool of illuminotion for people tbot believe tbot tbere ore two
morkets: 0ne tbot bos been solJ to us os lonq term. Put your money in 401Ks. Put your money in pensions onJ
just leove it tbere. Bont worry obout it. lts oll Joinq fine. Tben, tberes tbis otber morket; tbis reol morket tbot is
occurrinq in tbe bock room. Wbere qiont piles of money ore qoinq in onJ out onJ people ore troJinq tbem onJ
its tronsoctionol onJ its fost. But its Jonqerous, its etbicolly Jubious onJ it burts tbe lonq-term morket. So
wbot it feels like to usonJ lm tolkinq purely os o loymonit feels like we ore copitolizinq your oJventure by
our pension onJ our borJ eorneJ money. AnJ tbot it is o qome tbot you know. Tbot you know is qoinq on. But
tbot you qo on television os o finonciol network onJ pretenJ isnt boppeninq.

}C: 0koy. Iirst, my first reoction is obsolutely we coulJ Jo better. Absolutely, tberes sbenoniqons onJ we sboulJ
coll tbem out. Fveryone sboulJ. l sboulJ Jo o better job ot it. But my seconJ tbinq is, l tolk obout tbe sborts every
sinqle niqbt. l qot people in Conqress wbo lve been workinq witb tryinq to qet tbe uptick rule. lts o tecbnicol
tbinq but it woulJ cut Jown o lot of tbe qomes tbot you ore tolkinq obout. lm tryinq. lm tryinq. Am l succeeJinq?
lm tryinq.

}S: But tbe qentlemon on tbot viJeo is o sober rotionol inJiviJuol. AnJ tbe qentlemon on HoJ Honey is tbrowinq
plostic cows tbrouqb bis leqs onJ sboutinq, "Sell! Sell! Sell!" onJ tben cominq on two Joys loter onJ qoinq, "l wos
wronq. You sboulJ bove bouqbt like--l cont reconcile tbe brillionce onJ knowleJqe tbot you bove of tbe
26
intricocies of tbe morket witb tbe crozy bullsb** you Jo every niqbt. Tbots Fnqlisb. Tbots treotinq people like
oJults.

}C: Eow obout if l try it?

}S: Try wbot?

}C: Try Joinq tbot. lll try tbot.

}S: Tbot woulJ be qreot, but its not just you. lts lorqer forces ot work. lt is tbis iJeo tbot tbe finonciol news
networks ore not just quilty of o sin of omission but o sin of commission. Tbot tbey ore in beJ witb tbem.

}C: No, were not in beJ witb tbem. Come on. l Jont tbink tbots foir. Eonestly. l tbink tbot we try to report tbe
news onJ l tbink tbot people

}S: A couple of quys Jo. Tbis quy Iober-

}C: Ees fobulous, Iober.

}S: AnJ moybe two otber quys.

}C: Ees fobulous onJ bes Jone some tbinqs tbot bove reolly blown tbe cover off o lot of stuff.

}S: But tbis tbinq wos ten yeors in tbe mokinq.

}C: Riqbt.

}S: AnJ its not qoinq to be fixeJ tomorrow. But tbe iJeo tbot you coulJ bove on tbe quys from Beor Sterns onJ
Herrill lyncb, onJ quys tbot boJ leveroqeJ SS to 1.

}C: l know.

}S: AnJ tben blome mortqoqe bolJers. l meon- tbots insone.

}C: l never JiJ tbot -- 0nintelliqible -- lm sorry Youre obsolutely riqbt. l olwoys wisb tbot people woulJ sweor
tbemselves in before tbey come on tbe sbow. lve boJ o lot of CF0s lie to me on tbe sbow. lts very poinful. l Jont
bove subpoeno power.
}S: But JontYoure pretenJinq tbot you ore o Jew-eyeJ innocent. Wotcb. Roll. l meon, if l moy. }C: lts your
sbow for beovens soke.

}S: Roll 2:12.

}C: No! Not 2:12!

UUPQOP AF$]3 BE( "(X& *)%&E 71 6$-)E1$F "* ^K"H)3 )3 -H& BE( "(X& D)%&E %)32(33&% $XED&Y 1E-&
4#$G&# )3 1E- D&#] T&&1 -E H$D& -H)3 3HE_1 E1 1$-)E1$F "*``ML
}C: You know.

}S: l qotto tell you. l unJerstonJ tbot you wont to moke finonce entertoininq, but its not o f***inq qome. Wben l
wotcb tbot l qet, l cont tell you bow onqry it mokes me becouse it soys to me, "You oll know." You oll know
wbots qoinq on. You con Jrow o stroiqbt line from tbose sbenoniqons to tbe stuff tbot wos beinq pulleJ ot Beor
onJ ot Al6 onJ oll tbis Jerivotive morket stuff tbot is tbis weirJ Woll Street siJe bet.

}C: But }on, Jont you wont quys like me tbot bove been in it to sbow tbe sbenoniqons? Wbot else con l Jo? l meon,
lost niqbts sbow---

}S: No, no, no, no, no. l wont Jesperotely for tbot, but l feel like tbots not wbot were qettinq. Wbot were qettinq
is. listen, you knew wbot tbe bonks were Joinq onJ yet were toutinq it for montbs onJ montbs. Tbe entire
27
network wos onJ so now to pretenJ tbot tbis wos some sort of crozy, once-in-o-lifetime tsunomi tbot noboJy
coulJ bove seen cominq is Jisinqenuous ot best onJ criminol ot worst.

}C: But Bick Ioqle, wbo ron lebmon Brotbers, colleJ me in wben tbe stock wos ot 40 becouse l tbouqbt tbot tbe
stock wos wronq, l tbouqbt tbot it wos tbe wronq ploce for it to be. Ee brinqs me in, lies to me, lies to me, lies to
me. lve known bim for twenty yeors.

}S: Tbe CF0 of o compony lieJ to you.

}C: Sbocker stock troJinq.

}S: But isnt tbot finonciol reportinq? Wbot Jo you tbink is tbe role of CNBC?

}C: look, l bove colleJ for stor cbombersl wont konqoroo courts for tbese quys. l bove not seen ony inJictments.
Wbere ore tbe inJictments? Wbere ore tbe inJictments for Al6? l tolJ tbe }ustice Beportment, "Eeres tbe woy
you qet tbe inJictment."

}S: lts very eosy to qet on tbis ofter tbe foct. Tbe meosure of tbe network, onJ tbe meosure of mess. CNBC coulJ
oct osNo one is oskinq tbem to be o requlotory oqency, but contbut wbose siJe ore tbey on? lt feels like tbey
bove to reconcile os tbeir ouJience tbe Woll Street troJers tbot ore Joinq tbis for constont profit on o Joy-to-Joy
for sbort term. Tbese quys componies were on o Sbermons Horcb tbrouqb tbeir componies finonceJ by our
401ks onJ oll tbe incentives of tbeir componies were for sbort-term profit. AnJ tbey burneJ tbe f***inq bouse
Jown witb our money onJ wolkeJ owoy ricb os bell onJ you quys knew tbot tbot wos qoinq on.

}C: l bove o woll of sbome. Wby Jo l bove bonono creom pies? Becouse l tbrow tbem ot CF0s. Bo you know bow
mony times l bove pontseJ CF0s on my sbow?

}S: But tbis isnt, os Corly Simon woulJ soy, tbis sonq oint obout you.

}C: 0koy. All riqbt. Youre riqbt. l Jont wont to personolize it. l tbink we bove reporters wbo try reolly borJ.
Were not olwoys tolJ tbe trutb. But most importontly, tbe morket wos qoinq up for o lonq time onJ our reol sin l
tbink wos to believe tbot it wos qoinq to continue to qo up o lot in tbe foce of wbot you just JescribeJ. A lot of
borrowinq. A lot of sbenoniqons onJ l know l JiJ, lll brinq it up, l JiJnt tbink Beor Sterns wos qoinq to
evoporote overniqbt. l JiJnt. l knew tbe people wbo ron it, l olwoys tbouqbt tbey were bonest. Tbot wos my
mistoke. l reolly JiJ. l tbouqbt tbey were bonest. BiJ l qet token in becouse l knew tbem from before? Hoybe to
some Jeqree. Tbe quy wbo come on from Wocbovio wos on olJ frienJ of mine wbo belpeJ bire me.

}S: But bonest or not, in wbot worlJ is o SS to 1 leveroqe position sone?

}C: Tbe worlJ tbot moJe you S0% yeor ofter yeor ofter yeor beqinninq from 1999 to 2007 onJ it become

}S: But isnt tbot port of tbe problem? Sellinq tbis iJeo tbot you Jont bove to Jo onytbinq. Anytime you sell people
tbe iJeo tbot sit bock onJ youll qet 10 to 20 percent on your money, Jont you olwoys know tbot its qoinq to be o
lie? Wben ore we qoinq to reolize in tbis country tbot our weoltb is work. Tbot were workers onJ by sellinq tbis
iJeo tbot of "Eey mon, lll teocb you bow to be ricb." Eow is tbot ony Jifferent tbon on infomerciol?

}C: Well, l tbink tbot your qool sboulJ olwoys be to try to expose tbe foct tbot tbere is no eosy money. l wisb l boJ
founJ HoJoff.

}S: But tbere ore literolly sbows colleJ "Iost Honey."

}C: l tbink tbot people. Tberes o morket for it onJ you qive it to tbem.

}S: Tberes o morket for cocoine onJ bookers. Wbot is tbe responsibility of tbe people wbo cover Woll Street?
Wbo ore you responsible to? Tbe people witb tbe 401ks onJ tbe pensions onJ tbe qenerol public or tbe Woll
Street troJers, onJ by tbe woy tbis costs on ospersion on oll of Woll Street wben l know tbots unfoir os well. Tbe
mojority of tbose quys ore workinq tbeir o***s off. Tbeyre reolly briqbt quys. l know o lot of tbem. Tbeyre just
tryinq to Jo tbe riqbt tbinq onJ tbeyre qettinq f***eJ in tbe oss, too.
28

}C: True. True. l tbink os o network we proJuce o lot of interviews wbere l tbink tbot we bove beentbere bove
been people wbo bove not tolJ tbe trutb. SboulJ we bove been constontly pointinq out tbe mistokes tbot were
moJe? Absolutely. l truly wisb we boJ Jone more. l tbink tbot we bove been very touqb on tbe previous Treosury
Secretory, very touqb on tbe previous oJministrotion bow tbey JiJnt qet it, very touqb on Ben Bernonke. But ot
tbe some time.

}S: But bes tbe quy wbo wrote tbe rule tbot olloweJ people to over-leveroqe.

}C: l trosb bim every niqbt. lve colleJ bim o lior on Tv. Wbot om l qoinq to Jo? SboulJ we oll coll bim liors? lm o
commentotor. We boveonJ you con toke issues witb tbe foct tbot l tbrow bulls onJ beors onJ l con still be
consiJereJ serious. lm not Fric SevoreiJ. lm not FJworJ R. Horrow. lm o quy tryinq to Jo on entertoinment
sbow obout business for people to wotcb. But its Jifficult to bove o reporter to soy l just come from on interview
witb Eonk Wilson onJ be lieJ bis Jorn fool beoJ off. lts Jifficult. l tbink it cbollenqes tbe bounJories.

}S: Yeob. lm unJer tbe ossumption, onJ moybe tbis is purely riJiculous, but lm unJer tbe ossumption tbot you
Jont just toke tbeir worJ for it ot foce volue. Tbot you octuolly tben qo orounJ onJ try onJ fiqure it out. So,
oqoin, you now bove become tbe foce of tbis onJ tbot is increJibly unfortunote.

}C: l wisb l boJ Jone o better job tryinq to fiqure out tbe S0 to 1 onJ wbetber it wos qoinq to blow up. lt JiJ. 0nce
it JiJ l wos lote it soyinq it wos boJ.

}S: So moybe we coulJ remove tbe finonciol expert onJ tbe "ln Cromer we Trust" onJ stort qettinq bock to
funJomentols on reportinq os well onJ l con qo bock to mokinq fort noises onJ funny foces.

}C: l tbink we moke tbot Jeol riqbt bere.

UU:1% EI C1-&#D)&_^


0n Novembei 28
th
, 2u1u on NSNBC's online 0.S. Business iepoit, I ieau an aiticle
heaulineu 'FveryJoy lnvestors WonJer if Horket is RiqqeJ.' This iepoit was the most
inteiesting aiticle I have evei seen in mainstieam meuia. It went on to say, "The Wall
Stieet insiuei tiauing investigation may leau eveiyuay investois - alieauy iattleu by a
stock maiket meltuown, a one uay Flash Ciash, anu the Nauoff scanual - to finally concluue
that the game is iiggeu. viitually eveiyone on the Stieet believes theie aie significant
impiopiieties, anu I think theie is an even moie impoitant point foi the massive numbei of
investois who aie not Wall Stieet playeis," says foimei New Yoik uoveinoi Eliot Spitzei.

Be was known as the 'Sheiiff of Wall Stieet' when he aggiessively piosecuteu white-collai
ciime while State Attoiney ueneial. "Anu that is foi most of us, you can't beat these guys at
theii own game. Some pios on Wall Stieet say hesitation by small investois is goou news.
It means that theie's plenty of 'uiy powuei' to piopel the maiket highei in the next few
months when anu if the little guy finally ielents anu joins in the ially." The iecoiu foi
heuge funus hasn't been so impiessive, eithei. Since 2uu8, when the numbei of those funus
hit 1u,uuu, neaily S,uuu have gone out of business, accoiuing to Beuge Funu Reseaich in
Chicago.

"The euge is hugely exaggeiateu," says Richaiu Feiii, an auvocate of low-cost inuex funus
anu founuei of the investment auvisoiy fiim, Poitfolio Solutions, "If the small investoi
"Joes tbe riqbt tbinq", he can uo 99 peicent bettei than anyone else."

I totally agiee with Ni. Feiii. If the small investoi Joes tbe riqbt tbinq then theie is a goou
chance that he oi she can be successful. Boing the iight thing, in my opinion, staits by
29
leaining what the game is, anu then leaining how to ieau Supply anu Bemanu imbalances
as they appeai on the chaits, along with following a few simple iules.

So aie the ietail tiaueis anu investois finally waking up to the tiue mechanics of the
maikets. Anu if so, can they take auvantage of maiket manipulation. I woulu say that
uepenus on the inuiviuual. By ieauing this book, you aie alieauy on youi way to
iecognizing gieat tiauing anu investing oppoitunities. We uon't ieally neeu to be
conceineu about the whys, what, ifs, anu buts of the maiket, but we uo neeu to be thinking
anu acting in haimony with the Smort Honey. To uo so involves a little bit of ieseaich anu
effoit on youi pait to act, think, anu ieact like a pieuatoi, not the piey- anu that is what I
am going to teach you in this book.

Theie is public mateiial ieauily available on the subject of Naiket Nanipulation, so I wont
uwell on that subject any longei. The maikets have been the same foi hunuieus yeais anu
they aie veiy unlikely to change in the futuie. Lots of infoimation anu useful tips aie
available at www.maiketmanipulation.com. This site conuenses much of the public
infoimation on the Inteinet. I highly suggest you visit the site with an open minu anu
ueciue foi youiself. We all have uiffeient belief systems, but I iecommenu you use youi
minu like a paiachute - which is best useu when you open it!

Su
4N,A":? a

"N: b+<,?" <76:Bc ,6; "N: b67"U+7U+<,?" <76:Bc



In Chaptei Two, we analyzeu the mechanics of the financial maikets, anu now we aie going
to look at some of the common pitfalls expeiienceu by many tiaueis anu investois of
uiffeient skill levels that cause losses. Remembei that S,uuu heuge funus went out of
business in 2uu8-2uu9, so even the Big Playeis can get it wiong. Bowevei, when you can
ieau the imbalances of Supply anu Bemanu- in any time fiame oi maiket -money can be
maue when the maiket is moving up oi uown, although it can be a little moie uifficult to
ieau when the maiket moves siueways, as I will show you.

In Tom Williams' two books, "Tbe 0nJecloreJ Secrets Tbot Brive tbe Stock Horket" anu
"Hoster tbe Horkets", Tom iefeis to the 'Not-So-Smort Honey' as 'Tbe EerJ. Now lets
examine the actual uefinition of what a heiu is anu how that can be applieu to the financial
maikets.

;&I)1)-)E1Q H&#% d .%5.

- A laige gioup of animals, especially hoofeu mammals.
- Beiogatoiy: a laige gioup of people, typically with a shaieu chaiacteiistic


Inteiestingly, the uictionaiy teim shows a heiu of people as ueiogatoiy, but in fact, as Tom
explaineu to me, human beings often act as a heiu. A gieat example that I have obseiveu,
not only in Chicago wheie I live, but also all ovei the woilu, is when a stoie has a
maikuown sale. As you may know, Block IriJoy in the 0SA is when ietail stoies offei the
biggest uiscounts on the fiist Fiiuay aftei Thanksgiving. Bunuieus, sometimes thousanus
of people wait, even camp out foi 2 uays, just foi stoies to open at S:uuam oi eailiei.
People go thiough this tiouble just to get a baigain. Supposeuly they want to feel goou
about saving money anu making a gieat puichase!

So what happens when the uoois open at S:uuam. Nost often than not, the ciowu
stampeues like a heiu to iush to the items they want, in feai that someone else may take
the cheiisheu items anu theie will be none left. In fact, in 2uu8 a Wal-Nait secuiity guaiu
was killeu in a stampeue on Block IriJoy in Long Islanu New Yoik. The New Yoik Times
heauline ieau, "Wal-Nait Woikei Tiampleu to Beath by Fienzieu Black Fiiuay Shoppeis".

Bow uoes this apply to tiauing anu investing. Simple - the veiy emotions expeiienceu by
those wanting to get the baigain piices aie the same as those expeiienceu by almost eveiy
human who tiaues the maikets. Bowevei, the gioup we call the 'Smait Noney' aie veiy
intelligent anu fully unueistanu the unueilying ieasons why people buy anu sell at ceitain
times, as well as what membeis of the 'Beiu' base theii uecisions on. Whilst pioviuing
euucational seminais anu live tiauing events on my tiavels aiounu the woilu, I have met
thousanus of ietail tiaueis anu investois.

S1
I finu that theie aie S main analytic tools (anu I use that teim loosely) that 'The Beiu' use
to tiaue anu make investments. I can assuie you that these foims of analysis aie the ieason
so few ietail tiaueis anu investois make money in the maikets. In no paiticulai oiuei:

- Technical analysis using back testeu past piice analysis anu foimulas
- Recommenuations fiom television, newspapeis, biokeis etc.
- Funuamental analysis especially when expeit analysts suggest an instiument will move a
ceitain uiiection (we will examine this moie closely in a moment)
- 'Black Box' softwaie systems anu tiauing iobots that piomise guaiantees of iiches by giving
buy anu sell signals. Accoiuing to the auveitising anu maiketing claims, they allegeuly piouuce
amazing iesults with guaianteeu peicentage ietuins
- Tips ieceiveu thiough email, Facebook, Twittei, anu othei social meuia souices. 0nless
these aie fiom a veiy tiusteu anu pioven souice, bewaie!


Theie aie two facts that I've leaineu eaily on as I began my jouiney as a *+, expeit, which
have seiveu me well whenevei I analyze the maikets:

(1) The chait nevei lies.
(2) The past piice uoes not move the futuie piice.

In oiuei to piove these two facts, we will examine the ciuue oil chaits of 2uu8. Nany of
you will iemembei that the gaspetiol piices skyiocketeu aiounu the woilu anu oil was
supposeuly in scaice supply. Some of the woilu's top oil analysts weie pieuicting a piice of
$2uu a baiiel. {lronicolly, two yeors loter, tbe BP spill boppeneJ cousinq mony scientists to
express tbeir concern tbot if tbe oil well wosnt coppeJ, it woulJ qusb inJefinitely!)

Now lets take a look at what actually happeneu. You can see foi youiself just how
influenceu one becomes when you see anu heai infoimation that all points in one uiiection.
In this case, oil was to go to $2uu a baiiel, anu many tiaueis, investois, anu inueeu, even
aiilines got caught on the wiong siue of the oil maiket because they uiu not know what the
chait was telling them. But as a soon-to-be *+, expeit, you will know bettei in the futuie!

6&_3 ,#-)2F& OQ Stoiy, L. (2uu8, Nay 21). An 0iacle of 0il Pieuicts $2uu-a-Baiiel Ciuue. New York
Times. Retiieveu Nay 1
st
, 2u11. Fiom http:www.nytimes.com2uu8uS21business21oil.html

An 0iacle of 0il Pieuicts $2uu-a-baiiel ciuue - Nay 21
st
, 2uu8 (exactly S weeks befoie
supplyselling came in heavily, as we shall see) The Chait Nevei Lies - The WEEKLY 0il
Futuies 0sing Tiaueuuiuei RT Softwaie with volume Spieau Analysis Signals
S2










SS
4N,?" *+, O



Looking at the week enuing }une 1S
th
, 2uu8, we can see that unusually high volume appeais
on the 4H$#- *+, O anu the iange oi spieau of the bai on that week is veiy naiiow. 0n the
uaily chait (not shown), we hau a signal appeai calleu Tbe FnJ of o Risinq Horket in the
Tiaueuuiuei softwaie. Combineu with the signals that appeaieu, the following thiee weeks
convinceu me that this maiket was being solu on all this bullish news. I ueciueu to post my
analysis on YouTube anu I waineu of the weakness anu impenuing fall of oil (this is still
viewable on YouTube. I also want to point out that this was posteu in foiesight, not
hinusight). I ieceiveu hunuieus of abusive emails questioning my analysis, anu ciiticizeu
foi not being a famous analyst as well as uaiing to question the mainstieam meuia iepoits.
I was iiuiculeu fiom many ciicles but I hau faith in my chait ieauing skills anu was
subsequently vinuicateu as oil piices plummeteu to aiounu $S4.uu a baiiel.

0n *+, 4H$#- O, examine the thiee bais with the volume Spieau Analysis signals (look at
the ieu tiiangles shown at the top pointeu out by thiee ieu aiiows shown). Note that as
the maiket piices aie iising, the volume is falling week by week. 0nly one thing can cause
this fall in volume, anu that is the lack of inteiest in highei piices by the 'Smort Honey
ployers. Tbey boJ olreoJy storteJ sellinq in tbe prior weeks! The logic is that if they aie not
paiticipating, we will see low volume, anu in the Tiaueuuiuei softwaie we iefei to this
scenaiio as 'No BemonJ ot o Horket Top


S4
4N,?" *+, P



At bais A anu B on 4H$#- *+, P, we now see the tiue confiimation of the weokness that has
appeaieu in the backgiounu. (By bockqrounJ we meon tbe previous number of bors wbicb
inJicote tbe morket price oction, wbicb will eitber be bullisb or beorisb, wbicb we refer to os
weok or stronq). Bue to the obseiveu weakness, it's at this point we woulu stait to consiuei
shoiting the maiket. It's impeiative to iemembei that we want to shoit when the
uowntienu is confiimeu - not befoie. The Tiaueuuiuei softwaie has thiee veiy simple
tienuing systems that show this (I will explain in uetail in Chaptei 11 - Some Basic volume
Spieau Analysis Tiaue Setups Explaineu).

As you look at 4H$#- *+, P, you can see these tienuing systems wheie the uowntienu is
confiimeu by the ieu bais, the ieu uiamonus, anu the ieu, pink, anu black aiiows above the
bais (these aie piopiietaiy tools incoipoiateu in the Tiaueuuiuei softwaie). This example
is the woik of piofessional tiauei, Robeit Boffman. The tools aie available as an auu-on
stuuy within the Tiaueuuiuei poitfolio of piouucts.

If you hau been using any type of technical analysis that examineu past piice in an attempt
to pieuict the futuie piice of the chaits shown, you may as well have accepteu that oil
woulu be going to $2uu a baiiel. Past piice analysis tools, which by theii veiy natuie aie
lagging not leauing euge inuicatois, (e.g. NACB, Stochastics, & RSI) weie giving multiple
buying signals at $147.uu because the piice was iising.

We hau also exceeueu many of the stanuaiu moving aveiage peiious (such as 2u uay NA),
which maue the tienus bullish, anu the news fiom the analysts confiimeu eveiything you
weie seeing on the technical chaits. Bowevei, once you aie able to coiiectly ieau anu
analyze Supply anu Bemanu fiom the chaits, you can combine volume Spieau Analysis
SS
with youi cuiient technical anu funuamental analysis. By uoing so, you aie giving youiself
a tiauing euge which will enable you to make intelligent, infoimeu, anu (hopefully)
piofitable tiauing uecisions uue to the fact that its possible to obseive the intent of the
'Smait Noney'. Nany of oui most successful customeis have combineu *+, with theii
cuiient tiauing style anu methous of analysis. Bowevei, we have come to notice that theie
aie many who have set asiue much of what they have pieviously leaineu anu begun to
focus solely on the volume SpreoJ Anolysis methouology.

It's impoitant to iemembei, that when the 'Smait Noney' playeis stait selling, they will sell
as piice iises! This confuses many uninfoimeu tiaueis anu investois that have been
waiting on the siuelines, heaiing the goou news. What they uo is jump onto the iising piice
'banuwagon' (a.k.a. "suckeis ially") only to get hammeieu by the effect of the 'Smait
Noney's' piioi selling positions, which iesults in the piice 'uiopping off the cliff'. This
causes embaiiasseu 'banuwagon' buyeis to eithei get out of theii tiaues at bieakeven, oi
suffei the pain of losses as stops aie hit. This is known as 'Stop Bunting'. This phase by its
natuie anu intent effectively cieates piofits foi the 'Smait Noney', anu maiks the piice
back uown anu cieates the scenaiio foi moie buying (if they aie bullish) oi heavy selling, as
seen in the ciuue oil examples, which maik the maiket top.

Remembei, that by its veiy natuie, eveiy bai contains a combination of buying anu selling,
anu theiefoie the ait of ieauing the chait becomes a combination of inJiviJuol bor volume
onolysis, as well as the analysis of the 'backgiounu' bais, in oiuei to come to the conclusion
as to the intent of the paities involveu in cieating the cuiient anu backgiounu bais. It's this
concept, which many tiaueis finu uifficult to unueistanu, but once giaspeu, youi iewaiu
will be that the chait will come alive in fiont of youi eyes!

Reauing this book, absoibing its knowleuge, anu examining volume veiy closely by paying
attention to 0ltro Eiqb anu 0ltro low volume, you can become a 'Smait Noney' tiauei anu
investoi youiself, anu can avoiu the costly pitfalls expeiienceu by the Not-So-Smait Noney.

Bo iemembei that chait ieauing is a skill that uevelops ovei time, much like leaining to
play golf oi a musical instiument. What I founu helpful was taking scieenshots of an
inuiviuual stock oi commouity. When I saw news about that paiticulai instiument, I woulu
look foi unusual volume. I woulu wait six months anu ievisit that chait anu news stoiy,
only to be amazeu. Nost of the time, the instiument uiu the veiy opposite of what technical
analysis was pieuicting anu what the funuamental analysis was suggesting. The actions of
the instiument inueeu confiimeu my gut instincts anu what I hau seen as a iesult of
caiefully stuuying the piice (P), the spieau (S), anu the volume (v) pictuie.

Aftei consistent finuings with this 'expeiiment', I knew I hau to wiite this book anu follow
in the footsteps of my gieat mentois, Richaiu Bemille Wyckoff anu Tom Williams. I hau to
attempt to even the ouus foi the eveiyuay tiauei anu investoi that wanteu to succeeu anu
make it in the maikets.

You can make it in the maikets anu be successful, but you will neeu to embiace the
paiauigm shift of volume Spieau Analysis (*+,) in youi thinking anu tiauing toolset. We
can pioviue plenty of tools that can help you make those necessaiy shifts in youi belief
system, but as I stateu befoie, that is only if you aie open minueu anu look at the eviuence.
It's all iight in fiont of youi eyes; all you neeu to uo is ieau the chait!
S6
4N,A":? e

@:8,?: 7> "N: 6:8+



In Chaptei Thiee we uiscusseu 'Smait Noney' anu how they take full auvantage of
unueistanuing ciowu behavioi. Now, let's look at two case stuuies. Both case stuuies will
be explaineu in moie uetails latei in the book, but foi now, we will focus on some veiy
simple piinciples that eveiyone can unueistanu.

"If you uon't ieau the newspapei, you aie uninfoimeu, if you uo ieau the newspapei, you aie
misinfoimeu."
-Hork Twoin

When I fiist met Tom, he uesciibeu an inciuent in which the tiauing synuicate he woikeu
foi wanteu to occumulote, oi buy moie shaies in a paiticulai stock they hau been following.
In oiuei to uo so, the synuicate neeueu to cieate a level of activity befoiehanu to convey the
impiession the stock hau pioblems. (Now wheie have we heaiu that befoie. See Chaptei
1.)

Tom anu some membeis of the synuicate hau been planteu in the Annual ueneial Neeting
of Teleuyne, the company in question. Theie weie inquiiies that gave a false impiession
that the stock might be in tiouble. The iumois conceineu a lost contiact that nevei actually
existeu, but it was enough to stait the snowball iolling. The uay aftei the AuN the
ciiculating news was negative anu the synuicate solu just enough stock to cause a selling
panic. As the stock began to fall they knew they woulu be getting a baigain. The stock was
now at a veiy attiactive piice, so they began to buy at lowei piices, anu this is why the
following two iules aie vERY impoitant in youi leaining.


?(F& 6(GX&# OU 8&$T1&33 $//&$#3 E1 $1 ./ @$#

In a iising maiket, oi a maiket which has bioken out of a siueways iange, when _&$T1&33
(selling sbort oppoitunity) appeais on the chait, it will appeai on an 0p Bor, i.e. a piice bai
that has closeu highei than the pievious bai, anu will be on unusually high volume by such
compaiison. Tiaueuuiuei will inuicate this as 0ltro Eiqb volume. If the opposite occuis,
namely unusually low volume, Tiaueuuiuei will show it as 0ltro low volume. {Tbe spreoJ
coulJ be telltole norrower tbon previous bors)

At fiist glance that may appeai as though I am contiauicting myself by stating that
weakness will appeai on high (oi piefeiably, 0ltro Eiqb) volume, anu then also on low (oi
0ltro low) volume on up bais. The statement is factually coiiect! So, why is this.

The answei is simple: When the 'Smait Noney' playeis begin to uump theii holuings of
whatevei instiument is being tiaueu (stocks, futuies, F0REX, commouities etc.), theii SELL
oiueis aie all coming in one aftei anothei, anu that cieates the 0ltro Eiqb volume. This is
what is calleu the Bistribution phase, inuicateu by the mnemonic, Supply-0vercominq-
S7
BemonJ. An analogy of this is in the ietail enviionment wheie manufactuieis who have
goous to sell, supply them to ietail 'uistiibutoi'.

What's happening is that Selleis aie oveicoming buyeis at a ceitain piice level or ronqe
(this is often seen at pievious iesistance levels). Now aftei this activity has taken place, the
maiket will often move siueways anu not suuuenly collapse because the 'Smait Noney'
neeu to ensuie all theii sell oiueis aie being satisfieu. This explains why the uistiibution
phase can take time. Anothei inuication of this lack of inteiest on the pait of the 'Smait
Noney' is that it causes the piice to peak anu ioll ovei in a chaiacteiistic 'mushioom' shape,
which is easy to spot.

'Smait Noney' ensuies that the piice is helu at a ceitain level by buying some of it back to
tiap anu encouiage the uninfoimeu tiaueisinvestois, oi the 'Beiu' to entei into oi iemain
in long tiaues. They will often be luieu into this, aftei seeing the fienzy of what they tbink
is buying. They assume this is the case uue to the high volume anu iising piices, but it's the
exoct opposite of what is actually happening! I will piove this to you in 4H$#- *+, O. The
time to shoit the maiket is when piice staits confiiming the lack of buying inteiest anu
begins to "iollovei" anu tienu uown. (I will show specific setups latei that will amplify this
piinciple in gieatei uetail.)


4N,?" *+, a



Looking at 4H$#- *+, a, notice that in the tienu we see an unfoluing pattein with up bai(s)
(piice bai(s) that close highei than the pievious bai(s), with the volume on the up bai(s)
extiemely low, oi at least, lowei than the pievious two bai(s).

S8
As mentioneu, notice by looking at the chait that as the tienu pattein shows piice
piogiessing upwaius, 'Smait Noney' have withuiawn theii inteiest because they have
alieauy solu anu maue a nice piofit. This confiims that they have no intention of buying
since piioi bais confiim maiket weakness. This contiauicts the stiength, which the news
meuia will be iepoiting.

By kinu couitesy of Tiaueuuiuei Systems Inteinational, lets look closei at 4H$#- *+, a,
which shows a stiong volume Spieau Analysis piinciple that I will explain in uetail a bit
latei. I will also show how the news will be influencing the 'Beiu' that we uiscusseu in
chaptei S to go long, when in fact they shoulu be piepaiing to go shoit (sell) when the set
up appeais. As suie as uay follows night the tiauing 'signs in the sky' aie theie, if you know
what to look foi!

4H$#- *+, a is a uaily chait of 0.S. stock, }P Noigan Chase, with an inuicatoi signal that
appeais in the Tiaueuuiuei softwaie piogiam calleu 'FnJ of o Risinq Horket. Note that the
uate of the signal is 14
th
of 0ctobei 2uu9, which is veiy significant, as we shall see. This
stock hau been in a stiong bull iun since eaily Naich 2uu9. In fact on Naich 6
th
2uu9, the
stock was heavily occumuloteJ, (bought) at the low of $1S.S2, which was the stait of the
uptienu.

0n the 14
th
of 0ctobei, the stock gaps up on 0ltro Eiqb volume, veiy naiiow spieau bai.
{Tbe ronqe in tbis cose is tbe price Jifferentiol between tbe top onJ bottom of tbe bor, wbicb
we soiJ in <:*21 469 I, is tbe Joily bor. Price con olso ronqe or cbonnel over o number of
bors os we will see loter) Now, note that what I am going to show you woiks just as
effectively on a one minute timefiame as it uoes on uaily, weekly oi monthly timefiames.
0n 4H$#- *+, a, viz. 0ctobei 14
th
, 2uu9, this stock is getting heavily JistributeJ (solu) by
the Smait Noney, who will have bought this stock at much lowei piices. Remembei, the
'enu game' is PR0FIT!

Looking at the 0ctobei 14
th
bai, we make the following obseivations: The stock has
gappeu up, which is unusual activity in its own iight, anu closes at a new high of $46.9u. We
have now maue new highs with no piice action in the past at this level foi at least Suu bais.
We call this 'Iresb New 6rounJ.

Take note of the following:

Incieaseu massive volume ovei pievious bais
The iange of the bai is naiiow, not wiue (in fact the high of the uaily bai on 14
th
0ctobei
2uu9 is at $47.2u, the low is $46.S7),
The closing piice - its close to the miuule at $46.9u.


If all that volume was 'Smait Noney' buying at this level, you woulu expect a wiuei spieau
(iange) on the bai anu a close up oi neai the high of the bai(s), but this is not what we aie
seeing.

What we aie actually seeing is Tbe FnJ of o Risinq Horket anu theie is a specific way to
tiaue this. If we look closely at the simple logic of what is happening on this bai, then we
must suiely concluue:
S9

- (v) Smait Noney playeis cleaily appeai active as seen in the massive volume shown at the
bottom of the chait, iepiesenteu by the gieen bai. (Theie is no significance to the coloi of the bai
foi the puiposes of this explanation so you can ignoie the fact its gieen, in spite of the coloiing
being a piopiietaiy element of the Tiaueuuiuei softwaie piogiam).
- (S) The spieau of the bai is extiemely naiiow anu the volume is high. Nost likely, anu moie
often than not, the 'Beiu' will be iushing in anu buying. The Smait Noney will satisfy eveiy buy
oiuei with a sell oiuei anu say "thanks veiy much you mugs" as they take in moie piofit having
bought much lowei!
- (P) The closing piice is veiy impoitant heie, too. It closes neai the miuule of the bai on that
naiiow iange.

So, we have an 0ltro Eiqb volume, norrow spreoJ bai closing in the miuule, anu we aie into
"fresb biqb qrounJ". What coulu be causing this 0ltia Bigh volume. Well, both buyeis anu
selleis aie inteiacting at this level, anu the buyeis aie 'The Beiu', oi the 'Not-So-Smait
Noney' anu the selleis aie the 'Smait Noney'. The 'Smait Noney' people have now maue a
tiuy piofit anu unloaueu theii positions. They maue this stock a weak stock with this tactic
anu they know it.

Why 0ctobei 14
th
. Why not uo the selling a week befoie oi even two weeks befoie. Suiely
they woulu still have maue a nice piofit. Timing is eveiything anu the Smait Noney playeis
know this. Plus, they have infoimation that the ietail tiaueis anu investois uo not have.
Look at the news about this stock on 0ctobei 14
th
foi a clue. We see in the news aiticle 2
below that theie is a veiy B0LLISB eainings iepoit.

6&_3 ,#-)2F& PQ Ellis, B. (2uu9, 0ctobei 14). }PNoigan Scoies Big in Latest Quaitei. CNNHoney.com.
Retiieveu Nay 1
st
, 2u11. Fiom
http:money.cnn.com2uu91u14newscompaniesjpmoigan_chaseinuex.htm



"}P Noigan scoies big in latest quaitei" is the heauline. The woius "stronqest performonce"
anu "towereJ obove Woll Streets expectotions" aie useu uiiectly below the heauline. All the
news is now bullish. The stock has been going up anu up because its in an uptienu. All
technical lagging inuicatoi analysis tools will be fiiing off buy signals because they tiack
past piice to pieuict futuie piice (anu this example shows why that simply uoesn't woik,
because the past piice uoesn't pieuict a move of the piice in futuie, anu it nevei will!)

It woulu appeai to the 'Not-So-Smait' money that this is a gieat oppoitunity to buy this
stock because eveiything they have leaineu appeais to line up:

4u
- The funuamentals look gieat! - Tick tbe box
- The stock is an uptienu, so if I go long anu B0Y, I am tiauing with the tienu! - Tick tbe box
- The moving aveiage, stochastic, NACB & RSI all give B0Y signals. - Tick tbe box
- If I uon't go into the maiket anu B0Y now I will miss the move! - Tick tbe box

0K, fine. B0Y, B0Y, B0Y, but as you uo that, the Smait Noney will SELL, SELL, SELL.

Now the stock will plummet, as we can see in 4H$#- *+, a. The 'Not-So-Smait Noney', who
have now lost theii money, iue the uay, sciatch theii heaus, thiow theii computei at the
wall, anu tiy to figuie out what the hell just happeneu.

Bowevei, when you can ieau volume, Supply anu Bemanu, anu the imbalances causeu by
0ltro Eiqb onJ 0ltro low volume, you will become a 'Smait Noney' tiauei foi youiself anu
will be able to stuuy the chaits like a piofessional. You will tiaue anu invest with newly
founu confiuence anu vigoi because you can cleaily see what the tiue intentions of the
Smait Noney aie anu be able will to tiaue in haimony with them, not against them.

Now, coulu histoiy iepeat itself anu woulu the 'Smait Noney' know that the 'Not-So Smait
Noney' woulu fall foi exactly the same set up exactly six months latei.

Similai news iepoit, almost iuentical piice level (which was acting as iesistance) anu the
same iesult, the stock plummets, as you can see in 4H$#- *+, e.













41






4N,?" *+, e



The high on Apiil 14
th
, 2u1u was $47.9S anu the high on 0ctobei 14
th
, 2uu9 was $47.2u.
The low on Apiil 14
th
, 2u1u was $46.78, anu the low on 0cotbei14
th
, 2uu9 was $46.S7. The
close on Apiil 14
th
, 2u1u was $47.7S anu the close on 0ctobei 14
th
2uu9 was $46.9u. Is this
is a coinciuence that this stock uiu this exactly six months aftei the pievious sell off. Well,
you make up youi minu, but you cannot fail to see that excessive volume on up bais,
especially at pievious iesistance. Plus, when the news is goou anu encouiaging you to go
long, it's a suie sign foi you to stait looking foi a shoit. Now you have knowleuge that
hunuieus of thousanus of tiaueis anu investois aiounu the woilu uo not know anu may
nevei know, unless of couise they finu this book oi it finus them!! {Pleose visit
www.troJinqintbesboJow.com to see o viJeo sbowinq tbe some set up boppeninq oqoin in April 2011.)


?(F& 6(GX&# PU +-#&1J-H ,//&$#3 71 , ;E_1 @$#

When 3-#&1J-H (oppoitunity to buy) appeais on a chait, it will appeai on a Jown bai,
which is a piice bai that has closeu lowei than the bai(s) behinu it, anu will be on
unusually high volume {0ltro Eiqb) oi unusually low volume {0ltro low).

42
As we saw in Rule numbei 1, at fiist glance that may appeai as though I am contiauicting
myself by stating that stiength will appeai on uown (oi piefeiably, 0ltro Eiqb) volume, anu
then also on low (oi 0ltro low) volume (uown) bais.

This statement is also factually coiiect! So, once again, why is this.

When the 'Smait Noney' piofessionals begin buying whatevei instiument is being tiaueu
(stocks, futuies, F0REX, commouities etc.) theii buy oiueis aie all coming in one aftei
anothei anu that cieates the 0ltia Bigh volume. This is what we call the Accumulotion
phase, oi BemonJ 0vercominq Supply.

Put simply, buyeis aie oveicoming selleis at a ceitain piice level (this is often seen at
pievious suppoit levels). Aftei this has taken place, the maiket will often move siueways
anu not suuuenly ially immeuiately. This is because the 'Smait Noney' neeu to ensuie all
theii buy oiueis aie being satisfieu anu they have exhausteu all the selleis (Supply). This is
the ieason why the occumulotion phase can take time. They ensuie that the piice is helu at
a ceitain level by selling back oiueis to encouiage the uninfoimeu tiaueisinvestois to get
shoit which they often will when they have seen the fienzy of what they think is selling.
This happens because the piice falls, anu the volume is veiy high anu they incoiiectly
assume that the high volume N0ST be selling.


")G& "E @(] "H& <$#T&-

The time to buy the maiket is when we begin to tienu up. {l will be sbowinq specific set ups
loter tbot exploins tbis principle in more Jetoil) As the tienu begins, we see a uown bai {o
price bor tbot bos closeJ lower tbon tbe previous bor) anu this time the volume on the uown
bai is extiemely low, oi at least lowei than the pievious two bais. This tells us that theie is
no selling piessuie oi no Supply, (i.e. no moie selleis) an obvious conclusion that the
maiket is going to ially.

A woiu of auvice heie, even though it's possible to iuentify maiket tops anu bottoms, uon't
tiy anu tiaue them, because theie aie much lowei iisk entiies that take a little moie time to
uevelop, so you have to be patient!

A goou example is the 0.S. stock, Biitish Petioleum (BP). I pickeu this example foi a numbei
ieasons. Tom Williams' signal calleu "Potentiol Climoctic Action" (Sign of Stiength SS) is
one of the stiongest inuications that 'Smait Noney' aie buying. This signal came up in
Tiaueuuiuei on }une 9
th
, 2u1u. Tom calleu me anu saiu, "uav, I am watching the news anu
this is hoiiific. Aie we suie that the volume is coiiect. It looks veiy much to me like the
big playeis aie piling in anu buying BP stock, they must know something we uon't - uo you
think they have alieauy cappeu the well anu aie not telling us!!"

I hau no iuea what was going on, but I coulu ieau the chait. I was uue to speak at the
Nassachusetts Institute of Technology (NIT) in Boston a few weeks aftei this signal hau
appeaieu, anu I was able to use this as a live example. I hau something to show them in
foiesight anu not in hinusight.

4S
When I commenceu wiiting this book in }anuaiy 2u11, the cuiient news then on BP was
that theii shaie piice hau incieaseu, anu at the time of wiiting, BP's stock piice in the 0S is
up fiom the }une 2S
th
2u1u low of $26.8S to a high as of }anuaiy 6
th
2u11 of $46.6u.
BP's stock piice has neaily uoubleu in value in 6 months! Buiing that inteiim peiiou, the
news was so bau that when I spoke at NIT to The Boston Tiaueis uioup, (gieat people anu
gieat seafoou!) they askeu me which stock was a goou buy at the time. When I saiu BP they
all laugheu, piobably thinking it was my Biitish sense of humoi, but no one's laughing now!
That was a big oppoitunity to make money alongsiue the 'Smait Noney'.

You may be saying to youiself, "Well yes uavin, it all looks goou in hinusight, but what
about in foiesight. That's the wonueiful thing about www.youtube.com, because I am able
to post my analysis as it happens anu it's also uate stampeu. When you get a minute, take a
look at Tiaueuuiuei's channel on www.youtube.com anu just type in Tiaueuuiuei.
See what I saiu when the oil maiket was supposeu to hit $2uu a baiiel in 2uu8, only to get
to $147.27 anu then plummet to $SS.2u in just 6 months.

Bewaie of the news, because all the analysts, incluuing well iespecteu oil analyst, Aijun
Nuiti of uoluman Sachs, hau baiely two months piioi to the uecline, waineu of an
impenuing oil spike to $2uu a baiiel!

I wonuei who piofiteu as the oil maiket plummeteu, not the aiilines, that's foi suie,
because they weie expecting highei piices anu theiefoie heuging accoiuingly!
The Chait NEvER LIES, as we shall now see on the BP chaits.


4N,?" *+, f



44
4N,?" *+, [



If we look closely at 4H$#- *+, f anu 4H$#- *+, [ (BP Baily chait), the Tiaueuuiuei
piopiietaiy signal 'Sign of Stiength SS' is a poweiful inuicatoi because when it appeais, it's
a cleai message fiom the 'Smait Noney' announcing that they aie buying eveiything fiom
the panicking 'Beiu' oi 'Not-So-Smait Noney'.

We will uiscuss the actual place of when to take a long tiaue latei, but even when I see this
signal, I wait. I uo not want to be too hasty since theie is still Supply (selling) containeu in
that bai on }une 9
th
, 2u1u anu that can uiive the piice lowei.

Tbe bor tbot formeJ on }une 2S
tb
, 2010 is extremely siqnificont onJ forms port 2 of o tbree-
port troJe set up.

4S
4N,?" *+, S



Now let's examine 4H$#- *+, S that bai which hau foimeu on }une 2S
th
, 2u1u.

Fiistly, we notice that the volume is much less than we saw on the 9
tb
onJ 10
tb
of }une 2010.
That is significant because it is showing the selling piessuie is getting less anu less. This is
why the Supply (selling) is oveicome by the Bemanu (buying) fiom the 'Smait Noney'.
What's moie impoitant, howevei, aie the extiemely naiiow inuiviuual bai piice spieaus on
the 2S
tb
onJ 26
tb
of }une 2010.

If we weie to tuin the }P Noigan chait in 4H$#- *+, a upsiue uown, it woulu look similai
to what you seeing heie. 0n the }P Noigan chait we obseiveu Supply oveicoming Bemanu
(selling swamping the buying) anu on the BP chait we see the opposite, Bemanu
oveicoming Supply (buying swamping the selling). This can only mean one outcome - the
highei piices as we see in 4H$#- *+, [, because all chaits anu all maikets woik the same
way, incluuing stocks, commouities, futuies, cuiiencies anu yes, even spot F0REX (but
that's anothei subject foi anothei book!).


46
4N,?" *+, R



We then see, in 4H$#- *+, R, the iesult of the Accumulotion, namely that Bemanu has
oveicome Supply, anu highei piices become inevitable. All the way thioughout the up
move, Smait Noney sell some back to biing the piice uown again to test foi Supply {i.e.
tbey wont to flusb out ony remoininq Supply in orJer to move tbe price up witbout bovinq to
obsorb Supply tbot remoins).

If the test is successful, we can expect highei piices, especially if the test is on low volume
anu naiiow spieau uown bai into the same aiea wheie you fiist saw the veiy high volume.
This is a stiong @.B signal.

Bowevei, the news that you heai will almost always be extiemely beaiish, negative, anu
feai mongeiing, which has the effect of blocking youi entiy into the maiket at the coiiect
time.
Tom Williams taught me to tiust in the chait anu nothing else. Be also tolu me that if he
hau his way, he woulu lock eveiy ietail investoi anu tiauei in a uaik ioom - no Tv, no
newspapei, no outsiue infoimation, oi influences anu just get them to tiaue the *+,
piinciples as they appeai.

As Tom says, "If you can ieau the chait anu ignoie youi natuial human instinct to follow
the 'Beiu', you can make a lot of money in the maikets".


47
4N,?" *+, g



Always look back on pievious piice action as fai as you can, in oiuei to see if theie aie any
unusual volume aieas aiounu Suppoit anu Resistance levels in the backgiounu. In 4H$#-
*+, g, I lookeu back 1u yeais on the monthly BP chait. Stocks move in cycles -1u yeais is a
cycle, anu, as if by magic theie it was: cleai suppoit aiounu the $27.uu to $Su.uu aiea,
exactly wheie suppoit was founu uuiing the uulf 0f Nexico oil well uisastei.

Bon't foiget: Bewore of tbe news! It is not necessaiily that the meuia aie lying; they aie
simply iepoiting what they heai anu see. Although, I have yet to heai an explanation as to
how BP's shaies neaily uoubleu uuiing the woist oil spill ciisis Ameiica has evei seen,
notably when iumois weie abounu that BP woulu go out of business anu that Libya woulu
take them ovei!

Remembei, it's vital to have a contiaiian minuset if you want to make money in the
financial maikets, even though it goes against youi natuial instincts! In fact, if youi uecision
is against youi natuial instincts you will piobably make a veiy goou tiauing oi investment
uecision!

Finally, just to hammei home the point:

Remembei the financial ciisis of 2uu8 when Lehman Biotheis went out of business in late
Septembei. Also, uuiing Becembei 2uu8 anu }anuaiy 2uu9, the banking sectoi (we weie
tolu) was in shambles anu the uoveinment (as it was iepoiteu) was going to have to take
ovei uoluman Sachs (although now I think its piobably the othei way iounu!)
48
4N,?" *+, OZ



Well, let's look at the Weekly chait, 4H$#- *+, OZ, anu examine the volume anu what
actually happeneu to the uoluman Sachs shaie piice. Let's see if the 'Smait Noney' sent us
a telegiam then as they uiu with Biitish Petioleum (BP).

We can see that just like BP, the Accumulotion took place on bau news. Aftei testing foi
Supply in Becembei 2uu8 anu }anuaiy 2uu9, the stock took off because Bemanu hau
oveicome Supply.

If you hau switcheu on youi Tv oi ieau the newspapeis uuiing Becembei 2uu8 anu
}anuaiy 2uu9, you woulu have been foigiven foi thinking that the banks weie finisheu anu
the TARP money meant the goveinment woulu be in contiol making the banks shaies
woithless.

0f couise that nevei happeneu, anu some of the biggest bonuses evei paiu weie given out
to the bankeis in 2u1u, only two yeais aftei the ciisis began. In the 196u's, Richaiu Ney's
numbei plate of his Rolls Royce ieau "Wake 0p", anu if you take on boaiu his subliminal
message, you will not fail to make money in the financial maikets.





Now let's look biiefly at the inspiiation foi this book anu the teacheis that hau an impact in
theii time in helping otheis to unueistanu 'the game':

49
Richaiu Bemille Wyckoff (Novembei 2, 187S - Naich 19, 19S4) was a stock maiket authoiity,
founuei anu onetime euitoi of the Hoqozine of Woll Street (founueu in 19u7), anu euitoi of Stock
Horket Tecbnique. www.iichaiuwyckoff.oig



"...TbousonJs of tbose wbo operote in tbe morkets now recoqnize tbe foct tbot tbe morket
momentorily inJicotes its own immeJiote future, onJ tbot tbese inJicotions ore occurotely recorJeJ in
tbe morket tronsoctions seconJ by seconJ, onJ tberefore tbose wbo con interpret wbot tronsoctions
toke ploce seconJ by seconJ or moment by moment bove o Jistinct oJvontoqe over tbe qenerol troJinq
public...."

JK(E:*28 L '"E?%33M INIO


"Tope reoJinq seems to us: Tbe SClFNCF of BFTFRHlNlN6 from tbe TAPF tbe immeJiote trenJ of
prices. "

"lt is o HFTE0B of I0RFCASTlN6, from wbot oppeors on tbe tope N0W', wbot is likely to oppeor in
tbe future."

U?)2H$#% ;L 8]2TEII
6158(0+ -. $*70 K0*8(.A
K%))% $*70




















Su

Richaiu Ney's Rolls Royce - Examine the numbei plate closely, it says it all!







?)2H$#% 6&]
Actoi, Authoi, Investoi, anu Euucatoi
(Novembei 12, 191S - }uly 18, 2uu4)






S1
Tom Williams is a foimei piofessional synuicate tiauei anu inventoi of the methouology
calleu volume Spieau Analysis that tiacks maiket manipulation as it happens on a chait.
Now 82, Tom has wiitten 2 books anu still tiaues touay when this book was wiitten in
eaily 2u11.





"EG 8)FF)$G3Y 72-EX&# PZOZ d +-$-&G&1-3Q

"Tbe morket is Jevious onJ mony times you will buy on qooJ news only to lose money onJ sell on boJ
news only to see tbe price rise soon ofterworJs, onJ tbot is becouse "Smort Honey" unJerstonJ crowJ
bebovior onJ toke full oJvontoqe of Tbe EerJ!!

"Tbe morket works becouse bumon beinqs bove two powerful emotions tbot tbey bove Jifficulty
controllinq, nomely IFAR ANB 6RFFB"

"Tbe morket bos to be feJ losers. lt is Jevious onJ wbot you beor will often not be tbe trutb. l bove
never beorJ tbe trutb obout tbe stock morket or ony morket on television. }ust look ot tbe news obout
tbe 0il morket in Hoy 2008. 6reeJ ot tbe top os mony troJers pileJ in becouse tbey were tolJ oil boJ to
qo to $200 o borrel!! Tbe cbort never lies, onJ 6ovin went on YouTube to sbow tbe TroJe6uiJer
proprietory siqnol, nomely Tbe FnJ of o Risinq Horket. Tben look ot tbe bonkinq sector in 2008
Jurinq September. Ieor set in onJ professionol money beqon to B0Y not SFll onJ tbot couseJ stocks
like 6olJmon Socbs to Rolly 400%. lt wos oll in tbe cbort if you know bow to onolyze S0PPlY ANB
BFHANB".



PQL RS PT<PKU$ RS
V$K9L-QB -Q $WP 6W9LR' RS $WP 6>9K$ >RQP=X

S2
"N: *79.<: +A?:,; ,6,9B+C+
K*+,M +:h.:6"C,9 "?,;: +:"U.A

volume Spieau Analysis, oi *+, as I shall now iefei to it, was uevelopeu to analyze
imbalances of supply anu uemanu in any maiket anu in any timefiame, howevei, what
many tiaueis anu investois seem to miss is that the *+, methouology uoes not just analyze
one piice bai at the iight euge of the chait but actually analyzes piice bais in piioi
sequences.

Since Tom Williams uevelopeu the system ovei twenty yeais ago, many veiy clevei
inuiviuuals have attempteu to piogiam in theii own veision of *+,. I have uownloaueu
seveial so-calleu *+, piogiams that have maue claims to being the same as Toms oiiginal
woik, anu you can bet that they aie so inaccuiate anu incoiiectly piogiammeu that they
show the tiue *+, methou in a pooi light.

The genius of Tom Williams appioach to piogiamming *+, coiiectly was that he knew
when to put in iestiictions so that you uo not get signals appeaiing on eveiy bai. It is a bit
like ueveloping a computei piogiam to plan the peifect gaiuen paity. The piogiam woulu
neeu to ask questions of the peison inputting the infoimation to give the coiiect output,
such as:

1. Bow many people attenuing the paity.
2. Is the weathei foiecast goou oi bau.
S. Aie theie vegetaiians that iequiie a special menu.

The wonueiful thing about the Tiaueuuiuei system is that Tom Williams, thiough his
extensive expeiience as a foimei synuicate tiauei using the Wyckoff methou, has answeieu
all the questions foi us. Bence we get signals in the Tiaueuuiuei softwaie anu the auu-in
stuuies foi TiaueStation, eSignal, Netatiauei4 anu othei packages that aie cuiiently in the
uevelopment stage with oui company. Although *+, piouuces a signal on an inuiviuual
bai, theie aie sequences of signals that give a much highei piobability of a maiket tuin oi a
tienu change.

If applicable iules aie followeu, as explaineu in my book "TroJinq in tbe SboJow of tbe
Smort Honey", what follows is that you will tiaue in haimony with the big playeis who aie
moving the maiket, anu not against them.

Let me give you an example of a sequence that iecently appeaieu in the Silvei maiket that
was pickeu up by the scannei in the enu of uay veision of Tiaueuuiuei on the 2S
th
of Apiil,
a week BEF0RE the 27% collapse in the silvei (commouity) maiket.

Note that the scannei picks up a clustei of ieu inuicatois, which is extiemely significant.
When accumulation oi uistiibution occuis, it takes some time foi Smait Noney to complete
the piocess, which is why the sequences I am going to shaie with you appeai _)-H)1 PZUPf
X$#3 of the maiket tuin. It's the uieam of eveiy tiauei anu investoi, to know in auvance
when a maiket top oi bottom is being foimeu. This summaiy book will piesent you with
the signal sequences that maik the top anu bottom of a maiket.


SS


This is the Tiaueuuiuei chait of silvei showing the scannei that pickeu up seveial Siqns of
Weokness {S0W) uuiing late Apiil 2u11. This was showing "Smait Noney" uistiibution at
the enu of Apiil - The iesult was a 27% fall in silvei piices in eaily Nay 2u11.


So what was the sequential *+, set up. Let's have a look.



Tbis cbort is courtesy of TroJe6uiJer Systems - TroJe6uiJer F0B cbort of Joily silver controct.
The sequence at A, B, anu C maiks a maiket top. The *+, inuicatoi numbeis aie as follows
(in this summaiy book you will finu an explanation foi each inuicatoi that can be founu in
the Tiaueuuiuei softwaie anu *+, auu-in stuuies):
S4

U%(.1 9 - S0W 1 - The Buying Climax (Stait of uistiibution)
U%(.1 ! - S0W 1u4 - Supply Coming In (also has the appeaiance of an 0pthiust)
U%(.1 < - S0W 199 - No Bemanu (No Bemanu at maiket top)


*+, sequence is S0W 1 followeu by S0W 1u4 anu S0W 199. It is confiimeu at point B,
which closes lowei than point C.

6E-& - when you see a No Bemanu bai B0 N0T shoit at maiket, place a sell oiuei a few
ticks below the No Bemanu bai.

Q% L0&*.8 neeJs confirmotion from tbe next bor, wbicb sboulJ close or move lower tbon
tbe previous bor.




Cbort courtesy of lnfinity AT cborts - silver Sl N1 introJoy cbort sbowinq siqns of weokness sequence 2.


You may ask, why I woulu be ievealing this poweiful infoimation to the geneial tiauing
public. Why shoulu I not just keep it to myself anu tiaue the sequences.

The shoit answei is that, as a company, we aie going to uo piecisely that, namely to
establish an equity funu anu auto tiaue the system.

I have a team in place to uo that, but as I explaineu in my book, I maue a piomise to Tom
Williams in 2uu2 that I woulu not be self seeking with the infoimation that he impaiteu to
me anu woulu theiefoie always iemain committeu to shaie willingly the knowleuge I have
gaineu on this impoitant subject.

SS
By uoing so, I have hau the goou foitune to make new fiienus, meet some of the most
inteiesting people in the woilu, anu have founu myself blesseu with the ability to help
otheis, which is the most iewaiuing thing any human being can uo.









AF&$3& 2E1-$2- ;$##&1 IE# GE#& %&-$)F&% )1IE#G$-)E1 $XE(- -H&
"#$%&'()%&# *+, 3]3-&G $1% -E $##$1J& $ efUG)1(-&Y 1E
EXF)J$-)E1 2E13(F-$-)E1L BE( 2$1 &G$)F ;$##&1 NEFG&3 $-
%$##&1Hi-#$%&J()%&#L2EGY
E# ]E( 2$1 2$FF H)G %)#&2-F] $- aOPUeaaUgaaeL

8& FEET IE#_$#% -E -&$2H)1J ]E( HE_ -E -#$%& )1
H$#GE1] _)-H -H& j+G$#- <E1&]W



S6
6WRK$ $K9LP 6P$ @U6Y 6R' J 6-BQ6 RS 'P9ZQP66

+&0(&12& O d K&k$G/F& 3HE_1 )1 3)FD&#M
S0W 1 The Buying Climax (Stait of uistiibution). pg. 8S
S0W 1u4 Supply Coming In (also has the appeaiance of an 0pthiust). pg.
S8
S0W 199 No Bemanu (No Bemanu at maiket top). pg. 66

+&0(&12& P d K&k$G/F& 3)FD&# )1-#$%$] C1I)1)-] ," 2H$#-M
S0W 26 Supply Coming In. pg. 27
S0W 7 Supply Coming In. pg. 6u
S0W 146 No Bemanu. pg. 6S

+&0(&12& a
S0W 9u Possible Biuuen Selling. pg. 88
S0W 26 Supply Coming In. pg. S7
S0W 198 No Bemanu. pg. 66

+&0(&12& e
S0W 1S4 No Bemanu. pg. 6S
S0W 1u 0pthiust. pg. 7u
S0W 1S4 No Bemanu. pg. 6S

+&0(&12& f
S0W S Enu of a Rising Naiket. pg. 7S
S0W 2 0pthiust. pg. 74
S0W 6 No Bemanu. pg. 6S

+&0(&12& [
S0W 89 Potential Climactic Action. pg. 89
S0W 86 Faileu Test. pg. 79
S0W 96 0pthiust Aftei Weakness. pg. 86

+&0(&12& S
S0W 97 Reveisal Aftei Effoit To Rise. pg. 8u
S0W 1u 0pthiust. pg. 7u
S0W 1u6 No Bemanu. pg. 6S

+&0(&12& R
S0W 1u8 Top Reveisal. pg. 81
S0W 1u 0pthiust. pg. 7u
S0W 19S No Bemanu. pg. 6S

+&0(&12& g
S0W 1S9 Supply 0veicoming Bemanu. pg. 84
S0W 1u1 0pthiust. pg. 74
S0W 127 No uemanu. pg. 6S


S7

+&0(&12& OZ
S0W 21 Enu of a Rising Naiket. pg. 7S
S0W 28 No Bemanu. pg. 6S
S0W S4 No Bemanu. pg. 6S




[RQB $K9LP 6P$ @U6Y 6R6 J 6-BQ6 RS 6$KPQB$W

+&0(&12& O
S0S 147 Bemanu 0veicoming Supply. pg. 124
S0S 1S4 No Supply Test. pg. 1uu
S0S 198 No Supply. pg. 1u2

+&0(&12& P
S0S 1S7 Potential Climactic Action. pg. 1u6
S0S 1SS Stopping volume. pg. 1u4
S0S 96 Test. pg. 114

+&0(&12& a
S0S 78 Bottom Reveisal. pg. 99
S0S 116 Test. pg. 112
S0S 86 No Supply Test. pg. 1uu

+&0(&12& e
S0S 74 Potential Climactic Action Shakeout. pg. 98
S0S 146 Test. pg. 112
S0S 199 No Supply. pg. 1u2

+&0(&12& f
S0S S7 Two Bai Reveisal. pg. 9S
S0S 1S4 Test No Supply. pg. 1uu
S0S 198 No Supply. pg. 1u2

+&0(&12& [
S0S 4S Shakeout. pg. 1u9
S0S 49 Test of Supply Aftei Shakeout. pg. 121
S0S 199 No Supply. pg. 66


+&0(&12& S
S0S S6 Bag Boluing. pg. 12u
S0S 29 Test of a Bieakout. pg. 126
S0S Su Test in a Rising Naiket. pg. 128



S8

+&0(&12& R
S0S 122 Potential Piofessional Buying. pg. 12S
S0S 11 Basic Test. pg. 97
S0S 81 No Supply Test. pg. 1u1

+&0(&12& g
S0S 8S Potential Selling Climax. pg. 12S
S0S 1S4 No Supply Test. pg. 1uu
S0S 147 Bemanu 0veicoming Supply. pg. 124

+&0(&12& OZ
S0S 99 Reveisal 0vei Two Bais. pg. 116
S0S 198 No Supply. pg. 1u2
S0S 199 No Supply. pg. 66


S9
+C'6+ 7> 8:,56:++

6u
+.AA9B 47<C6' C6Q +78 P[Y +78 PSY +78 aa
N7":Q None.

@$# ;&32#)/-)E1Q
This is an up bai showing an inciease in volume suggesting supply has enteieu the maiket.
If volume is ultia high this coulu be climactic action. Sometimes this can be a bieakout
thiough an olu top, which is a sign of stiength. Bowevei, make suie that it is not a false
bieakout, which is a S0W.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices, this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left. This coulu be absoiption volume.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness. With weakness in the backgiounu this inuicatoi caiiies
moie weight. No uemanu up bais anu upthiusts will auu to the negative pictuie. If theie is
stiength in the neai backgiounu oi a bieakout this supply may be testeu so look foi low
volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is still
stiong it shoulu follow the path of least iesistance, which is up.

Also watch foi uown bais closing off the lows with high volume, which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.


61
+.AA9B 47<C6' C6Q +78 [aY +78 gPY +78 OZeY +78 OPRY +78 OaZ

N7":Q This inuicatoi is baseu upon the action of two bais.

@$# ;&32#)/-)E1Q
A high volume up bai usually closing off the highs with the next bai uown inuicates supply
is oveicoming uemanu. This can appeai similai to a top ieveisal. Auu moie stiength if the
volume is highei on the up bai anu it is into fiesh new high giounu. If the high of the uown
bai is highei than the pievious high this auus to the weakness.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
This set up shows weakness. Bowevei be cautious if volume on the uown bai was veiy high
to ultia high with the next bai up. This woulu confiim theie was buying in the uown bai
although still a lot of supply. If the next bai is uown closing neai its lows this confiims the
weakness. Also high volume up bais on naiiow spieaus show fuithei selling.

Subsequent no uemanu up bais oi upthiusts confiim the weakness. With weakness in the
backgiounu this inuicatoi caiiies moie weight. No uemanu up bais anu upthiusts will auu
to the negative pictuie. If theie is stiength in the neai backgiounu this supply may be
testeu so look foi low volume uown bais closing in the miuule oi high, oi foi shakeouts. If
the maiket is still stiong it shoulu follow the path of least iesistance which is up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.

62
+.AA9B 47<C6' C6Q +78 fgY +78 OZZ

N7":Q None.

@$# ;&32#)/-)E1Q
A high volume up bai usually closing off the highs with the pievious bai up on high volume
inuicates supply is oveicoming uemanu. If volume is ultia high this coulu be climactic
action. Sometimes this can be a bieakout thiough an olu top which is a sign of stiength.
Bowevei make suie that it is not a false bieakout which is a S0W.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness. With weakness in the backgiounu this inuicatoi caiiies
moie weight. No uemanu up bais anu upthiusts will auu to the negative pictuie. If theie is
stiength in the neai backgiounu oi a bieakout this supply may be testeu so look foi low
volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is still
stiong it shoulu follow the path of least iesistance which is up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai
by bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this
aiea of supply it may come back uown to test it again latei (low volume uown bais closing
in the miuule oi high). A successful test woulu then be bullish.


6S
+.AA9B 47<C6' C6Q +78 SY +78 eg

N7":Q None.

@$# ;&32#)/-)E1Q
This is an up bai closing off the high showing an inciease in volume suggesting supply has
enteieu the maiket. If volume is ultia high this coulu be climactic action. Sometimes this
can be a bieakout thiough an olu top which is a sign of stiength. Bowevei make suie that it
is not a false bieakout which is a S0W.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
If the next bai is uown this confiims the weakness. Also high volume up bais on naiiow
spieaus show fuithei selling. Subsequent no uemanu up bais oi upthiusts confiim the
weakness. With weakness in the backgiounu this inuicatoi caiiies moie weight. If this is
the stait of a uistiibution phase expect whipsawing whilst a cause is built to the uownsiue.
Look foi othei S0W to confiim this inuicatoi such as upthiusts anu no uemanu.

If theie is stiength in the neai backgiounu oi a bieakout this supply may be testeu so look
foi low volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is
still stiong it shoulu follow the path of least iesistance which is up.

Also watch foi uown bais closing off the lows with high volume that show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.

64
+.AA9B 47<C6' C6Q +78 OPP

N7":Q None.

@$# ;&32#)/-)E1Q
This is a high volume up bai (often gappeu up) The high volume shows piofessional
activity in the maiket.. If volume is ultia high this coulu be climactic action. Sometimes this
can be a bieakout thiough an olu top which is a sign of stiength. Bowevei make suie that it
is not a false bieakout which is a S0W.

@$2TJ#E(1%Q
The pievious bai was up on high volume. Look caiefully to the backgiounu. Bo you have
stiength oi weakness behinu you. Aftei a peiiou of iising piices this coulu be the stait of
uistiibution by one oi moie piofessional gioups. Is theie an olu top to the left as this coulu
be absoiption volume.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness.

With weakness in the backgiounu this inuicatoi caiiies moie weight. No uemanu up bais
anu upthiusts will auu to the negative pictuie. If theie is stiength in the neai backgiounu
oi a bieakout this supply may be testeu so look foi low volume uown bais closing in the
miuule oi high, oi foi shakeouts. If the maiket is still stiong it shoulu follow the path of
least iesistance which is up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.

6S
+.AA9B 47<C6' C6Q +78 eR

N7":Q None.

@$# ;&32#)/-)E1Q
This is an up bai closing off its high showing an inciease in volume suggesting supply has
enteieu the maiket. 0ften these bais appeai as an upthiust. The bai is maikeu up but falls
off iapiuly to close on oi neai its low with an aveiage to wiue piice spieau. Bigh volume
shows selling anu low volume inuicates lack of inteiest at the highei levels by the
piofessionals. The upthiust is a money making maneuvei by the maiket makeis to catch
stops of those who aie shoit anu tiap the unwaiy into buying. Piices aie maikeu up at the
open often on goou news anu the piofessionals use this to sell. The bai iesembles a
telegiaph pole.

@$2TJ#E(1%Q
Aie you cuiiently in an up-tienu oi a uown-tienu. Bave you seen othei signs of weakness
piioi to this inuicatoi. Be veiy caieful heie. Tiue upthiusts appeai when you have
WEAKNESS in the backgiounu. This woulu be chaiacteiizeu by high volume up bais closing
in the miuule anu no uemanu up bais. If theie is stiength in the backgiounu be veiy
cautious. It is likely to be testeu oi may be a false upthiust.

>(-(#&Q
The next bai shoulu be uown to confiim this inuicatoi. Bowevei if the next bai is up on a
naiiow spieau with high volume this is also weakness. Subsequent no uemanu up bais oi
upthiusts confiim the weakness. With weakness in the backgiounu this inuicatoi caiiies
moie weight. No uemanu up bais anu upthiusts will auu to the negative pictuie. If theie is
stiength in the neai backgiounu this supply may be testeu so look foi low volume uown
bais closing in the miuule oi high, oi foi shakeouts. If the maiket is still stiong it shoulu
follow the path of least iesistance which is up. Also watch foi uown bais closing off the
lows with high volume which show potential stiength. These woulu neeu to be testeu.
Remembei the maiket is an unfoluing stoiy bai by bai. You neeu to aujust youi analysis
accoiuingly. If the maiket moves up thiough this aiea of supply it may come back uown to
test it again latei (low volume uown bais closing in the miuule oi high). A successful test
woulu then be bullish.

66
+.AA9B 47<C6' C6Q +78 OPa

N7":Q This inuicatoi is baseu upon the action of two bais.

@$# ;&32#)/-)E1Q
A high volume up bai usually closing off the highs with the next bai uown inuicates supply
is oveicoming uemanu. This can appeai similai to a top ieveisal. Auu moie stiength if the
volume is highei on the up bai anu it is into fiesh new high giounu. If the high of the uown
bai is highei than the pievious high this auus to the weakness.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
This set up shows weakness. Bowevei be cautious if volume on the uown bai was veiy high
to ultia high with the next bai up. This woulu confiim theie was buying in the uown bai
although still a lot of supply. If the next bai is uown closing neai its lows this confiims the
weakness. Also high volume up bais on naiiow spieaus show fuithei selling. Subsequent
no uemanu up bais oi upthiusts confiim the weakness. With weakness in the backgiounu
this inuicatoi caiiies moie weight. No uemanu up bais anu upthiusts will auu to the
negative pictuie.

If theie is stiength in the neai backgiounu this supply may be testeu so look foi low
volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is still
stiong it shoulu follow the path of least iesistance which is up. Also watch foi uown bais
closing off the lows with high volume which show potential stiength. These woulu neeu to
be testeu. Remembei the maiket is an unfoluing stoiy bai by bai. You neeu to aujust youi
analysis accoiuingly.

If the maiket moves up thiough this aiea of supply it may come back uown to test it again
latei (low volume uown bais closing in the miuule oi high). A successful test woulu then be
bullish.

67
+:99C6' A?:++.?:Q +78 PfY +78 fP

N7":Q None.

@$# ;&32#)/-)E1Q
The bai shoulu be an up bai on high volume anu closing off the highs. This shows supply
has enteieu the maiket. If volume is ultia high this auus to the weakness. Sometimes this
can be a bieakout thiough an olu top, which is a sign of stiength. Bowevei make suie that it
is not a false bieakout, which is a S0W.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness. With weakness in the backgiounu this inuicatoi caiiies
moie weight. No uemanu up bais anu upthiusts will auu to the negative pictuie. If theie is
stiength in the neai backgiounu oi a bieakout this supply may be testeu so look foi low
volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is still
stiong it shoulu follow the path of least iesistance, which is up.

Also watch foi uown bais closing off the lows with high volume that show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.

68
67 ;:<,6;Q +78 [Y +78 PRY +78 aPY +78 aeY +78 a[Y +78 aSY
+78 aRY +78 fZY +78 faY +78 ffY +78 fSY +78 S[Y +78 OZPY +78
OZ[Y +78 OZSY +78 OOfY +78 OPSY +78 OaeY +78 OeaY +78 OefY
+78 Oe[Y +78 OgPY +78 OgaY +78 Oge

N7":Q None.

@$# ;&32#)/-)E1Q
An up bai on a naiiow spieau closing in the miuule with low volume, oi volume lowei than
the last two bais. It can be a uown bai if the high is highei than the pievious bai. This
shows the piofessional money is not inteiesteu in highei piices at this time. If the piice
spieau is gieatei than naiiow this can still show weakness.

@$2TJ#E(1%Q
Pay paiticulai attention to the backgiounu. With stiength in the backgiounu this inuicatoi
may only cause the maiket to iest foi a few bais as the piofessionals stanu asiue befoie
iesuming the up move. If theie has been a majoi shakeout in the neai backgiounu oi heavy
buying the next bai can be a low volume up bai meaning piices aie maikeu up with
minimum iesistance, as theie is little immeuiate supply. If theie is weakness in the
backgiounu this S0W becomes moie impoitant.

>(-(#&Q
The next bai shoulu be uown to confiim this inuicatoi. With stiength in the backgiounu
expect testing oi an up bai on incieaseu volume to push thiough this S0W (effoit). If theie
aie othei S0W in the backgiounu expect lowei piices. The piofessionals have noticeu this
weakness anu aie not inteiesteu any longei in the up move. Fuithei S0W such as upthiusts
will confiim the weakness.

If you aie at oi neai an olu top to the left it is highly unlikely that a maiket will go up
thiough this olu top on no uemanu. Be cautious if following no uemanu you see a uown bai
with a naiiow spieau with volume lowei than the two pievious bais. This shows lack of
selling piessuie. Also if you see uown bais on high volume closing off the lows with the
next bai up this shows potential stiength. This woulu neeu to be testeu.

69
67 ;:<,6;Q +78 OgRY +78 Ogg

N7":Q None.

@$# ;&32#)/-)E1Q
An up bai with volume lowei than the two pievious bais shows lack of inteiest as the
maiket iises.

@$2TJ#E(1%Q
Stuuy the backgiounu caiefully anu look at the tienu. This inuicatoi woiks best when theie
is weakness in the backgiounu, oi following minoi S0S in a uowntienu. With stiength in
the backgiounu the inuicatoi alone caiiies less significance.

>(-(#&Q
The next bai shoulu be uown to confiim this inuicatoi. In a uowntienu this inuicatoi
caiiies moie weight. Beie you woulu expect lowei piices. In an uptienu it may leau to a
pause oi a small uecline back uown to suppoit at best.

Look at the full pictuie iathei than just the inuiviuual bai.


7u
8:,56:++ N,+ ,AA:,?:;Q +78 ReY +78 OeR

N7":Q None.

@$# ;&32#)/-)E1Q
An up bai closing off its highs is a potential S0W. If volume is lowei than the two pievious
bais this is no uemanu but highei volume shows selling.

@$2TJ#E(1%Q
Pay moie attention to this inuicatoi when you have othei signs of weakness in the neai
backgiounu. If theie aie S0S in the backgiounu be cautious as the maiket may just move
siueways foi a few bais.

>(-(#&Q
Look to the following bais foi confiimation. Low volume up bais back into the aiea of
weakness show no uemanu. 0pthiusts anu fuithei high volume up bais closing in the
miuule aie also signs of weakness. Be cautious if you now see a uown bai with a naiiow
spieau with volume lowei than the two pievious bais. This shows lack of selling piessuie.

Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu. Remembei you neeu to look at the
whole pictuie iathei like slotting togethei the pieces of a jig-saw.

71
8:,56:++ N,+ ,AA:,?:;Q +78 OeP

N7":Q None.

@$# ;&32#)/-)E1Q
The bai shoulu be a naiiow spieau up bai anu closing off the highs anu be into fiesh new
high giounu. Theie shoulu be no olu tiauing ianges at oi neai this level (see below). If
volume is low it shows lack of inteiest in the upsiue wheieas highei volume shows some
selling.

@$2TJ#E(1%Q
This is 0NLY vALIB if you have ALREABY SEEN A S0BSTANTIAL 0P N0vE having taken
place. Iueally theie shoulu be othei signs of weakness in the backgiounu. Bo you have an
olu top to the left. If so this coulu be absoiption volume.

>(-(#&Q
This inuicatoi shows weakness but is the volume high enough to stop the up move.. Any up
move back into this aiea on low volume with naiiow spieaus oi with upthiusts is a fuithei
S0W. Be cautious if you now see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie.

Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu. When not appeaiing in genuinely
new high giounu this can iepiesent absoiption volume. Beie the piofessionals aie willing
to absoib the supply of lockeu in tiaueis who hau bought at highei piices. This becomes a
sign of stiength.

72
8:,56:++ N,+ ,AA:,?:;Q +78 OPO

N7":Q None.

@$# ;&32#)/-)E1Q
With the pievious high volume up bai usually closing off the highs with this bai uown
inuicates supply is oveicoming uemanu. This can appeai as a top ieveisal. Auu moie
weight if the volume is highei on the up bai anu is into fiesh new high giounu.

If the high of the uown bai is highei than the pievious high this also auus to the weakness.
Be cautious if volume on the uown bai is ultia high as this coulu contain buying albeit with
a lot of supply piesent.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
Look to the following bais foi confiimation. 0ltia high volume on the uown bai with the
next bai up shows some buying although still a lot of supply piesent. Low volume up bais
back into the aiea of the supply show no uemanu anu weakness. 0pthiusts anu fuithei high
volume up bais closing in the miuule aie also signs of weakness.

Be cautious if following the weakness you see a uown bai with a naiiow spieau with
volume lowei than the two pievious bais. This shows lack of selling piessuie. Also if you
see uown bais on high volume closing off the lows with the next bai up this shows
potential stiength. This woulu neeu to be testeu.

Remembei you neeu to look at the whole pictuie iathei like slotting togethei the pieces of
a jig-saw.


7S
.A"N?.+"Q +78 OZ

N7":Q This inuicatoi neeus the next bai foi confiimation even in live bai moue.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low noimally with an
aveiage to wiue piice spieau. Also if the bai closes uown this is noimally a sign of stiength
but the high being highei than the pievious bai's high makes it a weak bai (hence the teim
hiuuen upthiust). The upthiust is a moneymaking maneuvei by the maiket makeis to catch
stops of those who aie shoit anu tiap the unwaiy into buying.

Piices aie maikeu up at the open often on goou news. Bigh volume shows selling by the
piofessionals while low volume shows theii lack of inteiest in the upsiue. The bai
iesembles a telegiaph pole.

@$2TJ#E(1%Q
Be veiy caieful heie. Tiue upthiusts appeai when you have WEAKNESS in the backgiounu.
This woulu be chaiacteiiseu by high volume up bais closing in the miuule anu no uemanu
up bais. If theie is stiength in the backgiounu be veiy cautious. It is likely to be testeu oi
may be a false upthiust. This inuicatoi appeais aftei no uemanu in the iecent backgiounu.

>(-(#&Q
Following a tiue upthiust expect lowei piices. Fuithei S0W e.g. no uemanu auus to the
weakness. Be waiy of a test with S0W in the backgiounu as it may well fail. Be cautious if
following the upthiust you see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie.
Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu.


74
.A"N?.+"Q +78 OOg

N7":Q None.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low with an aveiage to wiue
piice spieau. Also if it closes as a uown bai this is noimally a sign of stiength but the high
being highei than the pievious bai's high makes it a weak bai (hence the teim hiuuen
upthiust).

Bigh volume shows selling anu low volume inuicates lack of inteiest at the highei levels by
the piofessionals. The upthiust is a money making maneuvei by the maiket makeis to
catch stops of those who aie shoit anu tiap the unwaiy into buying. Piices aie maikeu up
at the open often on goou news. Bigh volume shows selling by the piofessionals while low
volume shows theii lack of inteiest in the upsiue. The bai iesembles a telegiaph pole.

@$2TJ#E(1%Q
Be veiy caieful heie. Tiue upthiusts appeai when you have WEAKNESS in the backgiounu.
This woulu be chaiacteiizeu by high volume up bais closing in the miuule anu no uemanu
up bais. If theie is stiength in the backgiounu be veiy cautious. It is likely to be testeu oi
may be a false upthiust. Bowevei if the maiket has alieauy fallen foi some time this coulu
be the stait of a shakeout especially if the news is bau.

>(-(#&Q
Following a tiue upthiust expect lowei piices. Fuithei S0W e.g. no uemanu auus to the
weakness. Be waiy of a test with S0W in the backgiounu as it may well fail. Be cautious if
following the upthiust you see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie.

Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu.


7S
.A"N?.+"Q +78 R

N7":Q None.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low, noimally with an
aveiage to wiue piice spieau. Also if the bai closes uown this is noimally a sign of stiength
but the high being highei than the pievious bai's high makes it a weak bai (hence the teim
hiuuen upthiust). The upthiust is a moneymaking maneuvei by the maiket makeis to catch
stops of those who aie shoit anu tiap the unwaiy into buying. Piices aie maikeu up at the
open often on goou news. Bigh volume shows selling by the piofessionals while low
volume shows theii lack of inteiest in the upsiue. The bai iesembles a telegiaph pole.

@$2TJ#E(1%Q
Be veiy caieful heie. Tiue upthiusts appeai when you have WEAKNESS in the backgiounu.
This woulu be chaiacteiizeu by high volume up bais closing in the miuule anu no uemanu
up bais. If theie is stiength in the backgiounu be veiy cautious. It is likely to be testeu oi
may be a false upthiust. Bowevei, if the maiket has alieauy fallen foi some time this coulu
be the stait of a shakeout especially if the news is bau.

>(-(#&Q
Following a tiue upthiust expect lowei piices. Fuithei S0W e.g. no uemanu auus to the
weakness. Be waiy of a test with S0W in the backgiounu as it may well fail. Be cautious if
following the upthiust you see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie.
Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu.


76
.A"N?.+"Q +78 Pg

N7":Q None.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low noimally with an
aveiage to wiue piice spieau. Also if the bai closes uown this is noimally a sign of stiength
but the high being highei than the pievious bai's high makes it a weak bai (hence the teim
hiuuen upthiust). The upthiust is a moneymaking maneuvei by the maiket makeis to
catch stops of those who aie shoit anu tiap the unwaiy into buying. Piices aie maikeu up
at the open often on goou news. Bigh volume shows selling by the piofessionals while low
volume shows theii lack of inteiest in the upsiue. The bai iesembles a telegiaph pole.

@$2TJ#E(1%Q
Be veiy caieful heie. Tiue upthiusts appeai when you have WEAKNESS in the backgiounu.
This woulu be chaiacteiizeu by high volume up bais closing in the miuule anu no uemanu
up bais. If theie is stiength in the backgiounu be veiy cautious. It is likely to be testeu oi
may be a false upthiust.

>(-(#&Q
Following a tiue upthiust expect lowei piices. Fuithei S0W e.g. no uemanu auus to the
weakness. Be waiy of a test with S0W in the backgiounu as it may well fail. Be cautious if
following the upthiust you see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie.
Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu.



77
.A"N?.+"Q +78 PY +78 gY +78 OOY +78 OfY +78 fOY +78 OZOY
+78 OZaY

N7":Q None.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low noimally with an
aveiage to wiue piice spieau. The upthiust is a moneymaking maneuvei by the maiket
makeis to catch stops of those who aie shoit anu tiap the unwaiy into buying. Piices aie
maikeu up at the open often on goou news. Bigh volume shows selling by the piofessionals
while low volume shows theii lack of inteiest in the upsiue. The bai iesembles a telegiaph
pole.

@$2TJ#E(1%Q
Be veiy caieful heie. Tiue upthiusts appeai when you have WEAKNESS in the backgiounu.
This woulu be chaiacteiizeu by high volume up bais closing in the miuule anu no uemanu
up bais. If theie is stiength in the backgiounu be veiy cautious. It is likely to be testeu oi
may be a false upthiust.

>(-(#&Q
Following a tiue upthiust expect lowei piices. Fuithei S0W e.g. no uemanu auus to the
weakness. Be waiy of a test with S0W in the backgiounu as it may well fail. Be cautious if
following the upthiust you see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie.
Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu.




78
:6; 7> , ?C+C6' <,?5:"Q +78 fY +78 OeY +78 POY +78 PPY +78
PaY +78 PeY +78 aZY +78 SO

N7":Q None.

@$# ;&32#)/-)E1Q
The bai shoulu be a naiiow spieau up bai with high volume anu closing off the highs anu
be into fiesh new high giounu. Theie shoulu be no olu tiauing ianges at oi neai this level
(see below). We know that theie has been buying by the high volume. If the maiket makeis
weie bullish they woulu have maikeu piices up on this buying. Foi the piice spieau to be
naiiow they must have been willing to supply the maiket without maiking piices up. This
type of action is beaiish.

@$2TJ#E(1%Q
This is 0NLY vALIB if you have ALREABY SEEN A S0BSTANTIAL 0P N0vE having taken
place. Aftei a peiiou of iising piices you aie vulneiable to one oi moie piofessional gioups
taking piofits. Also as maikets iise a point will be ieacheu when those tiaueis who have
misseu out on the up move will iush in to buy befoie losing out on this fantastic bull iun.
Even tiaueis that aie alieauy long will auu to theii positions. They can all be suckeu into a
bull maiket at the top. The news will be 'goou'. Bo you have an olu top to the left. If so this
coulu be absoiption volume.

>(-(#&Q
Piices shoulu now uecline. Any up move back into the aiea of supply on low volume with
naiiow spieaus oi with upthiusts is a fuithei S0W. Be cautious if you now see a uown bai
with a naiiow spieau with volume lowei than the two pievious bais. This shows lack of
selling piessuie. Also if you see uown bais on high volume closing off the lows with the
next bai up this shows potential stiength. This woulu neeu to be testeu.

But iemembei this weakness will not suuuenly uisappeai. When not appeaiing in
genuinely new high giounu this can iepiesent absoiption volume. Beie the piofessionals
aie willing to absoib the supply of lockeu in tiaueis who hau bought at highei piices. This
becomes a sign of stiength.


79
67 ?:+.9" >?7< :>>7?"Q +78 [SY +78 [R

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai following an up bai with high plus volume shows weakness. This is effoit with
no iesult.

@$2TJ#E(1%Q
Theie shoulu be up bais with incieaseu volume in the immeuiate backgiounu. These show
an effoit to push piices highei. Failuie to follow thiough on the cuiient bai inuicates
weakness.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness. If theie is stiength in the neai backgiounu this supply
may be testeu so look foi low volume uown bais closing in the miuule oi high, oi foi
shakeouts. If the maiket is still stiong it shoulu follow the path of least iesistance which is
up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai
by bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this
aiea of supply it may come back uown to test it again latei (low volume uown bais closing
in the miuule oi high). A successful test woulu then be bullish.

8u
"87 @,? ?:*:?+,9Q +78 geY +78 OP[

N7":Q This inuicatoi is baseu upon the action of two bais

@$# ;&32#)/-)E1Q
The fiist bai is an up bai closing neai its high followeu by a uown bai closing neai its low
giving the appeaiance of a top ieveisal. If the high of the fiist bai is into fiesh new high
giounu anu volume is high oi gieatei this can be climactic action.

Auu moie weight if volume is highei on the up bai. If the high of the uown bai is highei
than the pievious high this also auus to the weakness.

@$2TJ#E(1%Q
Theie shoulu be a peiiou of iising piices befoie this inuicatoi appeais.

>(-(#&Q
This set up shows weakness. Bowevei be cautious if volume on the uown bai was veiy high
to ultia high with the next bai up. This woulu confiim theie was buying in the uown bai
although still a lot of supply. Look to the following bais foi confiimation. Low volume up
bais back into the aiea of the top ieveisal show no uemanu anu weakness. 0pthiusts anu
fuithei high volume up bais closing in the miuule aie also signs of weakness.

Be waiy if this inuicatoi is immeuiately followeu by uown bais on ieuuceu volume
especially closing in the miuule with a naiiow spieau. These show potential stiength. Also
watch foi uown bais closing off the lows with high volume which show potential stiength.
These woulu neeu to be testeu. If the maiket moves up thiough this aiea of supply it may
come back uown to test it again latei (low volume uown bais closing in the miuule oi high).
A successful test woulu then be bullish.

Remembei you neeu to look at the whole pictuie iathei like slotting togethei the pieces of
a jig-saw.


81
"?,A .A <7*:Q +78 fR

N7":Q
This inuicatoi is baseu upon the action of two bais.

@$# ;&32#)/-)E1Q
The fiist bai is up anu closing off the highs. The next bai is a wiue spieau uown bai closing
neai the lows with its high highei than the fiist bai. This is uesigneu to lock tiaueis who
aie long into pooi positions.

@$2TJ#E(1%Q
Pay paiticulai attention to the backgiounu. Aftei a peiiou of iising piices this coulu be the
stait of uistiibution by one oi moie piofessional gioups. Bowevei if the maiket has alieauy
fallen foi some time this coulu be the stait of a shakeout especially if the news is bau. If
theie aie othei S0W in the neai backgiounu this auus to the weakness.

>(-(#&Q
This set up shows weakness. Bowevei be cautious if volume on the uown bai was veiy high
to ultia high with the next bai up. This woulu confiim theie was buying in the uown bai
although still a lot of supply.
Bigh volume up bais closing off theii highs, no uemanu anu upthiusts woulu confiim the
weakness. Low volume uown bais shows lack of selling. This woulu only leau to a stiong
ially if a cause has been built with buying in the backgiounu.


82
>,C9:; ":+"Q +78 R[

N7":Q None.

@$# ;&32#)/-)E1Q
A wiue spieau uown bai closing on oi neai its low, with the low anu close lowei than the
pievious few bais, inuicates weakness.

@$2TJ#E(1%Q
Theie shoulu be a test in the immeuiate backgiounu (last few bais). The test has faileu
which in itself is a sign of weakness. This inuicatoi woiks best with othei weakness in the
backgiounu. Stuuy the backgiounu caiefully anu look at the tienu. Aie theie signs of
stiength behinu you.

>(-(#&Q
Any uown move may be shoit liveu unless you have fuithei weakness in the backgiounu.
Subsequent no uemanu up bais oi upthiusts confiim the weakness. If theie is stiength in
the neai backgiounu this weakness may be testeu so look foi low volume uown bais
closing in the miuule oi high, oi foi shakeouts. If the maiket is still stiong it shoulu follow
the path of least iesistance which is up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.


8S
?:*:?+,9 ,>":? :>>7?" "7 ?C+:Q +78 gS

N7":Q This inuicatoi is baseu upon the action of two bais

@$# ;&32#)/-)E1Q
The fiist bai is an up bai closing on its high followeu by a uown bai ietiacing most of the
pievious bai's gain. Sometimes this can appeai as a top ieveisal. Auu moie weight if the
volume is highei on the up bai anu is into fiesh new high giounu. If the high of the uown
bai is highei than the pievious high this also auus to the weakness.

@$2TJ#E(1%Q
Bave you seen any pievious S0W in the backgiounu. Theie has been an effoit to iise fiom
the incieaseu volume but foi the next bai to be uown shows supply has appeaieu. Stiong
maikets uo not behave in this way.

>(-(#&Q
This set up shows weakness. Bowevei be cautious if volume on the uown bai was veiy high
to ultia high with the next bai up. This woulu confiim theie was buying in the uown bai
although still a lot of supply. If the next bai is uown closing neai its lows this confiims the
weakness. Also high volume up bais on naiiow spieaus show fuithei selling.

Subsequent no uemanu up bais oi upthiusts confiim the weakness. With weakness in the
backgiounu this inuicatoi caiiies moie weight. If theie is stiength in the neai backgiounu
this weakness may be testeu so look foi low volume uown bais closing in the miuule oi
high, oi foi shakeouts. If the maiket is still stiong it shoulu follow the path of least
iesistance which is up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. If the maiket moves up thiough this aiea of
supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish. Remembei you neeu to look at the
whole pictuie iathei like slotting togethei the pieces of a jig-saw.




84
"7A ?:*:?+,9Q +78 OZR

N7":Q This inuicatoi is baseu upon the action of two bais

@$# ;&32#)/-)E1Q
The fiist bai is an up bai closing neai its high followeu by a uown bai closing neai its low
giving the appeaiance of a top ieveisal. If the high of the fiist bai is into fiesh new high
giounu anu volume is high oi gieatei this can be climactic action. Auu moie weight if
volume is highei on the up bai. If the high of the uown bai is highei than the pievious high
this also auus to the weakness.

@$2TJ#E(1%Q
Theie shoulu be a peiiou of iising piices befoie this inuicatoi appeais.

>(-(#&Q
This set up shows weakness. Bowevei be cautious if volume on the uown bai was veiy high
to ultia high with the next bai up. This woulu confiim theie was buying in the uown bai
although still a lot of supply. Look to the following bais foi confiimation.

Low volume up bais back into the aiea of the top ieveisal show no uemanu anu weakness.
0pthiusts anu fuithei high volume up bais closing in the miuule aie also signs of weakness.
Be waiy if this inuicatoi is immeuiately followeu by uown bais on ieuuceu volume
especially closing in the miuule with a naiiow spieau. These show potential stiength.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. If the maiket moves up thiough this aiea of
supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.

Remembei you neeu to look at the whole pictuie iathei like slotting togethei the pieces of
a jig-saw.


8S
NC;;:6 .A"N?.+"Q +78 eZ

N7":Q None.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low with an aveiage to wiue
piice spieau. Closing as a uown bai is noimally a sign of stiength but the high being highei
than the pievious bai's high makes it a weak bai (hence the teim hiuuen upthiust). Bigh
volume shows selling anu low volume inuicates lack of inteiest at the highei levels by the
piofessionals.

The upthiust is a moneymaking maneuvei by the maiket makeis to catch stops of those
who aie shoit anu tiap the unwaiy into buying. Piices aie maikeu up at the open often on
goou news. Bigh volume shows selling by the piofessionals while low volume shows theii
lack of inteiest in the upsiue. The bai iesembles a telegiaph pole.

@$2TJ#E(1%Q
Be veiy caieful heie. Tiue upthiusts appeai when you have WEAKNESS in the backgiounu.
This woulu be chaiacteiizeu by high volume up bais closing in the miuule anu no uemanu
up bais. If theie is stiength in the backgiounu be veiy cautious. It is likely to be testeu oi
may be a false upthiust. Bowevei if the maiket has alieauy fallen foi some time this coulu
be the stait of a shakeout especially if the news is bau.

>(-(#&Q
Following a tiue upthiust expect lowei piices. Fuithei S0W e.g. no uemanu auus to the
weakness. Be waiy of a test with S0W in the backgiounu as it may well fail. Be cautious if
following the upthiust you see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie. Also if you see uown bais on
high volume closing off the lows with the next bai up this shows potential stiength. This
woulu neeu to be testeu.

86
A7":6"C,9 @.BC6' 49C<,lQ +78 O

N7":Q None.

@$# ;&32#)/-)E1Q
A high to ultia high volume up bai closing in the miuule shows supply oveicoming uemanu
anu inuicates piofessional selling. In oiuei to sell the piofessionals have to unloau into a
iising maiket by selling to the heiu. If they solu on uown bais piices woulu fall too iapiuly
against them. This bai shoulu be into new fiesh high giounu.

@$2TJ#E(1%Q
Theie shoulu be an up move behinu you. Eventually the heiu panic foi feai of missing out
on highei piices anu buy on the goou news. The piofessional gioups will then sell into this
fienzy of buying.

>(-(#&Q
The next bai shoulu be uown to confiim this inuicatoi. Look to the next few bais foi
confiimation. You woulu expect to see upthiusts, no uemanu up bais anu fuithei up bais
on high volume closing in the miuule to confiim the weakness. Remembei the piofessionals
may have fuithei sell oiueis to execute. This will iequiie them to suppoit the maiket in the
shoit teim. If you see low volume uown bais oi high volume uown bais closing in the
miuule the maiket is not yet ieauy to fall. Bigh volume up bais on a wiue spieau closing up
anu thiough the olu highs iepiesent absoiption volume anu stiength.





87
+.AA9B 7*:?47<C6' ;:<,6;Q +78 Ofg

67":: None.

@$# ;&32#)/-)E1Q
This inuicatoi is tiying to pick up subtle changes in the balance of supply anu uemanu.
Remembei weakness, when it appeais will be on an up bai. The bai has noticeu some
selling enteiing the maiket. Sometimes this can be a bieakout thiough an olu top to the left
which is a sign of stiength. Bowevei make suie it is not a false bieakout which is a S0W.

@$2TJ#E(1%Q
Look foi othei signs of weakness in the immeuiate backgiounu to suppoit this inuicatoi.
0n its own it may not be sufficient to leau to a fall especially if you aie in an up tienu. Is
theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
The next bai shoulu be uown to confiim ths inuicatoi.With weakness in the backgiounu
give this inuicatoi moie weight. Theie may still neeu to be fuithei selling on up bais anu no
uemanu befoie the maiket can fall.

With stiength in the backgiounu theie may well be too much suppoit foi a fall to take place.
If you see low volume uown bais especially on a naiiow spieau oi high volume uown bais
closing in the miuule oi high this confiims the stiength.

Always iemembei to look at the whole pictuie anu not the last few bais.

88
+.AA9B +8,<AC6' ;:<,6;Q +78 fe

N7":Q None.

@$# ;&32#)/-)E1Q
This is a high volume up bai closing off its highs. Stiong maikets uo not behave in this way.
If volume is ultia high this coulu be climactic action. Sometimes this can be a bieakout
thiough an olu top which is a sign of stiength. Bowevei make suie that it is not a false
bieakout which is a S0W.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
If the bai iepiesents a genuine bieakout the supply piesent will neeu to be testeu. A false
bieakout woulu be a sign of weakness. If the next bai is uown closing neai its lows this
confiims the weakness. Also high volume up bais on naiiow spieaus show fuithei selling.
Subsequent no uemanu up bais oi upthiusts confiim the weakness. With weakness in the
backgiounu this inuicatoi caiiies moie weight. No uemanu up bais anu upthiusts will auu
to the negative pictuie.

If theie is stiength in the neai backgiounu oi a bieakout this supply may be testeu so look
foi low volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is
still stiong it shoulu follow the path of least iesistance which is up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai
by bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this
aiea of supply it may come back uown to test it again latei (low volume uown bais closing
in the miuule oi high). A successful test woulu then be bullish.


89
.A"N?.+" ,>":? 8:,56:++Q +78 g[

N7":Q None.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low noimally with an
aveiage to wiue piice spieau.

The upthiust is a money making maneuvei by the maiket makeis to catch stops of those
who aie shoit anu tiap the unwaiy into buying. Piices aie maikeu up at the open often on
goou news. Bigh volume shows selling by the piofessionals while low volume shows theii
lack of inteiest in the upsiue. The bai iesembles a telegiaph pole.

@$2TJ#E(1%Q
Be veiy caieful heie. Tiue upthiusts appeai when you have WEAKNESS in the backgiounu.
This woulu be chaiacteiizeu by high volume up bais closing in the miuule anu no uemanu
up bais.

If theie is stiength in the backgiounu be veiy cautious. It is likely to be testeu oi may be a
false upthiust. The pievious bai was a high volume up bai which in itself showeu supply.

>(-(#&Q
Following a tiue upthiust expect lowei piices. Fuithei S0W e.g. no uemanu auus to the
weakness. Be waiy of a test with S0W in the backgiounu as it may well fail. Be cautious if
following the upthiust you see a uown bai with a naiiow spieau with volume lowei than
the two pievious bais. This shows lack of selling piessuie.

Also if you see uown bais on high volume closing off the lows with the next bai up this
shows potential stiength. This woulu neeu to be testeu.

9u
8:,56:++ @,+:; 76 A?C4: ,4"C76Q +78 SR

N7":Q None.

@$# ;&32#)/-)E1Q
This bai is a wiue spieau uown bai closing on its low. volume is not taken into account
when piouucing the inuicatoi. Piices aie maikeu up at the opening to attiact a following
anu catch stops.

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. This
signal woiks best when theie is weakness in the backgiounu. Bowevei if the maiket hau
alieauy fallen foi some time this coulu be the stait of a shakeout especially if the news is
bau.

>(-(#&Q
This set up shows weakness. Bowevei be cautious if volume on the uown bai was veiy high
to ultia high with the next bai up. This woulu confiim theie was buying in the uown bai
although still a lot of supply. If the next bai is uown this confiims the weakness. Also high
volume up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness.

With weakness in the backgiounu this inuicatoi caiiies moie weight. No uemanu up bais
anu upthiusts will auu to the negative pictuie. These all suggest a uistiibution phase which
may whipsaw until complete.
Remembei the news will be goou to confuse you. If theie is stiength in the neai
backgiounu expect this supply to be testeu so look foi low volume uown bais closing in the
miuule oi high. If the maiket is still stiong it shoulu follow the path of least iesistance,
which is up.

Also watch out foi uown bais closing off the lows with high volume, which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei. A successful test woulu then be
bullish.



91
A7++C@9: NC;;:6 +:99C6'Q +78 gZ

N7":Q None.

@$# ;&32#)/-)E1Q
This is a level oi up bai showing an inciease in volume (supply) oi low volume (no
uemanu).

@$2TJ#E(1%Q
Look caiefully to the backgiounu. Bo you have stiength oi weakness behinu you. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness. With weakness in the backgiounu this inuicatoi caiiies
moie weight. No uemanu up bais anu upthiusts will auu to the negative pictuie.

If theie is stiength in the neai backgiounu this supply may be testeu so look foi low
volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is still
stiong it shoulu follow the path of least iesistance which is up. Also watch foi uown bais
closing off the lows with high volume which show potential stiength. These woulu neeu to
be testeu.

Remembei the maiket is an unfoluing stoiy bai by bai. You neeu to aujust youi analysis
accoiuingly. If the maiket moves up thiough this aiea of supply it may come back uown to
test it again latei (low volume uown bais closing in the miuule oi high). A successful test
woulu then be bullish.


92
A7":6"C,9 49C<,4"C4 ,4"C76Q +78 Rg

N7":Q None.

@$# ;&32#)/-)E1Q
The pievious bai was an up bai showing an inciease in volume (ultia high volume auus to
the weakness). Foi the cuiient bai to close off its highs still with high volume suggests
supply coming into the maiket. This is especially tiue if you aie into new fiesh high giounu.
Stiong maikets uo not behave in this way. Sometimes this can be a bieakout thiough an
olu top which is a sign of stiength. Bowevei make suie that it is not a false bieakout which
is a S0W.

@$2TJ#E(1%Q
The pievious bai was an up bai with high volume. Look caiefully to the backgiounu. Bo
you have stiength oi weakness behinu you. Aftei a peiiou of iising piices this coulu be the
stait of uistiibution by one oi moie piofessional gioups. Is theie an olu top to the left as
this coulu be absoiption volume.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness. The maiket may neeu to uistiibute fuithei befoie a uown
move can begin so be patient. The piofessionals uo this by suppoiting the maiket until they
have solu theii iemaining holuings. But iemembei this weakness will not suuuenly
uisappeai.

If theie is stiength in the neai backgiounu oi a bieakout this supply may be testeu so look
foi low volume uown bais closing in the miuule oi high, oi foi shakeouts. If the maiket is
still stiong it shoulu follow the path of least iesistance which is up.

Remembei the maiket is an unfoluing stoiy bai by bai. You neeu to aujust youi analysis
accoiuingly. If the maiket pushes up thiough this aiea of supply it may come back uown to
test it again latei. A successful test woulu then be bullish.


9S
.A"N?.+" ,>":? +.AA9BQ +78 OPg


N7":Q None.

@$# ;&32#)/-)E1Q
The bai is maikeu up but falls off iapiuly to close on oi neai its low noimally with an
aveiage to wiue piice spieau. The upthiust is a money making maneuvei by the maiket
makeis to catch stops of those who aie shoit anu tiap the unwaiy into buying. Piices aie
maikeu up at the open often on goou news. Bigh volume shows selling by the piofessionals
while low volume shows theii lack of inteiest in the upsiue. The bai iesembles a telegiaph
pole.

@$2TJ#E(1%Q
The pievious bai was up with high volume. Look caiefully to the backgiounu. Aftei a
peiiou of iising piices this coulu be the stait of uistiibution by one oi moie piofessional
gioups. Is theie an olu top to the left as this coulu be absoiption volume.

>(-(#&Q
If the next bai is uown closing neai its lows this confiims the weakness. Also high volume
up bais on naiiow spieaus show fuithei selling. Subsequent no uemanu up bais oi
upthiusts confiim the weakness.

With weakness in the backgiounu this inuicatoi caiiies moie weight. No uemanu up bais
anu upthiusts will auu to the negative pictuie. If theie is stiength in the neai backgiounu
this supply may be testeu so look foi low volume uown bais closing in the miuule oi high,
oi foi shakeouts. If the maiket is still stiong it shoulu follow the path of least iesistance
which is up.

Also watch foi uown bais closing off the lows with high volume which show potential
stiength. These woulu neeu to be testeu. Remembei the maiket is an unfoluing stoiy bai by
bai. You neeu to aujust youi analysis accoiuingly. If the maiket moves up thiough this aiea
of supply it may come back uown to test it again latei (low volume uown bais closing in the
miuule oi high). A successful test woulu then be bullish.








94
+C'6+ 7> +"?:6'"N
9S
"87 @,? ?:*:?+,9Q +7+ ge

N7":Q This inuicatoi is baseu upon the action of two bais.

@$# ;&32#)/-)E1Q
The fiist bai is maikeu uown shaiply with the seconu bai up anu closing neai its high. This
can give the appeaiance of a bottom ieveisal oi a test ovei two bais. It is uesigneu to shake
you out of the maiket anu catch stops. It woiks bettei when volume is highei on the uown
bai. Also auu stiength if the low of the fiist bai is uown into fiesh new low giounu. If the
volume on the up leg of the ieveisal is low this can be a type of 'test' in itself. Be veiy
caieful if the seconu bai is up but closes off its highs on high volume. This suggests a lot of
supply anu you woulu expect that supply to be testeu.

@$2TJ#E(1%Q
This inuicatoi shoulu take place aftei a maiket fall anu mostly happens on maiket lows.
Youi skill as a tiaueiinvestoi has to ueciue if volume on the uown bai is sufficient to give
cause to an up move.

>(-(#&Q
Remembei that although buying has appeaieu theie may still be a lot of supply. No maiket
can ially fai with supply piesent. Expect shakeouts to iemove the iemaining weak holueis
followeu by testing to ensuie supply has uisappeaieu. 0nly then can the maiket tuin
bullish.

Be veiy cautious if you now see low volume up bais, oi high volume up bais closing in the
miuule especially on a naiiow spieau, which all inuicate weakness.


96
"87 @,? ?:*:?+,9Q +7+ fSY +7+ OaP

N7":Q This inuicatoi is baseu upon the action of two bais.

@$# ;&32#)/-)E1Q
The fiist bai is a uown bai closing neai its low followeu by an up bai closing neai its high
giving the appeaiance of a bottom ieveisal. If the low of the fiist bai is into fiesh new low
giounu anu volume is high oi gieatei this can be climactic action. Theie comes a point
when the heiu will panic anu sell usually on bau news. If the piofessionals now ueciue the
piice levels aie attiactive they will step in anu absoib that selling cieating the high volume.
Auu moie weight if volume is highei on the uown bai..

If the low of the up bai is lowei than the pievious low this also auus to the stiength. Be
veiy caieful if the seconu bai is up but closes off its highs on high volume. This suggests a
lot of supply anu you woulu expect that supply to be testeu.

@$2TJ#E(1%Q
Theie shoulu be a peiiou of falling piices befoie this inuicatoi occuis.

>(-(#&Q
Remembei although buying has appeaieu theie is still a lot of supply. No maiket can ially
fai with supply piesent. Expect shakeouts to iemove the iemaining weak holueis followeu
by testing to ensuie supply has uisappeaieu. 0nly then can the maiket tuin bullish. If
volume on the up leg of the bottom ieveisal is low this can be a type of 'test' in itself.

Be veiy cautious if you now see low volume up bais, oi high volume up bais closing in the
miuule especially on a naiiow spieau, which all inuicate weakness.

97
":+" ,>":? +N,5:7."Q +7+ Rf

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai. If
the news was bau anu volume was high this can appeai as a shakeout, oi even a selling
climax which woulu maik the stait of accumulation. Tests on low volume in the cash
maiket will cause the piofessionals to entei the futuies maiket iesulting in highei volumes
theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. If volume was too high foi a ieliable test you neeu to ueciue whethei the
maiket makeis aie piepaieu to absoib that supply anu take piices highei. If theie is
stiength in the backgiounu anu the test bai is back uown into the aiea of buying a
successful test is a stiong inuication of stiength showing supply has uisappeaieu. If you aie
in an uptienu anu the test follows some minoi signs of weakness you woulu anticipate the
up move to continue. Supply appeaiing aftei an up move is often testeu. If the supply is
sufficient to stop the up move expect any subsequent test to fail which in itself is a sign of
weakness. uive extia weight to a seconu test in a bullish phase if the seconu test has lowei
volume than the fiist. Be cautious if the test is followeu by low volume up bais, upthiusts
oi high volume up bais closing in the miuule especially on a naiiow spieau. If the bai
appeaieu as a selling climax expect futuie shakeouts anu testing.

98
":+" ,>":? .A"N?.+"Q +7+ Og

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
This paiticulai inuicatoi occuis aftei a iecent upthiust. Tests on low volume in the cash
maiket will cause the piofessionals to entei the futuies maiket iesulting in highei volumes
theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. If volume was too high foi a ieliable test you neeu to ueciue whethei the
maiket makeis aie piepaieu to absoib that supply anu take piices highei. If theie is
stiength in the backgiounu anu the test bai is back uown into the aiea of buying a
successful test is a stiong inuication of stiength showing supply has uisappeaieu. If you aie
in an uptienu anu the test follows some minoi signs of weakness you woulu anticipate the
up move to continue. Supply appeaiing aftei an up move is often testeu. If the supply is
sufficient to stop the up move expect any subsequent test to fail which in itself is a sign of
weakness.

uive extia weight to a seconu test in a bullish phase if the seconu test has lowei volume
than the fiist. Be cautious if the test is followeu by low volume up bais, upthiusts oi high
volume up bais closing in the miuule especially on a naiiow spieau. Remembei you neeu
to look at the oveiall pictuie not just the inuiviuual bais.

99
A7":6"C,9 +"7AAC6' *79.<:Q +7+ OY +7+ e

N7":Q None.

@$# ;&32#)/-)E1Q
This shoulu be a uown bai on volume gieatei than the last few bais which can be gappeu
uown often on bau news. The bai shoulu close well off the lows to show uemanu has
absoibeu the supply. Remembei the piofessionals have to buy on uown bais anu will also
covei shoits which auus to the volume. Panic selling fiom those tiaueis on the wiong siue
of the maiket is absoibeu by the maiket makeis who now finu piices attiactive. The bai
shoulu be into fiesh new low giounu.

@$2TJ#E(1%Q
Theie shoulu be a uown move behinu you. Weak holueis will eventually panic anu sell out
iegaiuless of the piice offeiing the piofessionals the oppoitunity to acquiie holuings at a
goou piice. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim the inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows on bau news uays.
Bowevei, oveiall they aie buying moie than they aie selling. Remembei this inuicatoi
picks up uemanu coming in but theie is still supply piesent. A maiket will not ially fai until
the piofessionals have checkeu to see if this supply has uisappeaieu. This they uo with
shakeouts anu testing. Shakeouts aie usually on a wiue spieau uown closing neai the highs.
If volume is low this becomes a test like bai anu shows supply has uisappeaieu. If volume
on the shakeout is high expect testing at a latei uate. An iueal test is back into the aiea of
the stopping volume. The test shoulu be a maik uown with a naiiow to aveiage spieau
closing in the miuule oi high on low volume. This senus a message to weak holueis to show
theii hanu. The low volume suggests the supply has uisappeaieu.

Remembei if the maiket is still weak you woulu expect high volume up bais closing off the
highs with the next bai uown, upthiusts especially on high volume anu no uemanu.


1uu
@,+C4 ":+"Q +7+ OOY +7+ PP

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
Sometimes this inuicatoi appeais as a shakeout, which is a maik uown but on a wiue
spieau closing up neai the high to shake out weak holueis. If volume is low then supply has
uiieu up. Bigh volume suggests uemanu oveicame the supply. If the spieau is naiiow it will
have less impact. Tests on low volume in the cash maiket will cause the piofessionals to
entei the futuies maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. A high volume testshakeout may neeu to be ie-testeu. If theie is stiength
in the backgiounu anu the test bai is back uown into the aiea of buying a successful test is a
stiong inuication of stiength showing supply has uisappeaieu. If you aie in an uptienu anu
the test follows some minoi signs of weakness you woulu anticipate the up move to
continue. Supply appeaiing aftei an up move is often testeu. If the supply is sufficient to
stop the up move expect any subsequent test to fail which in itself is a sign of weakness.
uive extia weight to a seconu test in a bullish phase if the seconu test has lowei volume
than the fiist.

Be cautious if the test oi shakeout is followeu by low volume up bais, upthiusts oi high
volume up bais closing in the miuule especially on a naiiow spieau. Remembei you neeu
to look at the oveiall pictuie not just the inuiviuual bais.

1u1
A7":6"C,9 49C<,4"C4 ,4"C76m+N,5:7."Q +7+ faY +7+ Se

N7":Q None.

@$# ;&32#)/-)E1Q
A shakeout is a maik uown on a wiue spieau closing up neai the high to shake out weak
holueis. Bigh volume suggests uemanu oveicame the supply but iemembei this supply will
holu back futuie upwaiu piogiess. If the spieau is naiiow it will have less impact. Exeicise
caution if the bai has gappeu uown as this can inuicate hiuuen weakness.

If volume is ultia high this can be climactic action anu the stait of accumulation in which
case a naiiow spieau auus to the stiength if it is into new fiesh low giounu..

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. You shoulu see stiength in the backgiounu with
stopping volume oi a selling climax. Aie theie some minoi S0W in an uptienu oi has
supply hit the maiket.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. A shakeout on low volume is ieally a
violent test anu has the same effect. It shows supply has uisappeaieu anu you woulu then
expect highei piices.

A shakeout on high volume shows uemanu was piepaieu to absoib the supply on that bai
but they will likely want to test that supply in the futuie. Any low volume testing back into
the aiea of the shakeout woulu be a stiong S0S.

Be cautious if the shakeout is followeu by low volume up bais, oi high volume up bais
closing in the miuule especially on a naiiow spieau. If the maiket staits to whipsaw anu
goes siueways it may be builuing a cause foi the next up move.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.


1u2
@7""7< ?:*:?+,9Q +7+ SRY +7+ SgY +7+ gS

67":Q This inuicatoi is baseu upon the action of two bais.

@$# ;&32#)/-)E1Q
The fiist bai is a uown bai closing neai its low followeu by an up bai closing neai its high
giving the appeaiance of a bottom ieveisal. If the low of the fiist bai is into fiesh new low
giounu anu volume is high oi gieatei this can be climactic action. Theie comes a point
when the heiu will panic anu sell usually on bau news. If the piofessionals now ueciue the
piice levels aie attiactive they will step in anu absoib that selling cieating the high volume.
Auu moie weight if volume is highei on the uown bai. If the low of the up bai is lowei than
the pievious low this also auus to the stiength. Be veiy caieful if the seconu bai is up but
closes off its highs on high volume. This suggests a lot of supply anu you woulu expect that
supply to be testeu.

@$2TJ#E(1%Q
Theie shoulu be a peiiou of falling piices befoie this inuicatoi occuis.


>(-(#&Q
Remembei although buying has appeaieu theie is still a lot of supply. No maiket can ially
fai with supply piesent. Expect shakeouts to iemove the iemaining weak holueis followeu
by testing to ensuie supply has uisappeaieu. 0nly then can the maiket tuin bullish.

If volume on the up leg of the bottom ieveisal is low this can be a type of 'test' in itself.

Be veiy cautious if you now see low volume up bais, oi high volume up bais closing in the
miuule especially on a naiiow spieau, which all inuicate weakness.


1uS
67 +.AA9Bm":+"Q +7+ R[Y +7+ Oae

N7":Q None.

@$# ;&32#)/-)E1Q
This is a test like bai with a maik uown uuiing the bai (often on bau news) to challenge
any weak holueis to panic anu sell. If they uo not sell the piice iebounus up towaius the
miuule oi high anu volume is low (can be high in the futuies maiket). This lack of selling
gives the piofessionals confiuence that they uo not have to absoib laige amounts of supply.
Tests on low volume in the cash maiket will cause the piofessionals to entei the futuies
maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. No supply woiks best when theie is stiength in
the backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu
this inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a
few bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following no supply expect highei piices pioviueu theie is stiength in the backgiounu..
Failuie to uo so is a sign that the maiket is not yet ieauy to go up. If theie is stiength in the
backgiounu anu the no supply bai is back uown into the aiea of buying this is a stiong
inuication of stiength showing supply has uisappeaieu. If you aie in an uptienu anu the no
supply follows some minoi signs of weakness you woulu anticipate the up move to
continue. Supply appeaiing aftei an up move is often testeu. If the supply is sufficient to
stop the up move expect any subsequent no supply bai to fail which in itself is a sign of
weakness.

Be cautious if the no supply bai is followeu by low volume uown bais, upthiusts oi high
volume up bais closing in the miuule especially on a naiiow spieau.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.


1u4
67 +.AA9Bm ":+"Q +7+ RO

N7":Q None.

@$# ;&32#)/-)E1Q
This bai has fallen off on low volume anu a naiiow spieau showing a lack of selling
piessuie at that point. Sometimes it may close up on the miuule oi high which iepiesents a
test.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. No supply woiks best when theie is stiength in
the backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu
this inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a
few bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following no supply expect highei piices pioviueu theie is stiength in the backgiounu.
Failuie to uo so is a sign that the maiket is not yet ieauy to go up. If theie is stiength in the
backgiounu anu the no supply bai is back uown into the aiea of buying this is a stiong
inuication of stiength showing supply has uisappeaieu. If you aie in an uptienu anu the no
supply follows some minoi signs of weakness you woulu anticipate the up move to
continue. Supply appeaiing aftei an up move is often testeu. If the supply is sufficient to
stop the up move expect any subsequent no supply bai to fail which in itself is a sign of
weakness. Be cautious if the no supply bai is followeu by low volume up bais, upthiusts oi
high volume up bais closing in the miuule especially on a naiiow spieau.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

1uS
67 +.AA9BQ +7+ OgRY +7+ Ogg

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai with volume lowei than the two pievious bais shows lack of selling piessuie as
the maiket falls.

@$2TJ#E(1%Q
Stuuy the backgiounu caiefully anu look at the tienu. This inuicatoi woiks best when theie
is stiength in the backgiounu, oi following minoi S0W in an uptienu. With weakness in the
backgiounu the inuicatoi alone caiiies less significance.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. In an uptienu this inuicatoi caiiies
moie weight. Beie you woulu expect highei piices. In a uowntienu it may leau to a pause
oi a small ially back up to iesistance at best.

Look at the full pictuie iathei than just the inuiviuual bai.

1u6
+C<A9: ":+"Q +7+ POY +7+ SS

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
Sometimes this inuicatoi appeais as a shakeout, which is a maik uown but on a wiue
spieau closing up neai the high to shake out weak holueis. If volume is low then supply has
uiieu up. Bigh volume suggests uemanu oveicame the supply. If the spieau is naiiow it will
have less impact. Tests on low volume in the cash maiket will cause the piofessionals to
entei the futuies maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. A high volume testshakeout may neeu to be ie-testeu. If theie is stiength
in the backgiounu anu the test bai is back uown into the aiea of buying a successful test is a
stiong inuication of stiength showing supply has uisappeaieu. If you aie in an uptienu anu
the test follows some minoi signs of weakness you woulu anticipate the up move to
continue. Supply appeaiing aftei an up move is often testeu. If the supply is sufficient to
stop the up move expect any subsequent test to fail which in itself is a sign of weakness.
uive extia weight to a seconu test in a bullish phase if the seconu test has lowei volume
than the fiist.

Be cautious if the test oi shakeout is followeu by low volume up bais, upthiusts oi high
volume up bais closing in the miuule especially on a naiiow spieau. Remembei you neeu
to look at the oveiall pictuie not just the inuiviuual bais.

1u7
A7":6"C,9 +"7AAAC6' *79.<:Q +7+ aY +7+ S[Y +7+ OPaY +7+ OPSY
+7+ OaOY +7+ Oaf

N7":Q None.

@$# ;&32#)/-)E1Q
This shoulu be a uown bai on volume gieatei than the last few bais which can be gappeu
uown often on bau news. The bai shoulu close well off the lows to show uemanu has
absoibeu the supply. Remembei the piofessionals have to buy on uown bais anu will also
covei shoits which auus to the volume. Panic selling fiom those tiaueis on the wiong siue
of the maiket is absoibeu by the maiket makeis who now finu piices attiactive. The bai
shoulu be into fiesh new low giounu.

@$2TJ#E(1%Q
Theie shoulu be a uown move behinu you. Weak holueis will eventually panic anu sell out
iegaiuless of the piice offeiing the piofessionals the oppoitunity to acquiie holuings at a
goou piice. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim the inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows on bau news uays.
Bowevei, oveiall they aie buying moie than they aie selling. Remembei this inuicatoi
picks up uemanu coming in but theie is still supply piesent. A maiket will not ially fai until
the piofessionals have checkeu to see if this supply has uisappeaieu. This they uo with
shakeouts anu testing. Shakeouts aie usually on a wiue spieau uown closing neai the highs.
If volume is low this becomes a test like bai anu shows supply has uisappeaieu. If volume
on the shakeout is high expect testing at a latei uate. An iueal test is back into the aiea of
the stopping volume. The test shoulu be a maik uown with a naiiow to aveiage spieau
closing in the miuule oi high on low volume. This senus a message to weak holueis to show
theii hanu. The low volume suggests the supply has uisappeaieu.

Remembei if the maiket is still weak you woulu expect high volume up bais closing off the
highs with the next bai uown, upthiusts especially on high volume anu no uemanu.

1u8
A7":6"C,9 49C<,4"C4 ,4"C76Q +7+ aa

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai with high to ultia high volume must contain buying fiom the piofessionals
especially if it is into fiesh new low giounu anu the next bai is up. 0ne oi moie piofessional
gioups will have ueciueu that the unueilying maiket is now goou value anu will step in anu
buy absoibing the supply. Coveiing of shoits will auu to the volume.

@$2TJ#E(1%Q
Theie shoulu be a cleai uowntienu in place in the backgiounu. Weak holueis will
eventually panic anu sell out iegaiuless of the piice offeiing the piofessionals the
oppoitunity to acquiie holuings at a goou piice. 0nly buying by the piofessionals can stop a
uown move. Coveiing shoits will auu to the volume. This has to be uone on uown bais so as
not to move piices against them. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows. Bowevei, oveiall
they aie buying moie than they aie selling. Remembei this inuicatoi picks up uemanu
coming in but theie is still supply piesent. A maiket will not ially fai until the piofessionals
have checkeu to see if this supply has uisappeaieu. This they uo with shakeouts anu testing.
Shakeouts aie usually on a wiue spieau uown closing neai the highs. If volume is low this
becomes a test like bai anu shows supply has uisappeaieu.

If volume on the shakeout is high expect testing at a latei uate. An iueal test is back into the
aiea of the stopping volume. The test shoulu be a maik uown with a naiiow to aveiage
spieau closing in the miuule oi high on low volume. This senus a message to weak holueis
to show theii hanu. The low volume suggests the supply has uisappeaieu. Remembei if the
maiket is still weak you woulu expect high volume up bais closing off the highs with the
next bai uown, upthiusts especially on high volume anu no uemanu.

1u9
A7":6"C,9 49C<,4"C4 ,4"C76Q +7+ ReY +7+ OZPY +7+ OPeY +7+ OPgY
+7+ OaS

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai with high to ultia high volume must contain buying fiom the piofessionals
especially if it is into new fiesh low giounu anu the next bai is up. 0ne oi moie piofessional
gioups will have ueciueu that the unueilying maiket is now goou value anu will step in anu
buy absoibing the supply. Coveiing of shoits will auu to the volume.

@$2TJ#E(1%Q
Theie shoulu be a cleai uowntienu in place in the backgiounu. Weak holueis will
eventually panic anu sell out iegaiuless of the piice offeiing the piofessionals the
oppoitunity to acquiie holuings at a goou piice. 0nly buying by the piofessionals can stop a
uown move. Coveiing shoits will auu to the volume. This has to be uone on uown bais so as
not to move piices against them. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows. Bowevei, oveiall
they aie buying moie than they aie selling. Remembei this inuicatoi picks up uemanu
coming in but theie is still supply piesent. A maiket will not ially fai until the piofessionals
have checkeu to see if this supply has uisappeaieu. This they uo with shakeouts anu testing.
Shakeouts aie usually on a wiue spieau uown closing neai the highs. If volume is low this
becomes a test like bai anu shows supply has uisappeaieu. If volume on the shakeout is
high expect testing at a latei uate. An iueal test is back into the aiea of the stopping volume.
The test shoulu be a maik uown with a naiiow to aveiage spieau closing in the miuule oi
high on low volume. This senus a message to weak holueis to show theii hanu. The low
volume suggests the supply has uisappeaieu.

Remembei if the maiket is still weak you woulu expect high volume up bais closing off the
highs with the next bai uown, upthiusts especially on high volume anu no uemanu.

11u
+N,5:7."Q +7+ SZY +7+ OOaY +7+ OOg

N7":Q This inuicatoi occuis ovei 2 bais.

@$# ;&32#)/-)E1Q
A shakeout is a maik uown on a wiue spieau closing up neai the high to shake out weak
holueis. If volume is low then supply has uiieu up. Bigh volume suggests uemanu oveicame
the supply but iemembei this supply will holu back futuie upwaiu piogiess. If the spieau
is naiiow it will have less impact. Exeicise caution if the bai has gappeu uown as this can
inuicate hiuuen weakness. If volume is ultia high this can be climactic action anu the stait
of accumulation. This inuicatoi occuis ovei two bais. The fiist has shown stiength which
has causeu inteiest with the piofessional tiaueis, the seconu bai is up which confiims that
stiength. Sometimes this can give the appeaiance of a bottom ieveisal. Be veiy caieful if
the seconu bai is up but closes off its highs on high volume. This suggests a lot of supply
anu you woulu expect that supply to be testeu. If the close of the seconu bai is highei than
the fiist bai's high this auus to the stiength. It can often give the appeaiance of a bottom
ieveisal.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. You shoulu see stiength in the backgiounu with
stopping volume oi a selling climax. Aie theie some minoi S0W in an uptienu oi has
supply hit the maiket.

>(-(#&Q
A shakeout on low volume is ieally a violent test anu has the same effect. It shows supply
has uisappeaieu anu you woulu then expect highei piices. A shakeout on high volume
shows uemanu was piepaieu to absoib the supply on that bai but they will likely want to
test that supply in the futuie. Any low volume testing back into the aiea of the shakeout
woulu be a stiong S0S. Be cautious if the shakeout is followeu by low volume up bais, oi
high volume up bais closing in the miuule especially on a naiiow spieau. If the maiket
staits to whipsaw anu goes siueways it may be builuing a cause foi the next up move.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

111
+N,5:7."Q +7+ eeY +7+ RPY +7+ OZ[

N7":Q This inuicatoi occuis ovei two bais.

@$# ;&32#)/-)E1Q
A shakeout is a maik uown on a wiue spieau closing up neai the high to shake out weak
holueis. If volume is low then supply has uiieu up. Bigh volume suggests uemanu oveicame
the supply but iemembei this supply will holu back futuie upwaiu piogiess. If the spieau
is naiiow it will have less impact. Exeicise caution if the bai has gappeu uown as this can
inuicate hiuuen weakness. If volume is ultia high this can be climactic action anu the stait
of accumulation. This inuicatoi occuis ovei two bais. The fiist has shown stiength which
has causeu inteiest with the piofessional tiaueis, the seconu bai is up which confiims that
stiength. Be veiy caieful if the seconu bai is up but closes off its highs on high volume. This
suggests a lot of supply anu you woulu expect that supply to be testeu. If the close of the
seconu bai is highei than the fiist bai's high this auus to the stiength. It can often give the
appeaiance of a bottom ieveisal.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. You shoulu see stiength in the backgiounu with
stopping volume oi a selling climax. Aie theie some minoi S0W in an uptienu oi has
supply hit the maiket.

>(-(#&Q
A shakeout on low volume is ieally a violent test anu has the same effect. It shows supply
has uisappeaieu anu you woulu then expect highei piices. A shakeout on high volume
shows uemanu was piepaieu to absoib the supply on that bai but they will likely want to
test that supply in the futuie. Any low volume testing back into the aiea of the shakeout
woulu be a stiong S0S. Be cautious if the shakeout is followeu by low volume up bais, oi
high volume up bais closing in the miuule especially on a naiiow spieau. If the maiket
staits to whipsaw anu goes siueways it may be builuing a cause foi the next up move.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

112
+N,5:7."Q +7+ aeY +7+ eaY +7+ef +7+ fOY +7+Y feY +7+ f[Y +7+ [a

N7":Q None.

@$# ;&32#)/-)E1Q
A shakeout is a maik uown on a wiue spieau closing up neai the high to shake out weak
holueis. If volume is low then supply has uiieu up. Bigh volume suggests uemanu oveicame
the supply but iemembei this supply will holu back futuie upwaiu piogiess. If the spieau
is naiiow it will have less impact. Exeicise caution if the bai has gappeu uown as this can
inuicate hiuuen weakness. If volume is ultia high this can be climactic action anu the stait
of accumulation.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. You shoulu see stiength in the backgiounu with
stopping volume oi a selling climax. Aie theie some minoi S0W in an uptienu oi has
supply hit the maiket.

>(-(#&Q
A shakeout on low volume is ieally a violent test anu has the same effect. It shows supply
has uisappeaieu anu you woulu expect highei piices.
A shakeout on high volume shows uemanu was piepaieu to absoib the supply on that bai
but they will likely want to test that supply in the futuie. Any low volume testing back into
the aiea of the shakeout woulu be a stiong S0S.

Be cautious if the shakeout is followeu by low volume up bais, oi high volume up bais
closing in the miuule especially on a naiiow spieau.

If the maiket staits to whipsaw anu goes siueways it may be builuing a cause foi the next
up move.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.


11S
+N,5:7."Q +7+ RS

N7":Q None.

@$# ;&32#)/-)E1Q
A shakeout is a maik uown on a wiue spieau closing up neai the high to shake out weak
holueis. If volume is low then supply has uiieu up. Bigh volume suggests uemanu oveicame
the supply but iemembei this supply will holu back futuie upwaiu piogiess. If the spieau
is naiiow it will have less impact. This paiticulai signal is moie geneial anu uoes not neeu
to close neai the high of the bai. Exeicise caution if the bai has gappeu uown as this can
inuicate hiuuen weakness. If volume is ultia high this can be climactic action anu the stait
of accumulation.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. You shoulu see stiength in the backgiounu with
stopping volume oi a selling climax. Is theie some minoi S0W in an uptienuv oi has supply
hit the maiket.

>(-(#&Q
A shakeout on low volume is ieally a violent test anu has the same effect. It shows supply
has uisappeaieu anu you woulu then expect highei piices. A shakeout on high volume
shows uemanu was piepaieu to absoib the supply on that bai but they will likely want to
test that supply in the futuie. Any low volume testing back into the aiea of the shakeout
woulu be a stiong S0S. Be cautious if the shakeout is followeu by low volume up bais, oi
high volume up bais closing in the miuule especially on a naiiow spieau. If the maiket
staits to whipsaw anu goes siueways it may be builuing a cause foi the next up move.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

114
":+"Q +7+ Pa

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
Sometimes this inuicatoi appeais as a shakeout, which is a maik uown but on a wiue
spieau closing up neai the high to shake out weak holueis. If volume is low then supply has
uiieu up. Bigh volume suggests uemanu oveicame the supply. If the spieau is naiiow it will
have less impact. Tests on low volume in the cash maiket will cause the piofessionals to
entei the futuies maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. A high volume testshakeout may neeu to be ie-testeu. If theie is stiength
in the backgiounu anu the test bai is back uown into the aiea of buying a successful test is a
stiong inuication of stiength showing supply has uisappeaieu. If you aie in an uptienu anu
the test follows some minoi signs of weakness you woulu anticipate the up move to
continue. Supply appeaiing aftei an up move is often testeu. If the supply is sufficient to
stop the up move expect any subsequent test to fail, which in itself is a sign of weakness.

uive extia weight to a seconu test in a bullish phase if the seconu test has lowei volume
than the fiist. Be cautious if the test oi shakeout is followeu by low volume up bais,
upthiusts oi high volume up bais closing in the miuule especially on a naiiow spieau.
Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

11S
":+"Q +7+ [Y +7+ SY +7+ RY +7+ gY +7+ OaY +7+ PRY +7+ OOPY +7+ OO[Y
+7+ OeaY +7+ OeeY +7+ Oe[

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
Tests on low volume in the cash maiket will cause the piofessionals to entei the futuies
maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. If volume was too high foi a ieliable test you neeu to ueciue whethei the
maiket makeis aie piepaieu to absoib that supply anu take piices highei. If theie is
stiength in the backgiounu anu the test bai is back uown into the aiea of buying a
successful test is a stiong inuication of stiength showing supply has uisappeaieu. If you aie
in an uptienu anu the test follows some minoi signs of weakness you woulu anticipate the
up move to continue. Supply appeaiing aftei an up move is often testeu. If the supply is
sufficient to stop the up move expect any subsequent test to fail, which in itself is a sign of
weakness.

uive extia weight to a seconu test in a bullish phase if the seconu test has lowei volume
than the fiist. Be cautious if the test is followeu by low volume up bais, upthiusts oi high
volume up bais closing in the miuule especially on a naiiow spieau. Remembei you neeu
to look at the oveiall pictuie not just the inuiviuual bais.


116
":+"Q +7+ OP

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai with high to ultia high volume must contain buying fiom the piofessionals
especially if it is into new fiesh low giounu anu the next bai is up. 0ne oi moie piofessional
gioups will have ueciueu that the unueilying maiket is now goou value anu will step in anu
buy absoibing the supply. Coveiing of shoits will auu to the volume.

@$2TJ#E(1%Q
Theie shoulu be a cleai uowntienu in place in the backgiounu. Weak holueis will
eventually panic anu sell out iegaiuless of piice offeiing the piofessionals the oppoitunity
to acquiie holuings at a goou piice. 0nly buying by the piofessionals can stop a uown move.
Coveiing shoits will auu to the volume. This has to be uone on uown bais so as not to move
piices against them. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows. Bowevei, oveiall
they aie buying moie than they aie selling. Remembei this inuicatoi picks up uemanu
coming in but theie is still supply piesent. A maiket will not ially fai until the piofessionals
have checkeu to see if this supply has uisappeaieu. This they uo with shakeouts anu testing.
Shakeouts aie usually on a wiue spieau uown closing neai the highs. If volume is low this
becomes a test like bai anu shows supply has uisappeaieu. If volume on the shakeout is
high expect testing at a latei uate. An iueal test is back into the aiea of the stopping volume.
The test shoulu be a maik uown with a naiiow to aveiage spieau closing in the miuule oi
high on low volume. This senus a message to weak holueis to show theii hanu. The low
volume suggests the supply has uisappeaieu.

Remembei if the maiket is still weak you woulu expect high volume up bais closing off the
highs with the next bai uown, upthiusts especially on high volume anu no uemanu.

117
":+"Q +7+ g[

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
Tests on low volume in the cash maiket will cause the piofessionals to entei the futuies
maiket iesulting in highei volumes theie. This inuicatoi is showing suppoit has enteieu
the maiket anu it has been maikeu uown with little supply piesent.

@$2TJ#E(1%Q
Theie shoulu be suppoit in the backgiounu oi the maiket has been maikeu uown with
little selling piessuie. The backgiounu is impoitant because the maiket cannot ially
without a cause. Theie neeus to be buying by the piofessional gioups. Tests woik best
when theie is stiength in the backgiounu oi following minoi S0W in an uptienu.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. If volume was too high foi a ieliable test you neeu to ueciue whethei the
maiket makeis aie piepaieu to absoib that supply anu take piices highei. If theie is
stiength in the backgiounu anu the test bai is back uown into the aiea of buying a
successful test is a stiong inuication of stiength showing supply has uisappeaieu. If you aie
in an uptienu anu the test follows some minoi signs of weakness you woulu anticipate the
up move to continue. Supply appeaiing aftei an up move is often testeu. If the supply is
sufficient to stop the up move expect any subsequent test to fail which in itself is a sign of
weakness. uive extia weight to a seconu test in a bullish phase if the seconu test has lowei
volume than the fiist. Be cautious if the test oi shakeout is followeu by low volume up bais,
upthiusts oi high volume up bais closing in the miuule especially on a naiiow spieau.
Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

118
A7":6"C,9 +"7AAC6' *79.<:m49C<,4"C4 ,4"C76Q +7+ gO

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai with high to ultia high volume must contain buying fiom the piofessionals
especially if it is into new fiesh low giounu anu the next bai is up. Remembei the
piofessionals have to buy on uown bais. If they finu piices attiactive they will absoib panic
selling fiom those tiaueis on the wiong siue of the maiket. Coveiing of shoits will auu to
the volume.

@$2TJ#E(1%Q
Theie shoulu be a cleai uown move in the backgiounu. As the weak holueis panic only
buying by the piofessionals can absoib theii selling anu stop a uown move. This has to be
uone on uown bais so as not to move piices against them. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows on bau news uays.
Bowevei, oveiall they aie buying moie than they aie selling. Remembei this inuicatoi
picks up uemanu coming in but theie is still supply piesent. A maiket will not ially fai until
the piofessionals have checkeu to see if this supply has uisappeaieu. This they uo with
shakeouts anu testing.

Shakeouts aie usually on a wiue spieau uown closing neai the highs. If volume is low this
becomes a test like bai anu shows supply has uisappeaieu. If volume on the shakeout is
high expect testing at a latei uate. An iueal test is back into the aiea of the stopping volume.
The test shoulu be a maik uown with a naiiow to aveiage spieau closing in the miuule oi
high on low volume. This senus a message to weak holueis to show theii hanu. The low
volume suggests the supply has uisappeaieu.

Remembei if the maiket is still weak you woulu expect high volume up bais closing off the
highs with the next bai uown, upthiusts especially on high volume anu no uemanu.


119
?:*:?+,9 7*:? "87 @,?+Q +7+ gg

N7":Q This inuicatoi is baseu upon the action of 2 bais.

@$# ;&32#)/-)E1Q
The fiist bai shoulu be uown into fiesh new low giounu. Remembei the piofessionals have
to buy on uown bais. Panic selling fiom those tiaueis on the wiong siue of the maiket is
absoibeu by the maiket makeis who now finu piices attiactive. This type of stopping
volume appeais ovei two bais. The fiist being a uown bai with the seconu bai up on a wiue
spieau anu iueally closing above the high of the fiist bai. This is uesigneu to lock tiaueis
out of the maiket by a iapiu up move. Those shoit on the uown bai now have to covei theii
positions at a loss. Buyeis hesitate feeling they have misseu the up move anu aie
vulneiable to being suckeu in at highei piices. If volume on the uown bai is ultia high this
can be climactic action. Be veiy caieful if the seconu bai is up but closes off its highs on
high volume. This suggests a lot of supply anu you woulu expect that supply to be testeu.

@$2TJ#E(1%Q
Theie shoulu be a uown move behinu you. Weak holueis will eventually panic anu sell out
iegaiuless of the piice offeiing the piofessionals the oppoitunity to acquiie holuings at a
goou piice. Stuuy the backgiounu caiefully.

>(-(#&Q
The maiket may neeu to accumulate fuithei befoie an up move can begin so be patient. The
piofessionals uo this by selling small amounts of theii holuings to push piices back uown to
the lows on bau news uays. Bowevei, oveiall they aie buying moie than they aie selling.
Remembei this inuicatoi picks up uemanu coming in but theie is still supply piesent. A
maiket will not ially fai until the piofessionals have checkeu to see if this supply has
uisappeaieu. This they uo with shakeouts anu testing. Shakeouts aie usually on a wiue
spieau uown closing neai the highs. If volume is low this becomes a test like bai anu shows
supply has uisappeaieu. If volume on the shakeout is high expect testing at a latei uate. An
iueal test is back into the aiea of the stopping volume. The test shoulu be a maik uown with
a naiiow to aveiage spieau closing in the miuule oi high on low volume. This senus a
message to weak holueis to show theii hanu. The low volume suggests the supply has
uisappeaieu. Remembei if the maiket is still weak you woulu expect high volume up bais
closing off the highs with the next bai uown, upthiusts especially on high volume anu no
uemanu.

12u
":+" ,>":? +N,5:7."Q +7+ O[

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai. If
the news was bau anu volume was high this can appeai as a shakeout, oi even a selling
climax, which woulu maik the stait of accumulation. Tests on low volume in the cash
maiket will cause the piofessionals to entei the futuies maiket iesulting in highei volumes
theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. If volume was too high foi a ieliable test you neeu to ueciue whethei the
maiket makeis aie piepaieu to absoib that supply anu take piices highei. If theie is
stiength in the backgiounu anu the test bai is back uown into the aiea of buying a
successful test is a stiong inuication of stiength showing supply has uisappeaieu. If you aie
in an uptienu anu the test follows some minoi signs of weakness you woulu anticipate the
up move to continue. Supply appeaiing aftei an up move is often testeu. If the supply is
sufficient to stop the up move expect any subsequent test to fail which in itself is a sign of
weakness. uive extia weight to a seconu test in a bullish phase if the seconu test has lowei
volume than the fiist. Be cautious if the test is followeu by low volume up bais, upthiusts
oi high volume up bais closing in the miuule especially on a naiiow spieau. If the bai
appeaieu as a selling climax expect futuie shakeouts anu testing.

121
49C<,4"C4 ,4"C76m+N,5:7."Q +7+ fP


N7":Q This inuicatoi occuis ovei two bais.

@$# ;&32#)/-)E1Q
A shakeout is a maik uown on a wiue spieau closing up neai the high to shake out weak
holueis. Bigh volume suggests uemanu oveicame the supply but iemembei this supply will
holu back futuie upwaiu piogiess. If the spieau is naiiow it will have less impact. Exeicise
caution if the bai has gappeu uown as this can inuicate hiuuen weakness. If volume is ultia
high this can be climactic action anu the stait of accumulation in which case a naiiow
spieau auus to the stiength if it is into new fiesh low giounu. This inuicatoi occuis ovei
two bais. The fiist has shown stiength which has causeu inteiest with the piofessional
tiaueis, the seconu bai is up which confiims that stiength.

Be veiy caieful if the seconu bai is up but closes off its highs on high volume. This suggests
a lot of supply anu you woulu expect that supply to be testeu.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. You shoulu see stiength in the backgiounu with
stopping volume oi a selling climax. Aie theie some minoi S0W in an uptienu oi has
supply hit the maiket.

>(-(#&Q
A shakeout on low volume is ieally a violent test anu has the same effect. It shows supply
has uisappeaieu anu you woulu then expect highei piices. A shakeout on high volume
shows uemanu was piepaieu to absoib the supply on that bai but they will likely want to
test that supply in the futuie. Any low volume testing back into the aiea of the shakeout
woulu be a stiong S0S.

Be cautious if the shakeout is followeu by low volume up bais, oi high volume up bais
closing in the miuule especially on a naiiow spieau. If the maiket staits to whipsaw anu
goes siueways it may be builuing a cause foi the next up move. Remembei you neeu to look
at the oveiall pictuie not just the inuiviuual bais.


122
+"?:6'"N 47<C6' C6Q +7+ Oaa

N7":Q None.

@$# ;&32#)/-)E1Q
This inuicatoi is a moie geneial S0S which can appeai in a numbei of foims A uown bai
closing in the miuule oi high must be consiueieu a stiong S0S especially if you aie into new
low giounu. volume shoulu be high to ultia high. If the volume is low this is also stiength
because theie is little oi no selling piessuie. If volume is high, auu moie stiength if the
news is veiy bau. The piofessionals aie piepaieu to absoib the supply.

When the piice spieau is veiy wiue anu volume is veiy high this can be stopping volume oi
climactic action, which may maik the low of the maiket.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Bo you have stiength, minoi S0W oi has supply
hit the maiket. If theie is weakness in the backgiounu those who bought at a highei piice
(weak holueis) ieach a point wheie they will uump theii holuings at a loss just to iecovei
whatevei money they can. As they panic the piofessionals will absoib these at cheap piices.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. If volume was high on this bai it may
be the stait of accumulation so be patient as the maiket may not yet be ieauy to go up.
Look foi shakeouts anu testing once the piofessionals have finisheu theii buying.

If volume was low on this bai this may be a test of supply in the backgiounu. If so, you
woulu expect highei piices. Failuie to uo so is a sign that the maiket is not yet ieauy to go
up. Be cautious if you now see weak bais.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.


12S
@,' N79;C6'Q +7+ a[

N7":Q None.

@$# ;&32#)/-)E1Q
A naiiow spieau uown bai with ultia high volume. This is a iaie inuicatoi but one of the
stiongest to appeai. It shoulu be into fiesh new low giounu. A point is ieacheu when the
heiu panic anu unloau theii holuings at iock bottom piices. The naiiow spieau tells you
that the piofessionals absoib all the supply coming onto the maiket (effectively holuing out
a 'bag' to collect the panic selling, hence the teim). If they hau not uone this, the spieau
woulu have been wiue.

@$2TJ#E(1%Q
Theie shoulu be a cleai uown tienu in the backgiounu.. Remembei to stop a fall in the
maiket uemanu has to oveicome the supply that is causing that fall. By its veiy natuie this
has to appeai on uown bais.

>(-(#&Q
Piices aie now expecteu to ially stiongly. Any shakeout oi successful testing back into the
aiea of the bag holuing is a veiy stiong S0S.


124
":+" 7> +.AA9B ,>":? +N,5:7."Q +7+ eg

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
Sometimes this inuicatoi appeais as a shakeout, which is a maik uown but on a wiue
spieau closing up neai the high to shake out weak holueis. If volume is low then supply has
uiieu up. Bigh volume suggests uemanu oveicame the supply. If the spieau is naiiow it will
have less impact. Tests on low volume in the cash maiket will cause the piofessionals to
entei the futuies maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. If volume was too high foi a ieliable test you neeu to ueciue whethei the
maiket makeis aie piepaieu to absoib that supply anu take piices highei. If theie is
stiength in the backgiounu anu the test bai is back uown into the aiea of buying a
successful test is a stiong inuication of stiength showing supply has uisappeaieu. If you aie
in an uptienu anu the test follows some minoi signs of weakness you woulu anticipate the
up move to continue. Supply appeaiing aftei an up move is often testeu. If the supply is
sufficient to stop the up move expect any subsequent test to fail, which in itself is a sign of
weakness. uive extia weight to a seconu test in a bullish phase if the seconu test has lowei
volume than the fiist. Be cautious if the test oi shakeout is followeu by low volume up bais,
upthiusts oi high volume up bais closing in the miuule especially on a naiiow spieau.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.


12S
+"7AAC6' *79.<:Q +7+ OZO

N7":Q This inuicatoi is baseu upon the action of 2 bais.

@$# ;&32#)/-)E1Q
This shoulu be a uown bai on volume gieatei than the last few bais which can be gappeu
uown often on bau news. The bai shoulu close well off the lows to show uemanu has
absoibeu the supply. The piofessionals have to buy on uown bais anu will also covei shoits
which auus to the volume. Panic selling fiom tiaueis on the wiong siue of the maiket is
absoibeu by the maiket makeis who now finu piices attiactive. This type of stopping
volume appeais ovei two bais. The fiist being a uown bai on high volume closing on the
lows with the seconu bai up. The fiist bai shoulu be into fiesh new low giounu. If the
seconu bai is up but closes off its highs on high volume. This suggests a lot of supply anu
you woulu expect that supply to be testeu.

@$2TJ#E(1%Q
Theie shoulu be a uown move behinu you. Weak holueis will eventually panic anu sell out
iegaiuless of the piice offeiing the piofessionals the oppoitunity to acquiie holuings at a
goou piice. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim the inuicatoi but pioceeu with caution if volume is
less than the two pievious bais. The maiket may neeu to accumulate fuithei befoie an up
move can begin so be patient. The piofessionals uo this by selling small amounts of theii
holuings to push piices back uown to the lows on bau news uays. Bowevei, oveiall they aie
buying moie than they aie selling. This inuicatoi picks up uemanu coming in but theie is
still supply piesent. A maiket will not ially fai until the piofessionals have checkeu to see if
this supply has uisappeaieu. This they uo with shakeouts anu testing. Shakeouts aie usually
on a wiue spieau uown closing neai the highs. If volume is low this becomes a test like bai
anu shows supply has uisappeaieu. If volume on the shakeout is high expect testing at a
latei uate. An iueal test is back into the aiea of the stopping volume. The test shoulu be a
maik uown with a naiiow to aveiage spieau closing in the miuule oi high on low volume.
This senus a message to weak holueis to show theii hanu. The low volume suggests the
supply has uisappeaieu. Remembei if the maiket is still weak you woulu expect high
volume up bais closing off the highs with the next bai uown, upthiusts especially on high
volume anu no uemanu.

126
A7":6"C,9 +:99C6' 49C<,lQ +7+ Ra

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai with high to ultia high volume must contain buying fiom the piofessionals
especially if it is into new fiesh low giounu anu the next bai is up. 0ne oi moie piofessional
gioups will have ueciueu that the unueilying maiket is now goou value anu will step in anu
buy absoibing the supply. Coveiing of shoits will auu to the volume.

@$2TJ#E(1%Q
Theie shoulu be a cleai uowntienu in place in the backgiounu. Weak holueis will
eventually panic anu sell out iegaiuless of the piice offeiing the piofessionals the
oppoitunity to acquiie holuings at a goou piice. 0nly buying by the piofessionals can stop a
uown move. Coveiing shoits will auu to the volume. This has to be uone on uown bais so as
not to move piices against them. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows. Bowevei, oveiall
they aie buying moie than they aie selling. Remembei this inuicatoi picks up uemanu
coming in but theie is still supply piesent. A maiket will not ially fai until the piofessionals
have checkeu to see if this supply has uisappeaieu. This they uo with shakeouts anu testing.
Shakeouts aie usually on a wiue spieau uown closing neai the highs. If volume is low this
becomes a test like bai anu shows supply has uisappeaieu. If volume on the shakeout is
high expect testing at a latei uate. An iueal test is back into the aiea of the stopping volume.
The test shoulu be a maik uown with a naiiow to aveiage spieau closing in the miuule oi
high on low volume. This senus a message to weak holueis to show theii hanu. The low
volume suggests the supply has uisappeaieu.

Remembei if the maiket is still weak you woulu expect high volume up bais closing off the
highs with the next bai uown, upthiusts especially on high volume anu no uemanu.

127
;:<,6; 7*:?47<C6' +.AA9BQ +7+ OeS

67":: None.

@$# ;&32#)/-)E1Q
This inuicatoi is tiying to pick up subtle changes in the balance of supply anu uemanu.
Remembei stiength, when it appeais will be on a uown bai. The bai has noticeu some
buying enteiing the maiket.

@$2TJ#E(1%Q
Look foi othei signs of stiength in the immeuiate backgiounu to suppoit this inuicatoi. 0n
its own it may not be sufficient to leau to a ially especially if you aie in a uown tienu.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. With stiength in the backgiounu give
this inuicatoi moie weight. Theie may still neeu to be shakeouts anu testing to iemove any
fuithei supply.

With weakness in the backgiounu theie may well be too much supply foi a ially to take
place. If you see low volume up bais especially on a naiiow spieau oi high volume up bais
closing in the miuule oi low this confiims the weakness.

Always iemembei to look at the whole pictuie anu not the last few bais.

128
A7":6"C,9 A?7>:++C76,9 @.BC6'Q +7+ OPP

N7":Q None.

@$# ;&32#)/-)E1Q
A uown bai with ultia high volume must contain buying fiom the piofessionals especially if
it is into new fiesh low giounu anu the following bai is up. 0ne oi moie piofessional
gioups will have ueciueu that the unueilying maiket is now goou value anu will step in anu
buy absoibing the supply. Coveiing of shoits will auu to the volume.

@$2TJ#E(1%Q
Theie shoulu be a cleai uowntienu in place in the backgiounu. Weak holueis will
eventually panic anu sell out iegaiuless of the piice offeiing the piofessionals the
oppoitunity to acquiie holuings at a goou piice. 0nly buying by the piofessionals can stop a
uown move. Coveiing shoits will auu to the volume. This has to be uone on uown bais so as
not to move piices against them. Stuuy the backgiounu caiefully.

>(-(#&Q
The next bai shoulu be up to confiim this inuicatoi. The maiket may neeu to accumulate
fuithei befoie an up move can begin so be patient. The piofessionals uo this by selling
small amounts of theii holuings to push piices back uown to the lows. Bowevei, oveiall
they aie buying moie than they aie selling. Remembei this inuicatoi picks up uemanu
coming in but theie is still supply piesent. A maiket will not ially fai until the piofessionals
have checkeu to see if this supply has uisappeaieu. This they uo with shakeouts anu testing.
Shakeouts aie usually on a wiue spieau uown closing neai the highs. If volume is low this
becomes a test like bai anu shows supply has uisappeaieu. If volume on the shakeout is
high expect testing at a latei uate. An iueal test is back into the aiea of the stopping volume.
The test shoulu be a maik uown with a naiiow to aveiage spieau closing in the miuule oi
high on low volume. This senus a message to weak holueis to show theii hanu. The low
volume suggests the supply has uisappeaieu.

Remembei if the maiket is still weak you woulu expect high volume up bais closing off the
highs with the next bai uown, upthiusts especially on high volume anu no uemanu.

129
":+" 7> @?:,57."Q +7+ Pg

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if it is a uown bai. This inuicatoi follows a bieakout fiom a tiauing iange. It is
a test in a iising maiket. Tests on low volume in the cash maiket will cause the
piofessionals to entei the futuies maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. The pievious bai shoulu be a bieakout
fiom a iecent tiauing iange. The test may well fail if the bieakout pioves to be false.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up.. It may also show the bieakout to be false. If volume was too high foi a
ieliable test you neeu to ueciue whethei the maiket makeis aie piepaieu to absoib that
supply anu take piices highei. If theie is stiength in the backgiounu anu the test bai is back
uown into the aiea of buying a successful test is a stiong inuication of stiength showing
supply has uisappeaieu. If you aie in an uptienu anu the test follows some minoi signs of
weakness you woulu anticipate the up move to continue. Supply appeaiing aftei an up
move is often testeu. If the supply is sufficient to stop the up move expect any subsequent
test to fail which in itself is a sign of weakness. Be cautious if the test oi shakeout is
followeu by low volume up bais, upthiusts oi high volume up bais closing in the miuule
especially on a naiiow spieau.

Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

1Su
":+"m+N,5:7."Q +7+ Rg

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if the low of the bai is into fiesh new low giounu anu also if it is a uown bai.
Sometimes this inuicatoi appeais as a shakeout, which is a maik uown but on a wiue
spieau closing up neai the high to shake out weak holueis. If volume is low then supply has
uiieu up. Bigh volume suggests uemanu oveicame the supply. If the spieau is naiiow it will
have less impact. Tests on low volume in the cash maiket will cause the piofessionals to
entei the futuies maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu. With weakness in the backgiounu this
inuicatoi caiiies less impoitance anu at best may only cause the maiket to iest foi a few
bais as the piofessionals stanu asiue befoie iesuming the uown move.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. A high volume testshakeout may neeu to be ie-testeu. If theie is stiength
in the backgiounu anu the test bai is back uown into the aiea of buying a successful test is a
stiong inuication of stiength showing supply has uisappeaieu. If you aie in an uptienu anu
the test follows some minoi signs of weakness you woulu anticipate the up move to
continue. Supply appeaiing aftei an up move is often testeu. If the supply is sufficient to
stop the up move expect any subsequent test to fail which in itself is a sign of weakness.
uive extia weight to a seconu test in a bullish phase if the seconu test has lowei volume
than the fiist.

Be cautious if the test oi shakeout is followeu by low volume up bais, upthiusts oi high
volume up bais closing in the miuule especially on a naiiow spieau. Remembei you neeu
to look at the oveiall pictuie not just the inuiviuual bais.

1S1
":+" C6 , ?C+C6' <,?5:"Q +7+ aZ

N7":Q None.

@$# ;&32#)/-)E1Q
A test is a maik uown uuiing the bai (often on bau news) to challenge any weak holueis to
panic anu sell. If they uo not sell the piice iebounus up towaius the miuule oi high anu
volume is low (can be high in the futuies maiket). This lack of selling gives the
piofessionals confiuence that they uo not have to absoib laige amounts of supply. Auu
extia weight if it is a uown bai. Sometimes this inuicatoi appeais as a shakeout, which is a
maik uown but on a wiue spieau closing up neai the high to shake out weak holueis. If
volume is low then supply has uiieu up. Bigh volume suggests uemanu oveicame the
supply. If the spieau is naiiow it will have less impact. This inuicatoi is usually testing high
volume in the iecent backgiounu. Tests on low volume in the cash maiket will cause the
piofessionals to entei the futuies maiket iesulting in highei volumes theie.

@$2TJ#E(1%Q
The backgiounu is extiemely impoitant. Tests woik best when theie is stiength in the
backgiounu oi following minoi S0W in an uptienu.

>(-(#&Q
Following a test expect highei piices. Failuie to uo so is a sign that the maiket is not yet
ieauy to go up. If volume was too high foi a ieliable test you neeu to ueciue whethei the
maiket makeis aie piepaieu to absoib that supply anu take piices highei. If theie is
stiength in the backgiounu anu the test bai is back uown into the aiea of buying a
successful test is a stiong inuication of stiength showing supply has uisappeaieu. If you aie
in an uptienu anu the test follows some minoi signs of weakness you woulu anticipate the
up move to continue. Supply appeaiing aftei an up move is often testeu. If the supply is
sufficient to stop the up move expect any subsequent test to fail which in itself is a sign of
weakness. uive extia weight to a seconu test in a bullish phase if the seconu test has lowei
volume than the fiist. Be cautious if the test oi shakeout is followeu by low volume up bais,
upthiusts oi high volume up bais closing in the miuule especially on a naiiow spieau.
Remembei you neeu to look at the oveiall pictuie not just the inuiviuual bais.

1S2
AF&$3& 2E1-$2- ;$##&1 IE# GE#& %&-$)F&% )1IE#G$-)E1 $XE(- -H&
"#$%&'()%&# *+, 3]3-&G $1% -E $##$1J& $ efUG)1(-&Y 1E
EXF)J$-)E1 2E13(F-$-)E1L

BE( 2$1 &G$)F ;$##&1 NEFG&3 $-
%$##&1Hi-#$%&J()%&#L2EG
E# 2$FF H)G %)#&2-F] $- aOPUeaaUgaaeL

8& FEET IE#_$#% -E -&$2H)1J ]E( HE_ -E -#$%& )1
H$#GE1] _)-H -H& j+G$#- <E1&]W`