Today I noticed what may be the beginning of an interesting Wyckoff principle on the Crude Light Futures chart.
When Wyckoff was asked how a change in trend can be determined, he used an example of an up trend changing to a downtrend, and said something like "when the waves of buying reduce in both length (price) and duration (time and volume are usually very similar). And the waves of selling increase in both length and duration, a change in trend may occur".
If you look closely at the Crude chart below, notice the four up waves which have their volume numbers circled in red, all shorten in length and volume as price rises, and also that Friday nights downwave was the longest in length and highest in volume since this current uptrend began.
At this point, there is no confirmation of a change yet, and the last wave is also incomplete so far, so it could shake off any weakness and continue higher again.
Confirmation would come if the next upwave was very short and weak (with quite low volume), preferably one which did not exceed the 391 upwave in height, and price then turned down again, in particular if it closed below the previous pivot - if this occurred, a short position could then be established, with a stop either above the high of the little weak up wave, or above the 391 waves high.
And also note the the exact same mirror image is true for a down trend to change to an uptrend.
The downwaves would be seen to shorten in both length and volume, and the upwaves would begin to lengthen and increase in volume.
cheers
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