When you read the VSA and Wyckoff books from years gone by, they usually claim that an accumulation is done at the lows of a range, like you see in the standard Wyckoff schematic.
Tom Williams also liked to say that "strength, 'when it appears', will be found on a downbar", and here Tom is talking about climactic downbars bars and high volume shakeouts....all of which are expected to be found at the lows of a range.
and for the most part, these statements and understandings are still absolutely true.
However, I do see from time to time, what appears to be the reverse of what these teachings suggest, I don't know if this is just an Australian thing, or if it is some sort of modern adaption or change in tactic.......it is still not part of the official VSA or Wyckoff teaching or understanding That I know of....it is my own adaption, from what I have observed.
I see what appears to be a deliberate action that is something like the inverse of a high volume shakeout.
What seems to happen is that price is initially taken lower for a period, and then after some time (and the 'offer' stack has been reloaded), price is strongly bought UP...effectively buying the entire 'offer' up to a certain level).
I first saw this on BRG, where I had already taken a small position after price had smashed lower on some potentially bad news, and initially I thought price was going to start another leg down (which had me a little worried), but instead of failing again, price was actively bought UP (which is generally against the theory of what is normally taught) . At the time, I initially did not understand what had happened, but I quickly noticed that price did not fail in response to this action, and instead it looked more like it was going through the absorption process, which suggested it was becoming strong. So after a couple of days where I looked at some intraday charts of the event, and thought about it some more, I backed my newly acquired thinking, and opened a couple of really large position myself (in relation to my account size), in both my superannuation account, and both my trading accounts. I was waaaay overweight in BRG at the time.
Since then I have seen similar price action quite a few times....it is still not the most common style of accumulation...but in my head I think of it as a 'reverse accumulation'. It is not something I discuss very much, as it is not officially part of VSA or Wyckoff analysis, and to me, appears to me a modern adaption that is used by a few professionals in certain circumstances where a large position is desired, but either time is against them, or the stock is tightly held and stock cannot be shaken out very easily....or perhaps a combination of both. And not being part of correct VSA or Wyckoff analysis, I cannot back up my observations with what is generally taught to students....so I keep it to myself, as it would be hard to defend if I was challenged.
Hang on for a tick.......and I will see if I can find a daily chart of what happened on BRG at the time, and you will be able to see it.
