Wyckoff trading method, page-517

G. Price breaks down as sellers now completely overwhelm buyers. With prices being driven down to new lows was this a shakeout or similar? We shall see over the next few bars…We can also draw a new horizontal line to the right of the chart with this new low, as perhaps in the near future we can see how price and volume react near it.

G- Arrowed
Granted it does appear that price has broken down, and the sellers may have overwhelmed the buyers.
But the volume is fairly low, and we have established that the chart is probably under a bullish influence.
So the selling was pretty low, and probably not overwhelming.
So yes, I would (tentatively at the time), suggest that this is an attempted shakeout of the supply causing trouble above.
Remember - a shakeout is a potential sign of strength, so a successful shakeout is positive for higher prices.
Also note - they didn't shakeout much supply, so if it was for accumulation purposes (considering there was no 'normal' accumulation at the lows), they didn't get much. And if it was to clear a path above, not much 'fell for it' and continued to hold, and the resistance will still be potentially there.

H. Price has dropped on these two red bars, on falling and lower than average volumes. Perhaps this is the CO again testing to see if there is any remaining supply floating around.

H- Narrow spread downbar, closing in the middle, on low volume....ring a bell......ding ding....haha
attempted test........ (and remember - shakeout plus test, or, test plus shakeout, often equals breakout)

H (a)- you missed this bar on your chart GF
this bar is half no demand, and half no supply, so an indecision bar of sorts


I. With prices finding support over the last couple of bars, we are now faced with a price rise on small volume, respecting support and closing higher. Not sure how this relates to the previous bars except to say perhaps due to the lack of recent demand to drive prices higher it was a brief opportunity for a retailer to buy a few shares.

I- Narrow spread up bar on low volume
this is a 'no demand bar' in the wrong place (should be seen after significant weakness, and/or, in a downtrend to be 'in the right place')
The price action since the potential shakeout also suggests absorption (sort of mopping up any further supply at these levels), as price has not broken down any further, and volume continues to reduce or remain quite low.
Hindsight - perhaps the big boys got wind of what's to come (a trading halt - not shown), and stood aside.


J. No volume recorded perhaps suggests a Trading Halt.

J - Halt (not shown on this chart)

cheers