Wyckoff trading method, page-522

OK back to business.....




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S. Potential Upthrust Bar - with price gapping up at open through the resistance zone. Volume was excessive and significant supply entered forcing the price back down. The sheer amount of overwhelming supply resulted in price closing lower than its open, despite it trading at higher levels during the day.

S- Arrowed
This bar gapped up, with an increased spread and volume, but with a poor close.
yes, individually this bar needs to be considered as a possible upthrust.....or at least some potential weakness coming in.
However, it would probably be an upthrust 'in the wrong place' (sort of like bar 'B' ), so the thought and the previous explanation of bar 'B' need to be considered, that it may be a potential absorption bar, initially buying the supply above, then reducing the support and allowing it to close low.
The next bar will generally answer the question, a down bar would suggest some weakness has come in, and an upbar would suggest it was a potential  absorption bar.

T. A narrow range bar on slightly above average volume where the open and close price were the same. Neither Buyers and Sellers could gain an upper hand. The next bar gave some indication of potential future direction however, as there was some accumulation on this bar. At some stage however it was met by supply when it hit the overhead supply zone (resistance) and then retracted. Volume was above average.

T- A little upbar on reduced volume, which helps to confirm the absorption bar theory of bar 'S'
In some respect this bar looks a bit like "no demand", but it would generally be no demand in the wrong place, similar to the potential upthrusts of bars B & S.

The next bar also moves higher in a similar fashion (solidifying the confirmation of the upthrust/absorption bar), and is also suggesting it is potentially absorbing supply.

U. Price was able to push through that potential resistance zone on massive volume. This was suggesting that potential weakness was re-entering. Still it was a solid trading day with price up 22%. Many retailers would have been caught here, thinking that price would continue to rise, however as the CO could see the buy sell orders, he/she knew the probable price direction so was selling into the buying frenzy. It was here where the stock was transferred from the Strong Holders to the Weaker. The new closing price enabled us to create a new horizontal line that again would assist us to interpret future price and volume behaviour as it neared it.

U- (marked) gaps up from the previous close, with a wide spread, an increase in volume, and a close which is a bit off the highs.
Price accelerates higher and above the high of bar A. It also moves above, and also closes above the longer term line on my chart @3.7cps.
These last three bars on slowly increasing spreads and volume have finally taken out the supply which overwhelmed price beginning from bar A
However, price will need to consolidate this new level of 3.7cps now

Where the 3.7cps level comes from - weekly chart
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cheers