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Wyckoff Chart Reading

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The Wyck­off Method is one of the four time­less approaches to mar­ket analy­sis (the other three being Dow The­ory, Shabacker’s chart pat­terns, Elliott Wave The­ory and Gann’s swing trad­ing approach). It was devel­oped in the early part of the 20th Cen­tury and has been con­tin­u­ously refined through the present day. The Wyck­off Method is a vital, clas­sic approach to trad­ing which reads the mar­ket through price bars and vol­ume. Although tech­ni­cal indi­ca­tors may be used, they are unnec­es­sary under the Wyck­off Method.

Richard D. Wyck­off was a Wall Street bro­ker and trader in the early part of the 20th Cen­tury. Wyck­off was a bro­ker and wit­nessed the oper­a­tions of the largest traders of his day first hand as an ‘insider’ and learned to trans­late their activ­i­ties in the ticker tape and bar charts. As he watched traders and investors make poor trad­ing deci­sions based on rumor, opin­ion and guess­work, he wrote a newslet­ter that quickly became so widely read on Wall Street that it would often affect stock prices. He later wrote courses for traders and books on tape read­ing (includ­ing the first day trader’s man­ual) and his expe­ri­ences on the Street.

The Wyck­off Method has been used by astute traders for nearly 80 years. It is a com­plete method for under­stand­ing and trad­ing the mar­kets. It is used effec­tively by day traders, swing traders and investors in all mar­kets includ­ing equi­ties, com­modi­ties, index futures and FX with equal suc­cess. Many of today’s top mar­ket tech­ni­cians acknowl­edge Wyck­off as the basis for their under­stand­ing of the mar­kets, and the Method has spawned spin-offs such as VSA.

Dr. Gary Day­ton is an expert in the Wyck­off Method. He has stud­ied and applied Wyck­off for the past decade and has been men­tored by an acknowl­edged Wyck­off mas­ter. Dr. Gary is also an out­stand­ing edu­ca­tor of the Method who con­veys the Wyck­off Method and prin­ci­ples in a sim­ple and con­cise man­ner eas­ily under­stood by his students.

TABLE OF CONTENTS

Candlestick and Chart Patterns (15 Days)

7 Most Important Candlestick Chart Patterns

Top 2 Bearish Chart Patterns

Top 6 Bullish Chart Patterns

Indicators & Oscillators (12 Days)

Bullish or Bearish Indicators

Bullish or Bearish Oscillators

Classic Chart Patterns (29 Days)

Bearish Classic Chart Patterns

Bullish Classic Chart Patterns

Best Trading Theories (4 Days)

Kind attention: this course is helpful for beginner and intermediate traders. It’s free for everyone. Advanced modules, trading strategies, and data (in-depth) are available for Moneymunch’s premium subscribers.

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The Strongest Market Signal

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The two approaches to market timing—predictive and confirming—almost always give conflicting signals when analyzing movements of the same time domain. That is okay because they are used for different purposes and have different goals. If contrary opinion says that the market has reached bottom over the intermediate term, the other approach—trending indicators for the intermediate term—almost always indicates that the trend is still down. This is normal. Why? Because it is normal that investors become very bearish (furnishing us with buy signals using contrary opinion)as prices are plummeting and at their low. The large price drop makes the trend indicators point down, but the predictive indicators are showing that the end of the decline has been reached, and higher prices are ahead. However, there are times when the two approaches do not give conflicting signals, and these are very important to note. When predictive indicators such as contrary opinion strongly indicate higher prices, and the confirming indicators have already confirmed the start of a slight uptrend, that is the strongest buy signal there is. There is nothing more reliable or important than when this unusual situation happens. Why is this so? It is expected that, as prices move up, more and more investors will become bullish. When, however, the bearish sentiment stays high or even moves higher than prices also move higher, that is not expected, and so it is the sign of a very strong stock market. At these moments, what is happening is that no one believes the upward price movement is real or that it will last. This skepticism is the fuel needed to keep the movement going, usually for some time. The same holds true when both categories of indicators are confirming that prices are declining. If contrary opinion is extremely bullish and stock prices have already started down, so much so that trend-following indicators are confirming the downtrend, there is no more reliable or important sell indicator.

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No takers for IDBI bank’s Minerva theatre which ran Sholay for 5 straight years

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IDBI Bank has a piece of Bollywood’s 100-year-old history, but no one seems to be interested in it. The only one who found it worthwhile is broke and has been ordered to shut down. The plot on which stood the Minerva theater in South Mumbai, known as the Pride of Maharashtra, which crated history by running Amitabh Bachchan-starrer Sholay for five straight years, is now on the books of IDBI Bank. And the lender does not know what to do with it…

The state-run bank recently failed for the third time to sell the plot on Lamington Road, which has the potential to build and sell real estate for 40,000 square feet. That’s as much a surprise as it is a shock in a city where the fight for land can take many twists and turns. If a mouth-watering deal for real estate developers is going with no attention, what’s the catch?

Like an impediment for most other economic activities – it is an archaic law. A rule says that in any piece of land where a theater once stood, there is no other option than building another theatre after razing the old one. “We have not decided what we will do with it,” says RM Malla, chairman and managing director at IDBI Bank. “It has to have a screen. Even a mini screen will do.”

For IDBI, it was funding an exotic idea that went sour.

In 2006, it lent about Rs 40 crore to Neville Tuli, the pioneer of art investing in India, through Osian’s Connoisseur’s Art, to build a theater and an exhibition center named OSIANAMA. The idea was to bring international movie experience to India. Reality did not unfold the way it was forecast to. The economy collapsed, value of assets tumbled and so did the fortune of Osian. All that stands now is a barren land with the once iconic structure pulled down.

Dues rose to Rs 84.8 crore in the period. First, IDBI decided to auction it at Rs 70 crore, that failed. Then, reduced the asking price to Rs 61 crore – still no takers.

Osian’s Connoisseurs of Art is having its own difficulties with the regulator Securities & Exchange Board of India (Sebi), which is directing it to wind up for violating securities laws.

Osian’s “is directed not to access the capital market and is further restrained and prohibited from buying, selling or otherwise dealing in the securities market till its collective investment schemes are wound up and all the monies mobilised through them are refunded to the investors,” the Sebi order said.

Planning a residential tower, along with a multiplex and a retail component, may not be a good idea elsewhere, but won’t find takers in the elitist South Mumbai.

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FinMin makes case for rating upgrade with Fitch

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The finance ministry on Friday made a strong case for rating upgrade of the Indian economy by global agency Fitch Ratings on the back of increasing investments, declining import of gold and the government’s commitment to fiscal prudence.

The issue of rating upgrade was raised by the ministry’s officials at a meeting with the representatives of Fitch in New Delhi. The meeting was attended by Department of Economic Affairs Secretary Arvind Mayaram, among others.

“Fitch raised concerns on how deficits will be met and how the government will be able to meet revenue targets. We said we are confident, gold import is declining and investment in our economy is going to start increasing,” a top  official said.

The official further said the finance ministry also expressed confidence that the current account deficit would come down, as oil prices were stable and the rupee had been range bound.

“The Cabinet Committee on Investment (CCI) has approved projects worth Rs 70,000 crore in three months time. These are infrastructure projects and will have positive impact on cement industry and steel industry,” the official added.

The government had set up CCI, under Prime Minister Manmohan Singh, in December last year to accord fast track clearances to mega projects.

The Ministry officials also impressed upon the rating agency the resolve of the government to follow the path of financial prudence and bring down the fiscal deficit to 3 per cent of GDP by 2016-17.

Finance Minister P Chidambaram in 2013-14 Budget has proposed to bring down the fiscal deficit to 4.8 per cent from 5.2 per cent in 2012-13.

Besides, several reforms initiative like liberalising FDI norms for various other sectors, including multi-brand retail, was undertaken by the government to promote growth and investment.

The government also undertook partial decontrol of diesel and capped subsidised LPG cylinders, in a bid to check the rising subsidy bill.

Another rating agency Standard & Poor’s is scheduled to visit India on April 25.

Both S&P and Fitch had earlier threatened to downgrade India’s credit rating as an aftermath of the expansionary policy which led to a rising fiscal deficit. The fiscal deficit had touched a high of 5.8 per cent in 2011-12.

S&P rates India as ‘BBB-‘, lowest in the investment grade, with a negative outlook. Any further downgrade will push India’s rating to the junk status, making it difficult and costlier for Indian entities to borrow funds overseas.

After lowering India’s credit outlook to negative, Fitch had in August last year said the possibility of downgrading the country’s sovereign rating is more than 50 per cent in the next 12-24 months unless reforms are carried out.

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To Get Rich in Three Easy Steps

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smart-profit-in-stock-marketPeople don’t believe how simple it is to accumulate a significant amount of wealth, but it really is quite easy. All you need is a bit of discipline and to know the three steps necessary anyone can take to grow a significant net worth. The steps are:

1. Spend less than you earn. This is THE key to getting rich. Said another way, save a portion of all you make.

To spend less than you earn, you may need to earn more or spend less.

2. Invest your savings regularly in good, solid investments. I like index funds.

3. Do this for a long time, letting the power of time and compounding work for you.

That’s it.

Yes, it’s that easy.

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How Banks Make Money

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Yes, the government prints our businesses paper money. But thats just a little small fraction of the money in use. Most of the funds in state economies is made when banks write it directly into their customers’ accounts as a result of thin air as bank loans.

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You earn Rs.10,000 and put it in the bank. And then…

 

 

 

 

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The bank keeps RS.1000 in its RBI(Reserve bank of India) account …

 

This is the “reserve,” which the bank uses when customers withdraw funds. As a rule, depositors don’t take out more than 10% of the money they have on deposit on any given day.

 

 

 

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Then loans Susie Rs.9,000, at interest.

 

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Susie deposits the Rs.9,000 in her bank.

That bank keeps 10% (Rs.900) in reserve and loans Joe Rs.8,100, at interest.

 

 

 

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See how it all adds up—for the banks.

You now have Rs,10,000 in your account. Susie has Rs.9,000 in hers. Joe has Rs.8,100. 

There’s now Rs.27,100 total in accounts that you and Susie and Joe can spend, and it all came from your Rs.10,000 deposit. The banks have created an additional Rs17,100 by loaning it into existence.

 

 

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Imagine this money trick over and over.

If you do this operation 50 times, that Rs.10,000 turns into Rs.99500.25—Rs.88500.25 in loans, and your original Rs.10,000.

 

 

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Mad math: If those loans are for one year at 10% interest, the banks will make Rs.8800.53. If they’d only been able to loan your Rs.10,000, they’d make Rs.1000.