June Oil

Discussion in 'Energy Futures' started by hcour, May 10, 2005.

  1. hcour

    hcour Guest

    Posted on the Yahoo SMI-Wyckoff board, I thought some on this board might find it interesting. Everybody has their own terminology, most of this is obvious: BC is Buying Climax, AR is the Automatic Reaction which follows. The BC and AR form the boundaries of the Trading-Range, TR. The ST is the Secondary Test of the BC, which confirms that it is indeed the end of the uptrend for now, at least. In this case it is also an UT, Upthrust of the previous high. The SOW is a Sign of Weakness (following the establishment of the TR) which breaks the TR decisively on strong vol and wide spreads closing on the lows, as we have here, showing that supply has overtaken demand. The LPSY is the Last Point of Supply, the backup to the TR that so often occurs. We also pay particular attention to the depth of the retracements as normal (50%), shallow, or deep, similar to Fibs. So here's my Wyckoff analysis for those interested:



    June Oil appears to continue to struggle w/supply.

    On the daily chart, coming off the BC/AR/ST-UT, the reaction 4/04-4/18 is sharp on strong vol, a possible SOW that breaks the trading-range support, retracing 62% of the whole 2/08-4/04 rally.

    4/18-4/22 rally retraces 62% of that previous reaction on the backup on relatively narrower spreads and lower, contracting vol, a possible LPSY. Then 4/27 supply on the widest spread on the chart, closing on the low on good relative vol, breaking the trading-range support again most decisively and the last 3 bars wipe out most of the previous rally. The next day a good spread closing on the high on strong vol, a possible spring of the 4/18 low, but it does not follow-thru as the next day reverses it, but on low vol and then price finds support at the Jan highs. Here price basically goes sideways as there is no immediate demand off the support.

    5/04 vol comes in on a good spread but the close is well off the high, then 5/05 vol is low and price can't make a new high. 5/06 rallies to exactly the 50% retracement on a good spread and strong vol, but closes below mid-range on nada price gain; lots of effort w/little result on this bar. Yesterday closes well and appears to show some demand, but price is struggling mightily to get back to the channel supply line and the AR/trading-range low, also at the 4/27 EOM bar.

    On the wkly chart, the wk of 4/29 is the widest spread in 5 months, closing on the low. Last wk 5/06 a narrow spread, closing well-off the high and little price gain on equal vol.

    SMI-Wyckoff board:


  2. sounds like bullshyt to me...........

    Wycoff forgot the POP ...Point of Panic and OHCICGO...Oh Holy Crap I Can't Get Out.....chart formations

    which could be useful tonite based on CL tick chart
  3. Harold, I lurked and enjoyed your soybeans analysis. Might I ask what the best source of Wyckoff analysis is? Is there a standard text?

  4. hcour

    hcour Guest


    Actually this is the July chart, as liquidity moves into this contract. (Bottom pane is total OI & Vol.)

    Following the rally to 5/10, which closes near the low and is a shallow backup into the trading-range and 50% retracement of the previous reaction, unable to get back to the channel supply line, there is a sharp reaction 5/11 & 5/12, those 2 days wiping out the previous 5 days. Note the convergence of the 20d & 50d ma's resistance here as they make a bearish cross.

    5/12 a big gap down on strong vol, undercutting the previous low. Here price hesitates 5/13 & 5/16 on bars closing near their highs, filling the 2/22 gap, but note the low vol and lack of price progress - no demand at support. 5/17 an up day on higher vol trying to get back to the bottom of that gap. (Note the dip in OI on this little rally attempt.)

    But price can't even begin to fill the gap as Wed a wide spread closing on the low on increased, relatively strong vol, back to that s/r, suggesting supply continues to be in control.

  5. hcour

    hcour Guest

    Hi Jason,

    Actually, that's kind of hard to answer, as the best source, the "standard text", is the SMI Wyckoff course, written by W hisself in the 1920's & '30's, and the subsequent SMI tapes made by his very best students in the 50's, 60's, & 70's. The course is extensive but expensive. I couldn't recommend buying it unless one is first assured that the Wyckoff method is the way they wish to go and they are willing to commit to the course, as it covers a lot of material in depth and is real work. If so, it beats everything out there, in moi's biased opinion, because it covers basic Wyckoff market dynamics of Supply & Demand, Cause & Effect, and Effort vs Result. Once one understands these principles you can adapt them to pretty much any discretionary method - patterns, candlesticks, EW, Fibs, what have you. But the best W is the purest - Price and Volume - along w/basics like trend & trading-ranges & climaxes, s/r, retracements, volatility...

    First, I'd suggestion you join the Yahoo SMI-Wykcoff group I linked in the first post in this thread. (And if you do so, please ignore the bickering in the group the last few weeks, I can assure you this is actually completely out of character for this group, as we are quite open-minded, because Wyckoff is so fundamental and can be applied in so many ways. We're getting back to normal now, discussing and interpreting charts, the really good stuff.) There is a wealth of info in the Files section, as well as in posts, especially by members David Weis, Cofferspeculator, Pete_cm, Harmone, and Michael B. There are other talented members, but they don't post as much, and most of the rest of us are struggling along.

    Secondly, buy the book "Charting the Stock Market: The Wyckoff Method", edited by Jack Hutson of TASC magazine, it's dirt cheap. The first section of the book is not as clear an outline of the method as it should be, but you should be able to get the gist, especially if you're at all familiar w/basic TA, like patterns and S/R, and climaxes, ect. The 2nd section of the book is practically a bar-by-bar pv analysis of the bond market by David Weis, a member and regular contributor to the Yahoo group. I first read this a few yrs ago and it's what got me hooked on Wyckoff, it's as pure and simple an interpretation of pv that you'll ever find. David also has quite a few chart analyses in the File section; the man is brilliant, im(very)ho. If you like this section of the book, then W may indeed be your cup of tea.

    Btw, the course can be bought in sections, the main being Units 1 & 2, but they will still cost you a chunk of change. Obviously, I think they're invaluable, so you'll have to some research and decide for your own-self.

  6. Thank you for the information. I joined up over at Yahoo.