Digest: La Methodologie Wyckoff en Profondeur, book pp. 95-146 (shard files p105-p156)

Note: shard file pNNN = printed page NNN-10. Page tags below use the shard file number (pNNN). Terms keep the book's French/English labels. Phase A = stopping the prior trend (PS, SC/BC, AR, ST); Phase B = cause building; Phase C = spring/UTAD test; Phase D = breakout/LPS; Phase E = trend out of range.

1. CONCEPTS

Selling Exhaustion (proposed new event, p105-106): the author proposes it for a down-trend that ends by exhaustion with no climactic point (no SC ever seen). Methodology labels it SC anyway; author says treat it functionally but label analytically. Sign: price makes successive, ever-lower "Potential Preliminary Support" (PS) actions. Volume overall tends to DECLINE; professionals stop selling aggressively and take profit on shorts (absorption). The floor forms without range/volume expansion above the last low.
Buying Climax (BC, p106-107): strong sign of weakness. After uptrend, price driven by good news and uninformed buying makes a rapid rise; informed traders exit longs and start shorting. 2nd event after Preliminary Supply (PS), in Phase A of the prior uptrend. A trap: looks like aggressive buying but all buying is absorbed by resting orders; price cannot rise. Its HIGH defines the top of the structure (resistance). Identical to Preliminary Supply in look and psychology; only difference: PSY/PS fails to stop the uptrend, BC does (at least temporarily). Treat as POTENTIAL until the next two Phase A events (AR and ST) confirm.
Buying Exhaustion (proposed, p108-109): uptrend ending by gradual disappearance of buying, not a climax. Buyers lose interest at high prices and take profits. Candles: normal/narrow range, average/low volume. Sign: successive higher "Potential Preliminary Supply" actions with declining volume (gradual absorption); ceiling develops without range/volume expansion at the last high. Labeled BC in the methodology anyway.
Event 3: Reaction (p110-113): after the potential climax, an automatic reaction leaves a large move in the opposite direction, confirming the climactic event. It is the largest move since the previous trend phase began; shows aggressive opposite entry = ChoCh (Change of Character), ending the prior trend and starting sideways context. Confirmed by the Secondary Test (last Phase A event).
- Automatic Rally (AR) after SC; Automatic Reaction (AR) after BC.
- Distance travelled matters (relative to recent average swing).
- Anatomy: volume large at start (climactic), declining to relatively low at end; ranges wide, strong trend bars at start, narrowing toward end. Drying volume = lack of interest, ends the AR. No mechanical rule: judgment.
- Uses: (a) AR high sets upper range limit (resistance); Automatic Reaction low sets lower limit (support); (b) identifies the true climax (AR identifies the true SC; Automatic Reaction identifies the true BC), often recognised only after the ChoCh; (c) gives market context/map (price will go test the climax = ST); (d) scalp opportunity.
Automatic Rally (p114-115): upward move after SC end, first sign of buyer interest; Phase A, after PS and SC. Why: supply exhaustion (aggressive sellers stop), short covering, new buyers (incl. mean-reversion strategies). SC buyers are likely scalpers who take profit during the AR, ending it.
Automatic Reaction (p116-117): significant down move, first sign of selling interest; Phase A, after PS(upply) and BC. Why: demand exhaustion, long liquidation, new sellers. BC sellers speculate on a quick drop and take profit at the end of the Automatic Reaction.
Secondary Test (ST, Event 4, p118-125): 4th event; ends Phase A (trend stopped), begins Phase B (cause building). Function: confirms the change from trend context to range context; confirms aggressive sellers have abandoned (for accumulation) -> equilibrium.
- Valid ST: move with narrowing ranges and volume LOWER than at the SC. Importance order: decreasing volume, then range narrowing.
- ST above SC low = neutral connotation; in upper half of range = some buyer imbalance; slightly below SC low = imbalance for sellers. Author rejects rigid "must hold above SC low".
- ST in Phase B: tests at either extreme assess strength/weakness. Labels depend on eventual outcome; in real time any label is valid. Think as concept (action) vs event (location). Simple solution: label "ST in B".
- ST at upper extreme: price pierces previous high (of the stopping action) but re-enters range quickly (small shakeout). Initially shows underlying strength (aggressive buyers needed). Later evaluation: absorbed (accumulated) vs distributed. New high can be used as new upper limit to look for effective bullish break (Phase D) or bearish shakeout (Phase C). In accumulation/re-accumulation labelled Upthrust Action (UA); in distribution/redistribution labelled Upthrust (UT). If UA happens and price stays above resistance a while before falling = minor Sign Of Strength (mSOS) (greater resistance).
- ST at lower extreme: new lower low of the structure; due to seller aggression or buyer disinterest; further retests likely. Shows fundamental weakness. In accumulation = Secondary Test as Sign of Weakness (ST as SOW); more likely when the Phase A ST produced a lower low. In distribution/redistribution = minor Sign Of Weakness (mSOW); hint: the Phase A ST was a poor up-move with little displacement (buyer disinterest).
Generic test (VSA, p126-131): a test checks who controls the market. Entering a region of previous high volume: (1) volume now low = lack of interest, market ready to trend in direction of least resistance -> VALID; (2) volume still relatively high -> INVALID: wait for repeated tests until confirmed no stock left, or let market continue in its last direction. Tests can be good entries (bet with the force pressing).
- VSA candle names: No Demand (for sells/weak context) and No Supply (for buys/strong context).
- Difference vs ST: same concept; ST is a specific Wyckoff structural event, the generic test is global (VSA).
Event 5: Secousse (Shakeout/Spring/UT/UTAD, p132-149): the key event; author calls it the most important event in markets. Prerequisites: (1) the prior trend stopped (with or without climactic volume); (2) a significant cause built (Phase B: pro has absorbed stock).
- Zero-sum: every order needs a counterparty; shakeout absorbs orders of uninformed/weak hands by informed/strong hands.
- Behaviour: a break of a prior liquidity zone (many resting orders) that seems directional but is a deception; big players take the resting orders to start the trend they want. Markets move seeking liquidity. Author: for every significant trend a shakeout occurred first.
- Critical analysis factor: how aggressively the key zone is broken and how the market reacts right after.
- Appearance: (a) 1 candle: hammer-type, penetrates liquidity zone and gives back virtually the whole move in the same candle, significant tail (rejection); (b) 2+ candle pattern: same logic over longer time; the longer before reversal/recovery of the broken zone, the weaker the shakeout (shorter = stronger); (c) minor structure: price stays longer in potential-shakeout position; control undefined, so a smaller structure is needed to act as the shakeout of the larger: at a potential Spring look for a smaller accumulation structure producing the up move; at potential UTAD look for a smaller distribution structure producing the down turn.
- Functions: expel breakout traders (the "greedy", incl. algorithms/momentum robots; often high volume); scare out the fearful (long-time losers, stops near); push out the smart (right but early, already stopped at climax or a minor shakeout); success for pros (close positions into the displacement for profit).
Spring (p139-143): abbreviation of "Springboard", from Robert G. Evans, refinement of Wyckoff's Terminal Shakeout. A down move that breaks prior support within an accumulation range, to transfer stock from weak to strong hands. Three types by supply seen at the break:
- Spring #1 / Terminal Shakeout: heavy supply (sudden volume increase, range widening, large penetration of support). Terminal Shakeout = deeper penetration, high volume; Spring = shorter moves with light/moderate volume. Supply in control, extreme weakness; to succeed needs large demand influx pushing price back up with wide ranges and relatively high volume. First hint demand is stepping in: after penetration volume stays high but ranges start to shrink. If demand fails to appear, price keeps falling and a new accumulation zone must be built.
- Spring #2: moderate penetration, volume and ranges both increase. Floating supply exists but less than #1; must be absorbed by pros; successive tests of the area likely.
- Spring #3: supply exhaustion: slight downward break with decreasing volume and narrowing ranges (total disinterest in lower). Very powerful; buy positions can be taken directly.
- Variant: small/minor Spring inside the range limits: indicates greater underlying strength, though pros prefer the shakeout outside the range because it cleans more weak-hand supply.
- Spring failing to break = important sign of strength.
Ordinary Shakeout (p144): strong downward thrust without deep prior preparation occurring DURING an uptrend (re-accumulation); difference = location. Wide ranges and increased volume (volume may be high, medium or low).
UTAD (Upthrust After Distribution, p146-148): the up-shakeout in Phase C of distribution/redistribution; tests buyers' ability to lift price by reaching a key zone (break of previous highs). Theoretically an UT but called UTAD in Phase C whether or not earlier UTs occurred in Phase B. Volume moderate or strong. Minor UTAD: shakeout in the structure that hits prior (local) highs without reaching the total top; shows more seller control; methodology might call it LPSY (Last Point of Supply); author prefers "UTAD minor" functionally.
Terminal Upthrust (p148-149): like a Terminal Shakeout: normal Upthrust characteristics but more severe (extreme volume or unusually large penetration); price returns into the range quickly = strong selling pressure.
Ordinary Upthrust (p149): shakeout with little preparation during a down trend; interesting short opportunity (trading with the last distribution).
Event 6: Rupture / Breakout (p150-156): after the Phase C test event (shakeout or LPS), price trends in the direction of least resistance. Pros have absorbed needed stock and verified (shakeout + test) that little resistance lies ahead. Imbalance -> strong move breaking the structure and starting the cause's effect. The breakout itself is NOT a trade; it warns of an opportunity in the confirmation test.
- Second ChoCh: the first is the Reaction (trend -> range); this one ends the range and starts a new trend. ChoCh = two events: strong move + slight pullback; identified from the origin of Phase C to the end of Phase D.
- On chart: velocity; candles with relative increase in range and volume; fluid break of previous liquidity levels.
- Volume-less breakout: breakouts normally have increased volume; sometimes not. Suggests the remaining stock is weak so controllers need little effort; narrow-range candles and mid volume warrant suspicion of intent, but may simply mean very little floating supply (few sellers + moderate buyer aggression).
Test types by location (p127-128): test after shakeout (Phase C, before structure break; best risk/reward); test after breakout (Phase D, checking whether Creek break is valid or shakeout); trend test (Phase E).

2. RULES

p106-109 Exhaustion signs: successive PS (SS) lower (or PSY higher) with falling volume, no expansion of range/volume on last extreme = Selling/Buying Exhaustion.
p107 BC high = top limit of range. Label BC as potential until AR + ST appear.
p110-111 Reaction strength rule: compare AR distance to the average recent swings (example: recent up-moves average 50 points, sudden AR of 100 points = stronger context).
p111 Weak AR (interleaved/overlapping, short distance, no volume peak) = market not in equilibrium; likely the later ST will soon be done and exceed structure limits. In a potential accumulation, doubt accumulation; more reasonable = redistribution leading down. In a potential distribution: if the AR down is interleaved, short, no volume spike and the ST ends ABOVE the BC high, suspect re-accumulation.
p111-112 AR volume/range: start large, shrink toward end; end of drying volume/narrowing ends the move (judgment, no mechanical rule).
p113 Scalp: if a trader entered at the climactic event hoping for the bounce, do not hold through the whole range (could be rotation or continuation); close at the AR for a scalp.
p113 After SC+AR, look for minor distribution structure ending the AR and turning down toward the ST; after BC + Automatic Reaction, look for minor accumulation structure ending the reaction and turning up toward ST.
p119-120 Phase B trading: wait for price at the extremes and look for reversal to the opposite side: either direct candle setup on working timeframe, or drop to a smaller rotation structure (upper zone -> smaller distribution; lower zone -> smaller accumulation).
p120 Valid ST: lower-volume than SC and narrowing ranges.
p121 Order of importance for ST: volume decrease first, range narrowing second; the more indicators for one direction, the stronger the analysis.
p123 UA vs UT label by whether probability is accumulative (UA) or distributive (UT).
p124 UA then price holds above resistance before falling = mSOS.
p124 ST at lower extreme: ST as SOW (accumulation) / mSOW (distribution); more likely if Phase A ST made a lower low.
p126 Generic test valid if volume low in a previous high-volume area; invalid if still high: wait for repeated tests or let market continue.
p127 Test after shakeout (Spring test / Upthrust test): best R:R; stop loss very near the structure end; path to Creek wide, first Take Profit = Creek.
p127 Test after breakout (Phase D): stop e.g. in the middle of the structure (reaching it = probably shakeout, not an effective break). Take profit: Fibonacci projections, simple 1:1 projection of the total structure height, or better a place expecting liquidity.
p128 Trend test (Phase E): enter on test when trend is fast and no pause; if the structure's technical targets are already met, "quarantine" the entry; stop beyond a shakeout+test outside the range; take profit seeking liquidity zones.
p128 Valid test candle: volume smaller than the TWO previous candles. In strong-resistance-from-below environments (Spring, upside Creek break, uptrend) the test should be on a DOWN candle (No Supply), narrower range better. In weak environments (UT, down break of Creek, mid-downtrend) test on a narrow-range candle (No Demand).
p132 Shakeout can be expected only after prior trend stop + significant Phase B cause.
p135 Fewer candles before recovery = stronger shakeout.
p137 Clues for shakeout vs real break: (1) type of ST in Phase B: ST as UA -> favour Spring over real break down at lower boundary; ST as mSOW -> favour Upthrust at upper boundary over real up break; (2) post-break behaviour: after break of the lower boundary, price fails to stay below and re-enters range = strong buying, higher probability of Spring; after break of resistance, price fails to stay above = weakness, higher probability of Upthrust.
p138 Labeling: Spring / UTAD only if the shakeout CAUSES the breakout of the structure (Spring must cause the up break; UTAD must cause the break of the low and start of the out-of-range trend). Anything else is a test/UT, mislabeled otherwise.
p140-143 Spring types: #1 needs follow-up demand (high-volume wide-range rebound); first hint = volume stays high while ranges shrink; if not, no up-move. #2 expect successive tests. #3 buy directly.
p145 Spring test (except #3 which needs none): must show narrowing ranges, decreasing volume, hold ABOVE the Spring/Shakeout level = supply exhausted = good buy signal. If test lacks these features it is poor quality: expect more tests; a high-volume Spring must be successfully tested before the rally. If test has not happened, beware it may come later.
p147 UTAD volume moderate to strong.
p148 UTAD test: not always present (supply floods and a SOW follows). Prefer waiting for the test (avoids shorting a real bullish break JAC/MSOS). Good test: stops below the UTAD high, ranges and volume shrink = buyer exhaustion, confirms distribution; sell at the top of this rally. If the test does not stay below the UTAD high or volume is larger, doubt the shakeout even if price makes lower highs; wait for another signal (new shakeouts and successful tests).
p149 Ordinary Upthrust: short opportunity (trade in favour of last distribution).
p150-151 Breakout is not a trade; trade the confirmation test.
p154-156 Authentic breakout clues: (1) price does NOT immediately re-enter the range (most reliable; fails attempts to re-enter equilibrium zone); (2) range and volume increase, breaks prior control zones (previous highs/lows, minor Creek); (3) after-break candles unintentional: narrow range, interleaved, volume lower than breakout move; (4) distance: no predefined, but must be evident; moving a few points away from structure gives more confidence.
p156 Do not trade the breakout bar: delicate area with many crossing orders; wait for the next test.

3. FIGURES (text-derived; images not opened)

p105 (Chart: Selling Exhaustion): sequence of falling "Potential PS" labels at successively lower lows, ending in "Selling Exhaustion" at the final low; no climax bar or volume spike (volume fading).
p108 (Gráfico 45 Buying Exhaustion): rising "Potential Preliminary Supply" labels at successively higher highs, final label "Buying Exhaustion"; narrow ranges, low/average volume.
p114: Automatic Rally chart after PS and SC: sharp up move off the SC low.
p116: Automatic Reaction chart after PSY/BC: sharp drop off the BC high.
p118 (ST in accumulation): order PS -> SC -> AR -> ST; ST returns to SC area on narrower ranges/lower volume.
p125 (Distribution ST types): PS, SC(BC) -> AR -> ST -> Upthrust (UT) at upper extreme -> minor Sign Of Weakness (mSOW) at lower extreme.
p129-130 (tests in buy/sell positions): buy tests = "No Supply" candle (down candle, small range, volume below prior two) at Spring test, post-breakout test, trend test; sell tests = "No Demand" (narrow-range) candle at UT-after-distribution test, test after break down, trend test, with an SOW bar preceding.
p134 (Spring forms): single-candle hammer, 2-candle pattern, minor structure; each penetrates support and recovers.
p140-142 (Spring #1/Terminal Shakeout, #2, #3): #1 = deep penetration, volume surge and wide ranges, then recovery; #2 = moderate penetration, moderately higher volume and range, tests follow; #3 = shallow drift down on falling volume and narrow ranges.
p144 Ordinary Shakeout: sharp wide-range drop inside an uptrend, volume variable.
p146 (Gráfico 59 UTAD): PS(upply) -> BC -> AR(Automatic Reaction) -> ST -> UT -> mSOW -> UTAD -> Test -> SOW; UTAD overshoots highs and reverses.
p147: minor UTAD: shakeout to prior local highs without exceeding total top.
p150: breakout example: PS, SC, AR, ST, Spring, Sign Of Strength, Change of Character (strong move + pullback from Phase C origin to end of D).
p155: lack of interest after an upside break: narrow, interleaved, low-volume candles outside the range.

4. WARNINGS

Do not treat exhaustion tops/bottoms as lacking labels; there may be no climactic volume (p105-109).
A short-range, interleaved, low-volume AR implies disequilibrium; do not assume accumulation/distribution (p111).
Do not hold a climax-bounce trade through the range (p113).
Rigid rules do not exist for AR end; judgement (p112).
An invalid test (volume still high) should not be traded (p126).
Mislabeling: a shakeout that doesn't cause the structure break is just a test (p138).
Real-time labels are uncertain until price leaves the range (p122).
Breakout bar: not a trade; may become a shakeout (p156); markets are uncertain, only probabilities (p156).
No ST after UTAD may mean a lost chance, but waiting avoids shorting a genuine JAC/MSOS (p148).
A Spring with big volume must be tested before long (p145); beware missing test.
Algorithms and momentum strategies amplify shakeout moves (p136).

5. OPEN

Selling/Buying Exhaustion are the author's proposals, not official events; detection thresholds unspecified.
"Large"/"small" reaction, "evident" breakout distance, "narrowing ranges", "drying volume": no numbers (only the 50 vs 100 point illustration).
Whether a test above the SC low is neutral vs bullish is judgmental.
Choice of UA vs UT, ST as SOW vs mSOW, and minor-UTAD vs LPSY depends on prior context interpretation.
Spring #1/#2/#3 boundaries (how deep, how much volume) are not quantified; "Terminal Shakeout" vs "Spring" distinguished only by intensity.
Stop loss "in the middle of the structure" and "1:1 projection" are examples, not firm rules.
Test volume rule uses two previous candles; volume reference in a high-volume area otherwise qualitative.

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