Wyckoff in action (part 2) by David Weis
In Part 1 of this article (S&C, June 1986), we recognized at point #12 (Figure 1) that large operators
were accumulating bonds prior to an upswing. The conservative point-and-figure count AB (Figure 2)
indicated potential for a move to 63-28. Long positions were recommended for the opening on April 8
with protective sell stops placed beneath the low at #10. The following discussion dissects the
volume/price behavior during the subsequent mark-up and distribution phase that evolved over a 13-day
April 8. June bonds open at 61-11 before moving to a low of 61-09. Based on an entry price of 61-11, we
are risking 7/32nds for a gain of at least 2 1/2 points.
After opening lower, prices steadily move higher
throughout the session. It is noteworthy to mention here that tick volume has a U-shaped pattern. Tick
volume is heavy in the opening 45 minutes and tapers off toward mid-day. From this lull in activity,
trading increases until the final rush of volume in the closing hour.