Last Point Of Support (LPS): Should have a LACK OF SUPPLY indicated by a RELATIVE NARROWING of the SPREAD and a DECREASE IN THE VOLUME. The comparison is between the up move constituting the (SOS) and the REACTION FOLLOWING it, the (LPS). See the Back-up to the Edge of the Creek (BEC). What if the stock has a possible (SOS) indicated by a widening spread and increasing volume on the move up and is then followed by good supply on possible (LPS) indicated by wide spread and high volume on the reaction? This CANCELS the probability of the fist action being a (SOS) and the stock will probably continue in the trading range for additional testing.
Sign Of Strength (SOS): is an ACTION which shows that DEMAND is in control. The (SOS) should have GOOD DEMAND on the UP MOVE, a WIDE SPREAD and INCREASING VOLUME on the UPSIDE. Now let us deal briefly with the (SOS). The Sigh of Strength and the Crossing of the Creek are often two ways of looking at the SAME ACTION and the BACK UP to the edge of the CREEK very often is the (LPS) Last Point of Support. This (SOS) is usually is preceded by a T/R and a stock can continue in a T/R until it either has a (SOW) or a (SOS). The (SOS) shows that DEMAND is in CONTROL the Price & Volume characteristics are that it has WIDENING SPREAD and an INCREASE in VOLUME evidence of the good DEMAND. This is PROVEN and followed by the REACTION to the (LPS), that (LPS) should have a NARROWING of the SPREAD and a DECREASED of VOLUME compared to the (SOS) indicating the LACK of SUPPLY on the REACTION
Sign Of Weakness (SOW): is an action which shows that SUPPLY is in control. The reaction will decline with a widening spread, increased price weakness, and increased volume, evidence of increased and heavy selling, this is BEARISH. The (SOW) is usually proceeded by a T/R. If the T/R was in an uptrend it would have been stopped by the (PSY), (BC), (AR), (ST). The T/R will end, on the far right hand side, it may end its move with a classic (UT) or (UTAD) or it may NOT. It may simply have a (SOW) and a (LPSY) with perhaps lower tops and lower bottoms. Any possible or potential (SOW) must be confirmed, denied or left in doubt by the SUBSEQUENT rally. The critical thing is NOT HOW FAR the stock rallies, the critical thing is HOW it RALLIES. If it rallies with a gradual decrease in demand, evidenced by a narrowing spread and decreased volume, and with a lower top this COMPARATIVE lack of DEMAND would PROVE and CONFIRM that the previous reaction was a (SOW). Thus DO NOT take a speculative position until you see an (UT) or an (UTAD), or where there is no (UT), the first place to take a position is on the (LPSY) after the (SOW) and aim to pyramid with the coming trend.