EURUSD Wyckoff Distribution Schematic

We last looked at the Wyckoff Distribution Schematic on 9/14. To review:

I’m showing a Euro futures chart because volume must be incorporated when analyzing a market from a Wyckoff perspective. Volume on SOW (sign of weakness) days are highlighted with yellow circles. Notice how volume expanded into the BC (buying climax) and decreased on the ST (secondary test). A drop below 1.1750 is required in order to complete the distribution.

BC—buying climax. Marked increases in volume and price spread. The force of buying reaches a climax, with heavy or urgent buying by the public being filled by professional interests at prices near a top.

AR—automatic reaction.

ST—secondary test.

SOW—sign of weakness. Indicates a change of character in the price action: supply is now dominant.

LPSY—last point of supply. LPSYs represent exhaustion of demand and the last waves of large operators’ distribution before markdown begins in earnest.

UTAD—upthrust after distribution. Analogous to springs and shakeouts.

We can now label LPSY. Resistance should register between now and 1.1780s. Watch for signs that price is rolling over again (volume reversal, long upper wick on hourly or 4 hour chart, etc.) before adding to the short position. View an updated futures chart with Wyckoff labels at scandex.com/author/jamiesaettele/