The size of bar a reflects ease of downward movement

and it describes what is meant by a large bar Since the close is in the middle of the range, we assume buying emerged at the lower levels of the day. On day b, the range narrows, thus reflecting no ease of downward movement.The low of the day is only slightly below the low of day a as the thrust shortens. Finally, the close is again midrange, indicating that buyers were present at lower levels.

For two consecutive days, prices closed in midrange and the downward

thrust shortened. The market is displaying an unwillingness to move lower.

Therefore, expect an attempt to rally on day c. If the rally exceeds the top of day b, and prices then reverse below the low of day b, expect further weakness

There is ease of downward movement on day a, and the

close at the low of the range reflects a total victory by the sellers. The narrowrange on day b is more difficult to interpret. Does it mean the sellers were unable to make much headway? Does it mean the buyers made a stand and took all of the sellers offers? The position of the close gives us a better clue. Since the close is on the low of day b and below the low of day a, we infer the sellers are still in control. If the close had been at the high of the range, the outcome would have tilted more in favor of the bulls.

Given the position of the close on day b we tentatively expect further

weakness on day c. If there is little or no downward followthrough on day c and prices rally above the high of day b, larger gains are likely.

Day a personifies weakness: ease of downward movement

and a close near the low of the range. A small gap lower occurs on dayb, but the range narrows. The close on day b is near the low and below the previous days close and low.

Although there was no ease of downward movement on day b, all of

the trading took place below the previous days low. There was no ability to rally. In addition, the day ended with a close on the low. The sellers remain in control so expect lower prices. Should price reverse above the close of day aespecially after falling below the low of day ba turnaround of some unknown degree would occur. This twoday configuration is more bearish than #1 or #2.

The price range is narrower on day a, and the close is

near the low of the range. Thus, the sellers were seemingly in control at

the end of day a. On day b, price falls below the previous days low and reverses to close above the previous days high.

The reversal action on day b is the classic key reversal. It tells us there was no further selling interest below the previous low. The lack of selling pressure created a vacuum and the buyers stepped in. Much of this buying may have been short covering. But the strong close above the previous days high suggests support has at least temporarily formed. One would expect upward followthrough on day c. A reversal and close below the low of day b would be very bearish. The low of day b can be used as a stop point on any new long

There is ease of downward movement on day a and the close is near the low of the range. On day b, a rally above the previous days high fails to hold and prices fall back to close near the low. The closes on the

two days are just about equal. Would you think the clustering of these two

closes reflects strong support?

Because the rally on day b failed to hold and 99 percent of the gains

were erased on the close, we would expect further weakness on day c.

Here, we have two consecutive days of holding action, but the position of

the closes reflects weakness and an inability to sustain a rally. No, the clustering of these two closes would not normally be viewed as strong support. It looks more like temporary support in a downtrend.

Although there is ease of downward movement on day a, the position of the close is well off the low and much nearer the high.

Day b is one of those inscrutable, narrowrange bars where prices barely budge from the previous days close.

The position of the close on day a indicates buying appeared at the lower level of the range. It has a bullish connotation. Day b shows a total lack of movement. In the Wyckoff lexicon, this kind of day is referred to as a hinge from which a larger swing may occur. In the context of these two days, the hinge says prices have come to dead center. It alone does not reveal direction, but it tells us to be very alert on day c for something decisive.

As in the preceding example, there is ease of downward movement on day a, and the close is near the high of the range. Day b,however,contains a large gap between its high and the close of the previous day. The actual range is narrow, and price closes near the low and below the previous days low.

Although the actual range on day b is narrow, the true rangeencompassing the gapis quite large. Here, we see all of the gains made on day acompletely erased. The gap probably stems from bearish overnight events or a preopening report. Notice how little movement occurred after the gap opening. This reflects a bearish condition as the buyers were unwilling to make any attempt to start a move on the upside. Nor were the sellers eager to take profits. The selling pressure and lack of buying kept prices depressed throughout the session. Expect further weakness on day c.

Here we have the reverse of #7. We see ease of downward movement on day a, with a weak close near the low of the range.

On day b, price gaps higher and rallies above the high of the previous day; however, the close is on the low of the actual range and slightly below the high of day a.

The true range of day b begins from the close of day a. Some unexpectedly bullish news caused such a gap higher. The action on day b is decidedly bullish as it erases all of the previous days weakness. Except for the position of the close, it rates in bullishness next to the key reversal in #4. One might be concerned about the weak close on day b. But it is not weak when we consider the true range.

Both days a and b have narrow ranges and close near their lows. On day b, price opens below the low of the previous day and stays below its low throughout the entire session.

We see no ease of downward movement on either day. These two price bars reflect a steadily eroding market in which the buyers are backing away.

The volume is probably low to moderate. No wild, flailing, climactic action

here. Instead, we have two slow, steady, unobtrusive down days (slipsliding away) with the few upticks most likely caused by light short covering or a few foolhardy bottom pickers. Expect further weakness on day c.

The range of day a does not reflect great ease of downward movement and price closes in the middle. On day b, price rallies with some what greater ease but closes well off the high of the day, below the high of day a and only a fraction higher.

The midrange close on day a and the lack of a wide price spread suggest

buying is present. At the end of day a, a rally would have seemed likely. A robust rally occurs on day b, but the position of the close indicates selling was encountered. The close of day b marks the midpoint of the two days trading. We can assume trading has been brisk, possibly volatile; however, little upward progress is achieved. The sellers still appear in control; therefore, expect weakness on day c. Depending on where day c opens, the information here could quickly fit into an equally bullish or bearish story. Inmany ways, #10 represents the most ambiguous situation