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STOCK MARKET INSTITUTE Fbunded in 1931

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(602) 942-5581

Introduction to the Wyckoff


Method of Stock Market Analysis

Introduction to
Wyckoff Method of
Stock Market Analysis
—Exhibits and Illustrations
Exhibits &

Illustrations

for

Session 1
EXHIBIT 2

52

51

50

49

48

47

46

45

44

43

42

41

40

39

8 15 22 29 5’12 19 26’ 3 10 17 ti4”31 7 14 21 28 5 Ii


SEP OCT NOV

63

62

61

60

59

68

57

56

55

54

53

52

51

50

49

47

81522295121926310 1724317142128512
AUG SEP OCT NOV
EXHIBIT 1

H
GAP

E
A “’
J
EXHIBIT3

57

96

55

54

53

52

51
65

64 EXHIB1 T4
63

62

61

60

56

56

57

56

54

53

52

51

50

49

48

47

.=
JUN JUL AUG SEP OCT NOV

JUL AUG SEP OCT NOV


EXHIBIT 5

FEB MAR APR MAY JUN JUL


EXHIBIT 6

DISTRIBUTION AREA

PRICE LINE

ACCUMULATION AREA
EXHIBIT 7

PRICE
EXHIBIT 8

2360

2320

2280

2240

2200

2160

18252916233061320 27 4111626181522296 12
APR MAY JUN JUL AUG SEP
.

2950 2950
2900 2900
2850 2850
2800 2809
2750 2750
?700 ?700
2650 2650
2600 260:)
2550 255(I
2500 2500
2450 2450
. .,.... ..: I
III , Id”ll.”. ll; l:l:l,..
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24C0
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t- I
I
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2350 ., L1 I I ,. I I I 235(I
23G0 4
1 1 1 1 , t 1 I I I I I I 230f)
i ~ :. I I
2250 1 1 1 > I
I I I I I ,, 2250
22f20 2200
I
2150 2150
21C0 II I .,. I I f I I I I I I 1 ,. 2100
:’:
2050 2050
2000 2000
950 950
900 900

850 850
800 800
750 1750
700 LL..I .. .. ..L 1 1 ., 1 1 I , , , ,
1700
650 1650
::.::... ...+.+..
t-i-i-i-iii . ... ... ... ...
600 1600
1550 1550
1500 1500
;00 200

150 150
100 100
50 50

1974 1975 1976


EXHIBIT 10

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EXHIBIT 12
.:.
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Stock 1

Stock 3

Stock 4

A
EXHIBIT 14
Stock 3

Stock 4
EXHIBIT 15

46
44
44
43
43
42
42
41
41
40
40

64 64

56

48

40 40

32

24 24

16 16

8 8

0 0

EXHIBIT 16
, , --.--Y ,

63
62 62
61
60
60

Figure Chart Example: Day 1. The stock goes to 86 and then reverses direction to 87.

87 was last figure change posted 90

Day 1. 86-7 87 87
,, 86 85
2. 85-6
,, 85
3.
,, 4.
?, 5.
,, 6. 84 Day 2. The stock again reverses direction from 87 to 85 (which
*t 7,
,, implies it went through 86) and then it reverses back to
8. 86 86.87 k the only square filled in the second column so
v 9. 88
,, go down to 85 (fill h 86 also) but then it reverses to 86
10. 90-89 —86 k filled so we move one column to the right.
,? 11. 88
,, 12. 87
,, 85-6
13.
,, 14. 85-6 87 87
,, 85-6 86 86 86
I5.
,, l.. 85 85 J’&
,, 11! 86-5-90

Note: a 5 is placed at the 85 level to locate price levels


easily. Use 5 for numbers ending in 5—i.e. 5, 15, etc.
and O for multiples of 10—ie. 10, 20.
EXHIBIT 16 (cont.)

Day 3. The stock again reverses direction from 86 to 85. The 85 space is empty in the third column so it
must be filled in.

90

87 87
86 86 86 % 85
85 85
80

4. and 5. No Figure Change—so no posting for these


two days.

6. Continuing in the same direction to 84—the 84 square is


empty so that square can be posted without changing
columns.

87 87 90
86 86 86
85 85 85
%
84

80

7. No Figure change—so no posting for this day.

8. A reversal—back to 86 so it must go through 85—since these are already posted in the third column it is
necessary to move over one column to the right and fill in 85 and 86.

9
87 87
86 86 86 86 8
85 85 85 %
84
8

9. Continuing in the same direction to 88 (through 87) and these are not filled so continue posting in the
same column.

w
88
87 87 87
86 86 86 86
85 85 85
84
EXHIBIT 16 (cont.)
10. Continuing to 90 (through 89) and then a reverse to 89

a) to 90, neither 89 or 90 is filled so remain in the fourth column.

I II I II
90 I I I I 1!!! I
89
88
87 87 87
86 86 86 86
85 85 85
84 .

I-twtt-t-t

b) down to 89—this is filled in the fourth column, so move over one column to the right and post 89.

WI
90

85

(Note that a zero [0] is placed at the 90 level. This is for easy reference.)

11. and 12. Continuing down to 88 and 87—post these in the fifth column.

90

d
89 89
88 88
90
87 87 87 87
86 86 86 86 85
85 85 85
84

13. Continuing down to 85 (through 86) and then reverse to 86. Post 86and 85 in the fifth column and since
86 is already posted in the fifth column, it is necessary to move one column to the right and post 86 in
the sixth column.

90
89 89 90
88 88
87 87 87 87
86 86 86 86 86 86 85
85 85 85 85 4
84
EXHIBIT 16 (cont.)
Day 1. 86-7
,, 2. 85-6
?, 3. 85
g
c “ 4.
.-0 ,,
5.
E
> f? 6. 84

86
88
90-89
,-5“ ,, Il. 88
u 12. 87
w ~~
zCJ ,, 13. 85-6
a ,, 14. 85-6
Is 85-6
& ,, 16’
85
,,
17. 86-5-90

14. Since there is only one square marked in the sixth column, 85 must also be posted in that column. Next,
move one column to the right and post 86.

90
89 89
88 88
87 87
90
87 87
86 86 86 86 86 86 86
85 85 85 85 85 85
84

15. This is the same procedure as 14.

90
89 89 90
88 88
87 87 87 87
86 86 86 86 86 86 86 86 85
85 85 85 85 85 85
84
+lM#
16. and 17. Down to 85, up to 86, back to 85, up to 90.

Down to 85 in the eighth column

Up to 86 and then down to 85 in the ninth column

Up to 90 in the last column

90 90
89 89 89
88 88 88 90
87 87 87 87 87
86 86 86 86 86 86 86 86 86 86
85 85 85 85 85 85 85 85
85
84

Finished F.C.
EXHIBIT 17
To Change a One-Point to a Three-Point Figure Chart

One-Point Chart Three-Point Chart

90
a) In the first column there is only a one point move down to 86. ~
Therefore, there is no entry on the three-point chart. 85

80

b) Up to 87, down to 85 in the second column—a two point down


move: 87 to 85. There is still no entry on the three-point chart.

c) The third column is up to 86 ( 1 point from 85) so there is still


still no entry, but then the stock goes down to 84 which is
posted on the three-point chart as follows: 87868584. (Com-
pare this with the one-point f.c. )

1 I 1 1 1
r 1 , I I

d) Post up to 90 in the fourth column. This is a 6 point reversal.


Move one column to the right on the three-point chart and go
up to 90.

e) Down to 85 in the fifth column—this is a 5 point reversal.


Move one column to the right and post down to 85.
EXHIBIT 17 (cont.)

one-Point Chart Three-Point chart

9 90
f) The sixth through ninth columns have only one point rever-
sals so no entries are recorded on the three-point chart.
8 85

8 80

g) The last column as a reversal of five points to 90—move one


column to the right on the three-point chart and post the re-
versal up to 90.

The three-point figure chart which is consolidated from the one-point figure chart example becomes the
following:

90 90

85 85

80 80
EXHIBIT 18

SUPERIOR OIL FIGURE CHANGES: 232-5-3-4-29-30-25-30-20-5-3


8-7-32-23-30-29-33-0-6-27-9-6-9-8-34-2-3-23-4- 1-5-2-3-2-3-
13-4-2-5-08-9-6-7-6-10-05- 12-09-15-2-14-09-10-09- 11-198-9-
8-200-195-6-5-200-197-204- 1-4-3-4-1-2-199-209-7-8-5-8-7-8-
7-10-09-13-2-3-09- 13-2-3-2-3- 1-4-1-3-O-1-O

240

230

220

210

200

190

24

23
I I I 1 I f I I II I I [ I I I I I I I I I I I III I t-’
SUPERIOR OIL

3 - POINT MODIFIED CHART


22 I1II1III lll~!!!+l I I 1 I I I I I I I I r,
240

21
210 +U:!!!!!!!!4

20( II 1 t I I I 1 I I I I I 1 1 1 L I I I 1 I I I I I I I [ IJ

19
DATE HIGH LOW LAST VOL. FIG CH

11124 129.4 113.2 128.4 755 129-14-28


11/25 128.6 124.2 124.6 505 125
11/26 126.0 121.6 122.5 430 126-2
11/27 00.0 00.0 00.0 00
11/28 124.2 119.4 120.0 464 124-0
12/01 121.6 110.6 110.6 529 121-11
12/02 114.2 108.0 112.4 786 114-08-12
12/02 119.2 112.0 117.0 434 119-7
12/04 127.4 117.2 122.7 510 127-3
12/05 123.2 119.0 119.6 290 119
12/08 119.4 110.6 113.2 847 111-3
12/09 119.0 112.6 117.4 785 119-8
12/10 119.2 110.5 110.5 407 119-1
12/11 113.2 105.6 109.6 834 113-06-9
12/12 110.4 106.6 108.4 784 110-07-8
12/15 111.0 101.4 102.6 290 111-02
12/16 108.6 102.2 108.2 409 108
12/17 114.6 107.0 113.6 358 107-14
12/18 119.0 111.6 113.0 510 119-2-3
12/19 118.4 114.0 117.6 850 118
12/22 123.2 117.7 122.4 399 123
12/23 123.3 116.4 117.0 430 117
12/24 120.1 117.0 119.2 257 120
12/25 00.0 00.0 00.0 00
12/26 119.7 118.4 119.4 357 119
12/29 121.0 114.0 115.0 258 121-14-5
12/30 117.4 114.6 115.5 193 117-5
12/31 116.4 113.4 116.0 224 114-6
1/01 00.0 00.0 00.0 00
1/02 115.4 110.6 113.2 308 111-3

I 1- POINT FIGURE CHART


I

13

12

11

10

9
EXHIBIT 20

1-

n
W
H
k
n
n
0
x
H
z
H
0
a
I

0-)
4
0
EX: HIBIT 21

h - POINT FIGURE CHART I


129 I

128

127

126

125

124

123

122

121

120

119

118

117

116

115

POINT FIGURE CHART 114

113

112

111
120
110

109

110 108

107

106
100
105

104

103

102

101

100

80

40

0
Name Session One
Exam
Address

City State Zip

This exam is designed to test your understanding of the principles discussed in the material you have just
completed. The answers to the questions may be drawn directly from the content of the discussion. Others
may be based on the material, but will also require some independent thought. A score of 130 points is the low-
est passing score. Return the completed exam to SMI for grading.

Part 1 - True or Faire

Each question in this section is worth one point.

T F 1. If the market is in an uptrend, stocks that are moving in harmony with that trend should produce
some of the best opportunities for profit.

T F 2. Most of the time information of a fundamental nature about a stock will already be reflected in the
price by the time the information becomes common knowledge.

T F 3. Trades in individual stocks should be timed with anticipated moves in the general market.

T F 4. There are a limited number of specific types of action that indicate a stock is likely to begin a move
soon.

T F 5. Important buying is accomplished by professional investors during a period of distribution.

T F 6. The investor who works with a large number of analytical methods at the same time is the one
most likely to experience success in the stock market.

T F 7. Price movements in the stock market can be classified by the relative amounts of time they take to
complete.

T F 8. In fundamental analysis, the principle concerns are the price and volume action of the market and
individual stocks.

T F 9. The main reason for failures in the stock market is a lack of funds.

T F 10. Positions should be taken in those stocks that have not yet built a cause.

Part2- Fill in the Blank

Each question in this section is worth two points.

11. In order for a stock to make a move of ten points, there must first be a that
will produce that

12. If the price of a stock is moving lower and the level of volume is decreasing as the price falls, the
in the downward direction is lagging behind the

13. Professional investors do most of their during a period of accumulation.

14. and conditions prevent a stock from moving in


one direction indefinitely.

15. The price of stocks and the movement of the market is in a pattern.

16. Prices rise and fall due to excesses in and


17, Technical analysis is based on the and action of
the stock or market being analyzed.

18. The first step in a sound process of analysis is to identif y the and
of the general market.

19. News items are of value in technical analysis.

20. When in , do

Part 3 — Short Answer

Each question in this section is worth four points,

21. What is/are the basis of the judgmental approach to technical analysis and to what does it/do they
apply?

22. On what types of things does the student of the mechanical approach to technical analsysis rely?

23. Once the trend of the general market has been determined, which stocks are the only ones that
should be considered for trading?

24. What is one of the most important problems with fundamental analysis?

25. What effect should the position of the general market have on the timing of trades in individual
stocks?

26. What consideration should be given to the position of a stock in determining whether or not to
take a position?
27. Define distribution.

28. What IS the best way to relate various methods of market analysis?

29. Using time as the basis, how can price movements in the stock market be classified?

30. On what types of information does fundamental analysis rely?

Part 4 — Essay

Each question in this section is worth fifteen points.

31. It is said that most failures in the stock market can be traced to a lack of knowledge. An investor
who lacks knowledge of the three basic laws that control all market and stock action is likely to
make frequent and basic trading errors. What types of errors might occur due to this lack of
knowledge?

32. The Wyckoff method specifies certain steps that should be taken in the analysis of the market or
of a particular stock. What are these and in what order should they be accomplished?
33. Sometimes stocks that are moving in harmony with the market and are in a position from which
additional progress is likely should not be bought. This is true even if the general market also
seems to favor an immediate move. Is this really a true statement, and if so what is the justification?

34. For the moment, assume that the only information that is known about a stock in which a long
position is held is its daily closing price and total volume. This should be enough information for
the good investor to determine when his stock is likely nearing a reaction. What basic law of
market action is involved in this determination and how is it applied?

35. The large interests in the stock market cannot acquire their holdings in a stock in quite the same
manner as the small investor. The large number of shares involved requires extra care due to the
potential impact on the price. What is this process of acquiring stock called? During this process,
what is the professional trader trying to accomplish and avoid? In general, how might he best
place his buy orders to accomplish his objective?

‘,..
Part 5 — Analysis

Each question in this section is worth seven points.

36. Investor A has a long position of 1000 shares in stock XYZ. The price of his stock and others in
general have been going down for some time and seem to be falling faster and faster on increasing
volume. The stock is now into its downside objective range. Obviously, he should have sold much
earlier. In view of the conditions that exist at this time, should he sell now or hold his position?
Why?

37. Investor B is new to the market. Like most new investors, he has visions of immediate profits and
quick wealth. He is quickly discouraged by the pattern in which stock prices move. What should
someone have explained to him before he began trading.

38, Trader C has been watching the stock of a small high technology company that tends to trade a
few hundred shares each d~y on the Pacific Exchan~e where it k-listed: He-is convinced that it is
just a matter of time until the stock is noticed by others and starts to climb. He calls his broker and
places a market order to buy 2000 shares. Later, he is shocked by how much he had to pay for his
shares. What likely happened here?

39. Investor D does not read the Wall Street Journal, never looks at an annual report, and couldn’t
care less about world affairs. Can he possibly make money in the stock market? If so, how? If not,
why?
40. Broker E is always telling his clients about this stock or that stock and pointing out to them how
well positioned they are to move up or down. Sometimes they live up to his expectations, but just
as often his clients who listen end up with stocks that move very little or not at all. What critically
important factors is this broker overlooking?

41. Investor F has been holding a short position in a particular stock for quite some time and the stock
has dropped in price by a considerable percentage. He hears from a friend that the company just
reported a tremendous loss. The stock drops several points on high volume to its downside
objective. Investor F immediately covers his position. In view of the negative news, should
investor F have his head examined for liquidating his position at this time? Why?

42. A source of frequent losses for many investors is the feeling that it is better to be doing something
than nothing. This attitude will always benefit the investor’s broker, but may not benefit the
investor. When if ever is it better to do nothing?

43. Three investors who are all technically oriented approach the market from three different per-
spectives ranging from long term holding of p-ositions to short term trading. They all maintain that
they handle their trades in the same manner. In view of the fact that each intends to hold his po-
sitions for a different length of time, how can they justify their belief?

44. The market has been gradually moving higher for several months when a particular investor finds
a stock that he is sure is ready to decline. He takes a short position. What basic trading error has
he made?
Exhibits &

Illustrations

for

Session 2
B

EXHIBIT 2
G

F
F

A
EXHIBIT 5
A
EXHIBIT 7

S3

52

51

50

43

43

47

46

45

44

43

42

41

40

&

Stock 1

●EE%ZE!I
37

36

35

34

33

32

31

30

23

23

27<

Stock 2
IBIT 8
EXHIBIT 9

27

26

25

24

23

22

21

20

19

18

17

16

~5

Stock 5
EX.HIBITIO
..

EXHIBIT 11
40

39

s
37

s
36

34

33

32

31

29

26

27

Stock 11

80

7a

76

74

72

70

68

66

62

60

68

56

54

52

50

48

Stock 12
Stock I
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

,,

Stock 2
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

Stock 3
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

Steck 4
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

Stock 5
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition


Stock 6
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

Stock 7
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

Stock 8
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

Stock 9
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

stock 10
Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition


Stock 11

Type of trend

Type of trend lines and points of definition

Type of trend

Type of trend lines and points of definition

stock 12
Type of trend

Type of trend lines and points of definition


2900
2850
2800
2750
2700
2650

500
250
200
150
100
50
0
- 50
-1oo
-150
- 200

-250
- 300
-350
- 400

—450
- 500
-550

200

150
100
50

I 1977
I }978 I 1979 I 1980 I
640

600

560

520

480

440

400

360

320

280

240

200

160

120

080

040

64

48

32

16

MAR Al? R MAY JUN JUL AUG SEP


370
360
350
340
330
320
310
300
290
280
270
260
250
240
230
220
210
200
190
180

20
15
10
5 m

0
12 13 14 15 16 19 20 21 22 23 26 27 28 29 303567

JUNE JULY
n

<
EXHIBIT 17

74

73

72

71

m
69
66
67
66

66

64

63

62

61

60

59

56

67

56

55

54

53

52

51

50
EXHIBIT 1744

EXHIBIT 17B

33

32

31

30

29

28

27

26

25

24

23

22

21

20
a
EXHIBIT 24

70

66

66

64

62

60

56

56

64

62

60
‘s I
EC TED
46 VE TO
ED
46

44

42

40

36

. ----- --- ——
.1111 AI II= RFD -ncx JAnu lxc .. JAM
EXHIBIT 25

1
As
s

ED
Answer pages for this EXHIBIT26
exercise can be found
following CHART 12.
Stock 1

Stock 2

25181522295121926 310172431
AUG SEP OCT
EXHIBIT 27

Stock 3

96

64

32

7142128512192629 16
NOV DEC JAN

Stock 4

34Q.Y R12i2
EXHIBIT 28

Stock 5

Stock 6
EXHIBIT 29
Stock 7
L , , r r ,.,,
,. ,. I [
Stock 8
I .,.
m
-+4
,. CM
G>
j,J::j,lj:[:,::,:,:,:::,:::*:::\:!:i::,:::*:::l::,:.l:.[.l:,::,:,::,:::*:::,:;,E,,::::::ii-:
::
EXHIBIT 30
Stock 9
II I I ., ...’:
. .
I 1. 1.. 1 ,.
.
t I I 1- I I :I””i
,.. . . . . . . .:. :,::... ..
r . .
1
1...,...,...,
Stock 10
0
.
EXHIBIT 31

Stock 11

Stock 12
stock I
Type of trend

Points of definition

Position warrented (Y/N)?

Why?

stock 2
Type of trend

Points of definition

Position warrented (Y/N)?

Why?

stock 3
Type of trend

Points of definition

Position warrented (Y/N)?

Why?

Stock 4
Type of trend

Points of definition

Position warrented (Y/N)?

stock 5
Type of trend

Points of definition

Position warrented (Y/N)?

Why ?
stock 6
Type of trend

Points of definition

Position warrented (Y/N)?

Why?

Stock 7
Type of trend

Points of definition

Position warrented (Y/N)?

Why?

Stock 8
Type of trend

Points of definition

Position warrented (Y/N) ?

Whv?

stock 9
Type of trend

Points of definition

Position warrented (Y/N)?

Why?

Stock 10
Type of trend

Points of definition

Position warrented (Y/N)?

Why?
stock H
Type of trend

Points of definition

Position warrented (Y/N)?

Why?

Stock 12
Type of trend

Points of definition

Position warrented (Y/N)?

Why?
OVERBOUGHT CONDITION
EXHiBIT 33

-.

82

80

78

76

74

72

70

68

66

64

62

60

58

56

64

62

50

48

46

224

192

160

28

96

64 64

32

0 . . 0
6 yN30 27 4 11 18 25 1 81522295121926310 17243171421
JUL AUG SEP OCT NOV
EXHIBIT 35
EXHIBIT 36

77 77

76 76

75 75

74 74

73 73

72 72

71 71

70 70

69

68

67 67

66

65 65

64

63

62 62

61 61

60 60

59

58

57 57

56
EXHIBIT 37

Ps

GENERALLY AC COMPAYIF.D
RY VERY HIGH VOLL!!.l E.

EXHIBIT 37A

320

280

240

200

160

120
80

40

0
EXHIBIT 37B
EXHIBIT 37C
EXHIBIT 38
EXHIBIT 38B
Sc

Sc
EXHIBIT 40
EC
\
A
F
IDEAL SPRING SITUATION

SIGN OF STRENGTH
A SHAKEOUT ACTION y
1, DEEP PENETRATION
2, HIGH VOLUME

v
I

I TESTS OF SHAKEOUTS I

I
BACKUP TO THE
,1/’
CREEK

\’Ah N
ae:e4anea

-1A
I nw!hl

v \>7’Lw
JUMP ACROSS THE CREEK

/
43

42

41

40

39

38

37

38

35

34

33

32

31

29

28

640

560

480

400

320

240

160

80

0
EXHIBIT 48

-,
la2s18 1.SZ229Sl~ 1926310 1724317142128512 I_9%_2U;6;3j0”6
AUG SEP OCT NOV DEC JAN
EXHIBIT 49

66

64

63

62

61

60

58

S8

57

56

!56

54

53

52

51

49

48

47

46

320 0

280 0

240 0
200 0
160 0

120 0
80 80
40 40

0 0

SEP OCT NOV DEC


AUG

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT 50

96

64

32

UG SEP OCT NOV DEC

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT 51

32

31

23

27

28

26

24

23

22

21

20

19

la

17

-.
192631017243171421 28 S121926291623W “6
‘iEP OCT . NOV DEC JAN

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT 52

s
96

94

92
90

68

66

64

62

60

80

40

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT 53

AUG SEP OCT

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT 54

29

28

27

28

25

24

22

320

280

240
200

160

120
80

40

0
AIJG SEP OCT t40v DEC JAN

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT M

AUG SEP OCT NOV r

Could this stock justifiably be bought’!

What basis is there for this conclusion?


EXHIBIT 56

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT57

800

640

480

320

160

0
18-25” 101s2229S12 102S 310172431714 21zs51z6
AUG SEP OCT NOV D.

Could this stock justifiably be bought?

What basis is there for this conclusion?


EXHIBIT 58
EXHIBIT 59

Ixl

96

64

32

1)
‘n ‘2s 1 81 L222951~ 19263 101724317
AUG SEP OCT

35

34

33

32

31

30

29

28

N.JG SEP OCT - ‘“


;HIBIT 60

AUG SEP OCT NOV oEC JAN

.
EP ‘- OCT .NOV DEC JAN
EXHIBIT61

9C

8a
m
64

1
T
62

60

n
76

74

72

70

66

66

64

62

58

56

54

52

50

46

320

280

240
200

160

120
80 to

40 40

0 “o
- 18’ 25” 1“ 8-1 S”22295” 1$1626310 17~4~li14Zli8Si2i9 26-2 _Si62330’
AUG SEP OCT NOV DEC JAN
EXHIBIT 62
7i

71

m
69

89

67

88
66

63

62

61

320

280

240

200

160

120
80

40

--
c,

I
1
18 25 1 815222951219 SPACE F‘OR ANSWERS IS
NJ G SEP
PROVIDE D FOLLOWING
lsTOCK 8 .

;HIBIT 63

AIJG SEP OCT NOV DEC


64
46

47

46

46

44

43

42

41

40

38

37

266

224

192

160

128

96

64

32

AUG SEP OCT NOV DEC

EXHIBIT ‘ 65

152

146

144

140

136

132

126

124

120

116

112

MM

104

1(XI

60

32

16

0
‘15222951 ~19263 101724317142126-5
AUG SEP OCT NOV
EXHIBIT 66

EXHIBIT 67
48
,HIBIT68
46

44

42

40

38

34

32

30

28

28

480

400

320

240

160
80

‘3

—- AUG SEP OCT . NOV

.
:XHIBIT69

SEP ‘ OCT NOV DEC JAN


Stock I
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?

Stock 2
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?

Stock 3
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?

Stock 4
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?

Stock 5
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?

Stock 6
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?

Stock 7
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?

Stock 8
Is a short sale indicated (Y/N)?

What is the basis for this conclusion?


Exhibit 70

67

66

65

64

63

62

61

60

59

66

57

56

55

54

53

52

51

50

49
Exhibit 71

31

al

29
.
28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

640

560

480

400

320

240

160

80

AUG SEP OCT NOV DEC


Exhibit 72

T
Exhibit 73

96

64

32

0
------ --—-
SEP OCT NOV DEC JAN
AUG
Exhibit 74

44

43

42

41

40

39

37

36

la 25 1 6.1i2Z2ti 5-ii 1926310 1724317142128512 1926291623306


AUG SEP OCT NOV DEC JAN
Exhibit 75
I 1 I I I I
++
ExhiMt 77

STOCK FALLS SHORT


OF OBJECTIVE

I I I
II
I I
I
I
I

I I



I
I 1’

Exhibit 78
s
o
[
Exhibit 79
Exhibit 80
Exhibit 81

Ob
to

)
Objective approximately eq
to count on one point at 3

1 I T
CONTROL DATA (CDA)
I 3 POINT FIGURE CHART z:
I-4!!!,,, .!!,,.,,,,.,,,,,,
I
THREE POINT CHART COVERS
ALL THE ACTION ON THE
ONE POINT CHART
I
Exhibit 83

k-t: ‘:1:: ?+---’ 1 l-f


T 62

.. fsA. l. .. 1..,
hq . ,160
+
1“’’1’1[
-.

~ :.-.,.--.., . . .... ..-+.+-+....


;l; l;::;l;:;:l::; l::;:]::’: w
. . . . .. . . .. . .. . .. . .
5 I . ..- I w I I
.
. . . .. . . .. . . .. . . -+.. +

. . . pw
:::::
:::::
.. .tl 1....l.
\42\42

.
!“...
!....!.
-.!..::
!:560

1 15 29 12 26 10 24 7 21 5 19 2 16
AUG SEP OCT NOV DEC JAN
EXHIBIT 83 (cont.)

Exhibit 84
Exhibit 85
Exhibit 86

I I I i I I I
H!!l! !! !! !! tttl!! l!!!!!!! !!!!!!4

IIIIIIIIIIIIIIIIU-I-L.I I1!IIIILLAA!I!!!!I!! !!!! !!!!1

I I I i I I
M!!!!!!!!;!!!!!!!!!!!!!!: !::!!:!:!/!:!!!!!4
Exhibit 87
Exhibit 88

, +:::;::::+++:::::!:!!! !:!!!!!+
Exhibit 89

80 80

78 78

76 76

74 74

72 72

70 70

68 68

66 66

64 64

62 62

60 60

58 68

56 66

54 64

128 128

112 112

96 96

80 60

64 64

48 48

32 32

16 16

0 0
7 21 4 18 2 16 30 13 27 11
MAR AP R MAY JUN
Exhibit 91

52 52

50

48

48

44

320

280

240
.. .. . . . . . . . .. .. . . . . .i
200

160

120
80

40

0
4 18 1 15 ’29 ’14 28
JAN FEB MAR
93

27

26 =]2680
26

26

25

25

24

24

24

/4 /4

72 72

70 70

68 68

66 66

64 64

62 62

60 60

58 58

56 56

54 54

52 52

82 82

al 80

78 78

76 76

74 74

72 72

70 70

68 68

66 66

64 64

62 62

60 60

58 58

56 56

54 w

52 52

50 50
Exhibit 94

18 1 15 29 1226’ 10247 21 5
AUG SEP OCT NOV
320

280

240

200

L60

80

40

0
8 22 7 21 4 18 2 16 30 13 27
FEB MAR Al? R MAY JUN
Exhibit 96

136

132

128

124

120

116

112

108

104

100

96

92

.88

’84

80

76

72

68

126

112

96

80

64 64

48 46

32 32

16 16

0 0
6 20 4 18 1 15 29 12 26 10 24
J UN JUL AUG SEP OCT
Each of the points marked on EXHIBIT 95 and EXHIBIT 96
represents a point at which some type of action might
be taken. In each case, however, there is a reason why
no action should have been taken. In the space provided
indicate those reasons

I EXHIBIT 95
I

c
D

i EXHIBIT 96 i

c
D
/ 16QQ

11 12 1 2 3
Exhibit 98

I 1 t 1 !
t ?

478

O-D
,,
‘i
A /
476 \ / A 0
174,
w
/\

475
v ●

i 16401
I I I I
11 12 1 3
Exhibit 99

32

16

0
6 20 4 18 1 15 29 13 27 10 24 7- - 2i
SEP OCT NOV DEC JAN FEB
Exhibit 100

2400 2400

2350 2350

2300 2300

2250 2250

2200 2200

2150 2150

2100 2100

2050 2050

2000 2000

950 1950

900 1900

850 1850

800 1800

1750 750

1700 700

1650 650

1600 600

1550 550

1550 500

200 2od

150 150

100 100

50 50

0 0

I 1974 I 1975
I
Exhibit 101

-256
%! -256

Ill
28 8 “ 288

-288 -288 25 6
,. 256

-320 224 I!i3 224

-352 352 192 192

-384 -384 160 160


-416

-448

2440
!!l -416

-448

_ 2440
2800

2760 -- ..
E
i
+.
?242760
2840

2800

2400 “ 2400 2720 2720


— -f
2360,M
7 — 2360 , 180
—. . .
i~
2320 40
WYCKOFF WAVE
2280 00
Isil$ $s
Z*.-d
2240&!+ 2 560
2200& 22E%P200 2 520
..+,,,: ,.. -
Eiti%wo ,:z:+.-+_.+
2 480
2120 120 2440 2 440

2080 2400
E&a
2400
80
WYCKOFF WAVE
80
CHART 2
I=$!=
—...
-
80

64 64 64 64

48 48 48 48

32 32 32 32

16 16 16 16

0 0 0 0
Exhibit 102

30 31-”3 5 6 71
OCT NOV
-360


A
II O.P. INDEX
269 -320 -410 ! 2600
O.P.
,

268 -330 -420, ,A


2590 w
v
B I

A
267 2520 2580 /

266 2510 2570

WYCKOFF WAVE
1

265 2500 a 2560


WYCKOFF WAVE

264 2490
I WYCKOFF WAVE
2550

26: 2480 r 1 2540 A


v
I EXAMPLE 1
EXAMPLE 2 I

26> -1 11
I
I
2470
10
A
11
1/-!
12 1 2 3 4
2530
10 11 12 i -2 3 1

Is this an example of divergent IS this an example of divergent Is this an example of divergent


action? action? action?
What direction does it indicate What direction does it indicate What direction does it indicate
the market should move? the market should move? the market should move?
2340

2320

2300

EXAMPLE 4
2280
Is this an example of divergent
action?
What direction does it indicate
the market should move?

2260
EXA MPLE 5
Is this an example of divergent
action?
What direction does it indicate
the market should move?
Zzho
EXAMPLE 6
Is this an example of divergent
action?
What direction does it indicate
the market should move? m
2220
s
-.
2-7 4 1’1 21 ,28 4 11 I 3 12 19 u
~
160

176

-3 68 .368 192

-3 84 384 208

-2 .224 400 .224


-4 00
-2 240 -4 16 416 440

-2 256 -4 32 432 400

-2 272 23 20 320 360

-2 288 22 80 280 320


24 440 22 40 240 280
24 400
22 00 200 240
23 360 21 60 160 200
23 320 120
21 20 160
22 280 080
20180 120
48 48
48 48
32 32 32
32
16 16
16 16
0 0
0 0

Is this an example of divergent Is this an example of divergent Is this an example of divergent


action? action? action?
What direction does it indicate What direction does it indicate What direction does it indicate
the market should move? the market should move? the market should move?
Exhibit 106

Is this an example of divergent


action?
+ 16 What direction does it indicate
the market should move?
0
16
32
48

64
80

2400
2350

2300
2250

2200
2150
2100
2050
2000 I
200 I
150I
100
50
0 -250
MAMJJ
-275
-300
-325

-350
-375
-400
-425
-450

-475
-500
2400
2350
2300
2250

2200
2150
2100
2050
2000
200

150
Is this an example of divergent 100
action?
50
What direction does it indicate
the market should move? 0
ONDJ
Exhibit 107

58.

50

42

34

26’

Exhibit 108

+ 32

32

64

96

128

Exhibit 109
+144

+128

+112

+ 96

+ 80

+ 64

+ 48

+ 32

+ 16

16

32

48

64

80

96

-112
Exhibit 110

‘-t.1

-t.1

+“1

+-

+
Exhibit 111

92

76

60

44

28

Is this market ready to move?


In which direction?
Why do you think so?
Exhibit 112

Is this market ready to move?


In which direction?
Why do you think so?
Exhibit 113

80

64

48

32

16

Is this market ready to move?


In which direction?
Why do you think so?
Exhibit 114

1 I I I I I I I I I I I I I I I I I 1 I t+ 208

I , , , I I I , [ 1 I
, I 176

I I I 1 I 1 I I [ t I I
160 1(IO

il I 1 1 I I ! I 1 144

I I I I I t I I 1 I I I I I I I I I I I I I I I I I I I
96 I I 96

, I i , 1 ! I , 1 1 I I [ I I .! 880

2840
lii..i~ijiiiiiiiii~iij 2800

I I I I I I I I I [ I I I
4 I 276°

i I 1 ! 1 ) ! ! I I I 1 {2680

Is this market ready to move?


In which direction?
Why do you think so?
Exhibit 115

80

80

16

16

32

58

50

42

34

Is this market ready to move?


In which direction?
Why do you think so?
Exhibit 116

r“~”’i] l~’”l”i llllllil”TTl

32

16

Is this market ready to move?


In which direction?
Why do you think so?
Name Session Two
Address _ --. - - Exam

City ___ . State Zip

This exam is designed to test your understanding of the principles discussed in the material you have just
completed. The answers to the questions may be drawn directly from the content of the discussion. Others
may be based on the material, but will also require some independent thought. A score of 130 points is the low-
est passing score. Return the completed exam to SMI for grading.

Part 1 - True or False

Each question in this section is worth one point.

T F 1. One characteristic of an upthrust is the penetration of a support level.

T F 2. An uptrend is defined by a support line and an oversold line.

T F 3. The minimum acceptable profit/risk ratio is two to one.

T F 4. Stop orders should be used only when there is a signifjcant doubt about the future of a position.

T F 5. Halfway points provide a measure of a stock’s strength or weakness.

T F 6. Overbought and oversold conditions warrant some type of correction.

T F 7. A down count may be taken from the last point of supply to the buying climax.

T F 8. A trend can be most simply defined as the line of most resistance.

T F 9. The Technometer is a Trend Barometer that indicates the degree to which the market is over-
bought or oversold.

T F 10. An ideal position to buy a stock is on the jump across the creek.

Part 2 - Fill in the Blank

Each question in this section is worth two points,

11. A is when the Wyckoff Wave and are making pro-


gress in opposite directions.

12. The Force Index reflects the or being exerted on


the market.

13. A is the means by which an investor can protect himself against the un-
forseen.

14. A stock may be considered for short selling if it has reached its and broken
its

15. In addition to knowledge and understanding, a critical factor in stock market success is

16. A spring is a price action that produces the penetration of a

17. The defining of a down trend channel requiresa and an

18. The support line of an uptrend is constructed across the of two consec-
utive of similar importance.
19. The amount of new progress made on each thrust in a major up or down trend provides a measure
of relative or weakness.

20. When a stock makes a penetration above the top of a trading range on increased volume and then
reacts down to the top of the trading range on lower volume, it may be

Part 3 – Short Answer

Each question in this section is worth four points.

21. What is an essential characteristic of an upthrust?

22. How is a shakeout in a trading range different from a spring?

23. What factors determine the quality of a spring?

24. What type of trend generally consumes most of the trading time of a stock or the market?

25. In a down trend, on what points should the supply line and oversold line be based?

26. What type of trading opportunity maydevelop following a significant penetration below a support
line on high volume and on what factor would that opportunity depend?

27. Once a trading range has been established, what type of action on rallies and reactions in that
range might indicate the desirability of selling short?
28. Give two conditions that must be met before a stock should ever be seriously considered as a buy-
ing candidate.

29. When analyzing the objective of a long term down count, how should it be considered?

30. What is a stepping stone confirming count?

Part 4 — Essay

Each question in this section is worth fifteen points.

31, A stock is in an uptrend and the indicated objective is considerably higher than the current level.
Even so, the stock goes into a new trading range and starts building potential. What would be the
best way to approach this new build up of count both for the investor already holding a long posi-
tion and one looking to take a position.

32. Describe how an investor might apply the one third-one third-one third method of investing to a
cash fund of $15,000.
33. Every time the market provides an indication of its next important move, it also provides proof of
that indication. Explain the nature of this proof in the case of buying and selling climaxes and
either the primary buying opportunities or the primary selling opportunities.

34. Before any stock should be bought, t~erearea number of tests that it must pass, Name as many of
these as you can recall and list them in an order in which they might possibly be passed.

Part 5 — Analysis

Each question in this section is worth seven points,

35, Investor Z has been watching a stock make a major decline without any significant rally. All of a
sudden the stock does make a meaningful rally of five to ten percent. The investor decides this
indicates the end of the decline and plans to buy when the price gets back to its former low. This
analysis is filled with errors, name one.
36. An investor new to the Wyckoff method remembers reading about the law of cause and effect. He
then sees the market make an aggressive rally without having first built any apparent cause. He
concludes that the method must therefore be invalid. What has he forgotten to consider?

37. Investor Y watches a stock make a sharp break below the bottom of the trading range on in-
creased volume. He thinks this is a negative sign and wants to sell short. Should he do~o at this
time and why?

38. Investor X sees what he believes to be a shakeout, The stock in question starts to recover, so he
places a buy order. What potential problem should he be aware might develop and how should he
handle it.

39. Sometimes investors will see a stock that they are considering suddenly leave the trading range.
They conclude that all opportunities to buy this stock have ended. This is not a correct evaluation
for a number of reasons. Name one,

40. Investor W is willing totakeasomewhat greater risk in an effort tosecureagood price on the posi-
tions he takes. He wants some measure of safety, however. How early in the trading range might
he consider buying and why?

41. If a short position is held in a stock that is in a down trend, it is often a good idea to continue hold-
ing that position even if the price starts to go through a period of horizontal movement. At some
point, that continued holding can no longer be justified. When might that point arrive?
42. Assume for the moment that you are holding a long position in a stock that has not as yet reached
its upside objective. A divergence is noted between the Wyckoff Wave and O.P. Index. If your
profit in the position is twenty-five percent and if your stop is fifteen percent below the currnet
price of the stock, how might you handle this situation?

43. Investor V is no fool. He knows that a stock cannot decline forever, He watches stocks that are
declining and when they have dropped twenty-five percent he buys. Is he doing anything wrong?

44. Investor U bought a stock that he was sure would go up, All the action looked very positive. For no
apparent reason, the stock suddenly dropped five points and triggered his sell stop. A friend told
him to buy the stock back immediately. Is his friend crazy, or could there be justification for such
an action?
Exhibits &

Illustrations

for

Session 3
Resource &Goal Evaluation

I. RESOURCES

A. QUESTION - What dollar amount can I set aside to serve as my


initial account amount for stock market operations?

ANSWER -

B. QUESTION - Assuming that there is no unforseen negative change


in my source of regular income, what additions to
my trading account can I make and how often?

ANSWER - Amount Frequency

C. QUESTION - How am I going to handle additions to my trading


account that result from profits?

ANSWER - Long term profits -

Intermediate profits -

Short term profits -

11. GOALS

A. QUESTION - As a general rule, what type of trading will be the


primary focus of my market activities?

ANSWER -

B. QUESTION - On a per trade basis, what is the minimum gross pro-


fit that I will persue?

ANSWER -

.
C. QUESTION - If I should decide to diversify the type of commit-
ments I make, what portion of my funds will I put
into each type of trading?

ANSWER - Long term

Intermediate term

Short term

III. RESULTS

A. QUESTION - Based on the plan I have outlined, what is the max-


imum gross profits I can expect during my first full
year of market operations?

ANSWER -
B. QUESTION - (To be answered later) What was the total of all
my gross profits and losses during my first year of
trading and how did this compare to the maximum pos-
sible?

Answer -

Initial account amount

Ending balance for first year

Growth

Addition of funds

Beginning balance for second year

Ending balance for second year

Growth

Addition of funds

Beginning balance for third year

Ending balance for third year

Growth
IN ANALYZING THESE SAMPLES, DECISIONS MAY BE BASED
ON THE OVERALL PICTURE OR ON SPECIFIC POINTS. IF
PARTICULAR POINTS ARE THE BASIS OF YOUR DECISION,
PLEASE CIRCLE THEM OR MAKE NOTE OF THEM IN SOME
OTHER MANNER.

DAY ? DAY 3

i
I

--L- 1

P’ \

EEzl

A /
I SAMPLE 3
I

DA Y 1 DAY 2 DAY 3

I I [

A~h 4 .
v
T
A
A

I
IN SAMPLES 4 & 5, ASSUME YOU ARE TRADING INTRADAY.
THE DAY HAS DEVELOPED TO THE POINT SHOWN. YOUR
DECISION AS TO WHETHER ACTION SHOULD BE TAKEN IS
TO BE BASED ON THE PICTURE AT THAT MOMENT.

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Practice Tradinq Exercise A- Wbrksheet

SAMPLE 1

Is there an immediate trading opportunity?

If so, what type of action is responsible for it?

What response should the investor make?

If no immediate trading opportunity exists, what further


development, if any, might result in one?

SAMPLE 2

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development, if any, might result in one?

SAMPLE 3

Is there an immediate trading opportunity? .

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?
SAMPLE 4

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?

SAMPLE 5

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development, if any, might result in one?

SAMPLE 6

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?
SAMPLE 7

Is there an immediate trading opportunity?

If so, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?

SAMPLE 8

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?

SAMPLE 9

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?
SAMPLE 10

Is there an immediate trading opportunity?

If so, what type of acti’on is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development, if any, might result in one?

SAMPLE 11

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development, if any, might result in one?

SAMPLE 12

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?
SAMPLE 13

Is there an immediate trading opportunity?

If so, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development , if any, might result in one?

SAMPLE 14

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development, if any, might result in one?

SAMPLE 15

Is there an immediate trading opportunity?

If SO, what type of action is responsible for it?

What should be the investor’s response?

If no immediate trading opportunity exists, what further


development, if any, might result in one?
Practice Trading Exercise

Stock #1

You are already holding a long position in this stock. What are your thoughts about this position?

You are already holding a short position in this stock. What are your thoughts about this position?

You are contemplating a long position in this stock. What is your decision and what factors entered into
that decision?

You are contemplating a short position in this stock. What is your decision and what factors entered into
that decision?
Stock #2

You are already holding a long position in this stock. What are your thoughts about this

You are already holding a short position in this stock. What are your thoughts about this position’?

You are contemplating a long position in this stock. What is your decision and what factors entered into
that decision’?

You are contemplating a short position in this stock. What is your decision and what factors entered into
that decision’?
Stock #3

You are already holding a long position in this stock. What are your thoughts about this position?

You are already holding a short position in this stock. What are your thoughts about this position’?

You are contemplating a long position in this stock. What is your decision and what factors entered into
that decision?

You are contemplating a short position in this stock. What is your decision and what factors entered into
that decision’?
Stock #4

You are already holding a long position in this stock. What are your thoughts about this position?

You are already holding a short position in this stock. What are your thoughts about this position’?

You are contemplating a long position in this stock. What is your decision and what factors entered into
that decision?

You are contemplating a short position in this stock. What is your decision and what factors entered into
that decision?
Date High Low cost vol. F.C.

8/6 2210.4 2166.2 2166.2 4919 2175


8/9 2152.0 2122.5 2147.0 5493 2125-50
8/10 2166.1 2134,0 2134.0 5323 ---
8/11 2137.6 2114.4 2114.4 4943 2125
8/12 2134.0 2113.0 2113.0 5044 ---
8/13 2147.1 2114.0 2138.6 447 I ---
8/ 16 2185.6 2158.6 2158.6 5595 2175
8/17 2301.0 2180.1 2301.0 9328 2300
8/18 2350.4 2301,4 2301.4 13407 2350-25-50-25
8/19 2346.0‘ 2302.4 2320.6 7870 ---
8/20 2417.6 2329.6 2413.1 9662 2400
8/23 2465.6 2396.6 2465.6 1I142 2450
8/24 2463.4 2424.2 2439.6 12267 2425-50
8/25 2506.1 2442.I 2482.6 10691 2500
8/26 2543.4 2482.6 2504.I 13848 2525-00
8/27 2504.1 2460.6 2478.6 749 I 2475
8/30 2503.0 2442.4 2503.0 5979 2450-500
8/31 2557.1 2507.6 2541.6 8709 2550
9/1 2555.I 2486.4 2498.4 8376 2500
9/2 2574.4 2488.4 2561.I 7511 2550
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Practice Trading Exercise C

Having made your initial analysis of the market, does an immediate turn appear likely? If so, what factors
lead you to make this conclusion?

If you do not believe that an immediate turn is indicated, begin posting the data and make note of at what
point you believe a turn is indicated,

What happened on the day noted above or during the days leading up to that date that leads you to believe a
turn is likely at this point?

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Practice Trading Exercise D

Indicate which of the stocks in this exercise are stronger than the market, which are weaker and which
appear to be in harmony.

International T &T
Johnson & Johnson
Northwest Airlines
Warner Communications

Indicate which of the above stocks represents the best candidate for a long position and which is the best
candidate for a short position. In both cases, provide reasons to support the conclusion.

From the analysis of the general market what is the anticipated direction of the next move?

What evidence is there to support this anticipation?

Based on the analysis of the general market and the individual stocks, which stock should be traded now
and what type of position should be taken?