Timing individual issues to general-market turns

The last gate in the process

The archive builds the Wyckoff method as five ordered steps. The first step is to judge the market's position and stance. The second is to select issues that move with that market and that are stronger or weaker than it. The process then requires a built cause, tests readiness on vertical and figure charts, and times the commitment to an anticipated general-market turn.

Those five steps collapse into three construction questions: what operation to run, which issues qualify, and when a commitment is allowed.

Keep one index fixed

Anticipating a general-market turn requires one chosen index used consistently. Switching indexes mid-analysis is treated as a way to hunt confirmation for a preconceived conclusion. The general-market index is a single tape proxy, broad or narrow, kept fixed so the index forms the conclusion instead of being swapped to confirm a prior view.

A turn is defined as demand or supply overwhelming the other, or one side withdrawing enough to leave the other in control. That meeting or withdrawal is read on a vertical chart of the chosen index. A change of character is a shift in spread-and-volume behavior on that vertical chart that shows demand or supply being met or withdrawn.

The weekly-index walk-through

In the weekly-index walk-through, wide spreads and rising volume through week 4 read as healthy demand. Week 5 keeps a wide spread with reduced volume, a change of character. Week 6's sharp volume drop is read as demand withdrawal that can justify anticipating a turn and revisiting previously qualified short candidates.

Cause before an objective

Cause and effect is the rule that a possible turn on the vertical chart is not treated as an objective until a measurable figure-chart buildup exists. A vertical-chart warning becomes an objective only after a point-and-figure congestion supplies a cause.

The horizontal count is taken at the top of that area, multiplying horizontal divisions by box size, so 16 divisions on a 10-point chart equal 160 points for the first phase. The illustrated second phase adds another 16 divisions and 160 points, for 320 points and a 6580 objective, about 4.5 percent. A stated construction rule is not to take a stock whose potential is smaller than the market's own count.

Effort versus result

Effort versus result requires that volume flow and price movement stay aligned. Disharmony is used as a timing clue. A divergence is a split between volume effort and price result that argues the current direction is losing harmony and a turn should be considered.

Effort is tracked as volume flow on an optimism/pessimism index, adding buying-wave volume and subtracting selling-wave volume with 1 million shares scaled as 1.00. Result is the price wave. A new low in effort while the wave holds above its prior low is a divergence that argues for a change of direction.

The illustrative market wave is a narrow eight-name index of active, widely held leaders used as a miniature of the whole tape, not a broad average.