Wyckoff Wave chart of Accumulation

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Phase A is characterized by a prolonged decline to "preliminary support" (PS on the chart), which provides temporary relief before the "selling climax" (SC). That
climax is accompanied by sharply expanding volume as weak holders bail out in a panic. The climax is followed by an "automatic rally" (AR), suggesting the selling
has been exhausted, and then a "secondary test" (ST) of the climax lows, during which volume is diminished.
Phase B contains basing action characterized by a series of rallies and secondary tests. The "creek" on the chart basically refers to a trend-line connecting peaks
of said rallies. A "jump across the creek" is a "sign of strength" (SOS) that provides evidence a bottom has occurred and buyers are emerging. These "jumps"
occur in Phases C and D on the chart.
Also in Phase C, there's another sell-off and a marginal break of the selling climax lows. If such a test is accompanied by lower volume than that during the selling
climax, it could be a setup for a Wyckoff Spring, a bullish pattern detailed here in March 2001.
Following the spring (no. 8 on the chart) and those "signs of strength" in Phases C and D, there's another sell-off in Phase D to the "last point of support" (LPS),
after which this hypothetical example explodes higher.

Wyckoff Wave chart of Distribution

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Phase A
In Phase A, demand has been dominant and the first significant evidence of demand becoming exhausted comes at point 1 at Preliminary Supply (PSY) and at
point 2 at the Buying Climax (BC). (See the chart above.) It often occurs on wide spread and climatic volume. This is usually followed by an Automatic Reaction
(AR) and then a Secondary Test (ST) of the BC, usually on diminished volume. This is essentially the inverse of Phase A in accumulation. As with accumulation,
Phase A in distribution may also end without climactic action and the only evidence of exhaustion of demand is
diminishing spread and volume. Where Redistribution is concerned (a TR within a larger continuing down move), we will see the stopping of a down move with or
without climactic action in Phase A. However, in the remainder of the TR the guiding principles and analysis within Phases B through E will be the same as within a
TR of a Distribution market top.

Phase B
The points to be made here about Phase B are the same as those made for Phase B within Accumulation, except clues may begin to surface here of the
supply/demand balance moving toward supply instead of demand.

Phase C
One of the ways Phase C reveals itself after the standoff in Phase B is by the sign of weakness (SOW). This SOW is usually accompanied by significantly
increased spread and volume to the downside that seems to break the standoff in Phase B. The SOW may or may not fall through the ice, but the subsequent
rally back to point 11, a last point of supply (LPSY) is usually unconvincing and is likely to be accompanied by less spread and/or volume. Point 11 gives us our
last opportunity to cover any remaining longs and our first inviting opportunity to take a short position. An even better place would be on the rally testing point 11,
because it may give us more evidence (diminished spread and volume) and/or a more tightly defined danger point. An up-thrust is the opposite of a spring. It is a
price move above the resistance level of a trading range that quickly reverses itself and moves back into the trading range. An up-thrust is a bull trap it appears
to signal a start of an up-trend but in reality marks the end of the up move. The magnitude of the up-thrust can be determined by the extent of the price move to
new highs and the relative level of volume on that movement. Phase C may also reveal itself by a pronounced move upward, breaking through the highs of the TR.
This is shown at point 11 as an Upthrust After Distribution (UTAD). Like the terminal shakeout discussed earlier in the accumulation schematic, this gives a false
impression of the direction of the market and allows further distribution at high prices to new buyers. It also results in weak holders of short positions surrendering
their positions to stronger players just before the down move begins. Should the move to new high ground be on increasing volume and relative narrowing
spread and then return to the average level of closes of the TR, this would indicate lack of solid demand and confirm that the breakout to the upside did not
indicate a TR of accumulation, but rather a formation of distribution. A third variation not shown here in schematic form would be an up-thrust above the highs of
the trading range with a quick fall back into the middle of the TR, but where the TR did not fully represent distribution. In this case, the TR would likely be too wide
to fully represent distribution and there would be a lack of concentrated selling except in the latter portions of the TR.

Phase D
Phase D arrives and reveals itself after the tests in phase C show us the last gasps or the last hurrah of demand. In Phase D, the evidence of supply becoming
dominant increases either with a break through the ice or with a further SOW into the TR after an up-thrust. In phase D, we are also given more evidence of the
probable direction of the market and the opportunity to take our first or additional short positions. Our best opportunities are at points 13, 15, and 17 as
represented on our Schematic 2. These rallies represent Last points of Supply (LPSY) before a markdown cycle begins. Our averaging in of the set of positions
taken within Phases C and D as described above represent a calculated approach to protect capital and maximize profit. It is important that additional short
positions be added or pyramided only if our initial positions are in profit.

Phase E
In Phase E, the stock or commodity leaves the TR and supply is in control. Rallies are usually feeble. Having taken our positions, we must monitor the stocks
progress as it works out its force of distribution. Successful understanding and analysis of a trading range enables traders to identify special trading opportunities
with potentially very favorable reward/risk parameters. When analyzing a TR, we are first seeking to uncover what the law of supply and demand is revealing to us.
However, when individual movements, rallies or reactions are not revealing with respect to supply and demand, it is important to remember the law of effort

versus result. By comparing rallies and reactions within the trading range to each other in terms of spread, volume, velocity and price, additional clues may be
given as to the stocks strength, position and probable course. It will also be useful to employ the law of cause and effect. Within the dynamics of a TR, the force
of accumulation or distribution gives us the cause and the potential opportunity for substantial trading profits. It will also give us the ability, with the use of point and
figure charts, to project the extent of the eventual move out of the TR and help us to determine if those trading opportunities favorably meet or exceed our
reward/risk parameters.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

DISCLAIMER:
The information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as
representation by our firm. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Trading Nuances
Gary Fullett is a former CME floor trader. His experiences on the floor taught him a number of nuances that have really helped him in
trading. Below are a few things he found helpful to remember when trading:

Never place your orders at even numbers. Traders tend to be lazy so use even number when placing trades. Its easier to
calculate profits and losses with even numbers. If you want a better chance of getting a fill, place your order a tick or two above
or below the even number. For example, if you want to buy an S & P at 1135.00, place the buy at 1135.25 instead. You may be
giving up a tick, but many times reversals can happen at even numbers and you wont be filled at all. Its better to be sure of a fill
and give up a tick than to lose a chance at the trade.

Never place stops close to support and resistance areas. This is where slippage becomes maximized and markets tend to probe
those areas.

The opening range tends to be the high or the low of the day within several hundred dollars. The market opening is based on
news from the previous evening. After the opening, the market tends to trend in one direction or the other.

Bonds tend to trade in 1 full point increments either from the high of the day or the low of the day. After the first hour of trading
for the day, if the high, for example is 11720 and the low is 11704, we can expect a move to either 11804 or 11620.

If the market is against you and you have a lot of anxiety and fear, many times, taking a deep breath before liquidating your
position is helpful. Genereally, when you have these feelings, many others are experiencing the same feelings so it tends to be
a buying or selling climax. By waiting a few minutes, if you need to get out, you generally get a better price.

Mondays close, many times, tends to be the high or the low for the week.

If you are trading poorly, cut down on the amount of contracts you trade. Do not make your stops smaller. Making your stops
smaller may jab you out of the market in an area where you would not normally have gotten out.

Do not use equity stops. Use stops that, if hit, will be hit because you are dead wrong with your position.

If you trade on a daily time frame, your stop loss should be on a weekly time frame. If you trade on a weekly time frame, your
stop loss should be on a monthly time frame. This will help in not getting stopped out on a spring or upthrust.

When in a position, you should say to yourself, if I didnt have this position, would I put a position on. If the answer is no, you
should get out of the position immediately. You can always get in again at a later point. Your first loss is your best loss.

Trading is very psychological. Do your best not to lose money on a Friday. There is nothing worse than having to relive that
trade all weekend. Monday is a critical day as well because its a confidence builder for the week.