Lesson / WY-04-18
Preliminary Supply (PSY) usually follows a mature advance and marks the first area where demand meets noticeable supply. It is the first opposing force strong enough to leave a mark on the trend: buyers can still accept higher offers, but need more trading for the same gain or cannot retain the whole advance. Trading may increase and new highs may still appear, but more substantial declines begin at high prices. PSY is not the ultimate high, does not guarantee the advance is about to end, and does not mean sellers already control the market.
Course content is for learning and research only. It is not investment advice.
Read the Chapter ↗Timestamps
8 lessons · Chapter contents
01The Relationship Between Distribution Phases and Events↗02Phase A: Has the Advance Stopped?↗03Preliminary Supply: PSY↗04Buying Climax: BC↗05Automatic Reaction: AR↗06Secondary Test: ST↗07Establishing and Revising Preliminary Boundaries↗08Climactic Stopping and Gradual Loss of Upward Effectiveness↗Observe the market: start with context and place price within its structure.
Understand structure: compare supply and demand, and let evidence support or revise your hypothesis.
Form a view: define risk limits and know when to reassess.
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Phases B and C: Upthrusts, UTAD, and Demand Tests
Phases D and E: SOW, LPSY, and the Developing Decline
