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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 351 To 355

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We see two distribution caps as the tops of the market, points A and B. The bottoms we saw recently
were a direct result of these two distribution caps. It was suggested that this area could be a consolidation.
But if you think logically about it, it can't be a consolidation because in order to consolidate, you
need to take profits from that move first, then different groups think they can push it higher, and
then they consolidate .

• Point C : Here we can see that previously we mentioned a large downbar closing at or near the low
with a slight increase in volume as it approaches an old support area is a weak signal, not
stopping volume. Before we see stopping volume, the market must fall enough to attract
professional buyers to step in.
, and they will also have short positions.

• Point D : Monday. There is some expected support given to us by

trend line. We note the range has narrowed, closing in the lower quarter. We have an automatic
signal saying it is a test after a shakeout . We do not pay much attention to this because of the
weakness right behind and expect the market to move sideways if possible.
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• Point E : Here we have a blue upbar as it tries to push above the trend line. Volume is almost
non-existent. So this bar confirms what we expected - a sideways market.

• Point F : Here we have a red downbar closing near the low with a slight increase in volume.
What we need to see is clearly low volume on these downbars if we want any bullish
movement.
• Point G : Here is another blue upbar, again low volume. Therefore, we do not expect any
bullish movement at the moment.
• Point H : Here we have a red downbar closing in the middle, but again the volume is too
high to show any bullishness. Now as you can see from this chart, it is not difficult to
interpret the movements. You have to trust what you see on the chart and avoid being fooled
by good advisors, rumors, news…. There seem to be two trend lines in the lower part of the
chart. One is the short-term trend, one is the long-term.

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Looking at the hourly chart if you are looking for more information is a good idea.

• Point A : We can see some support there, a red downbar closed

in the middle and an automatic signal.
• Point B : We have a red arrow warning that supply is present. We note that this red arrow has
no attempt to test, which as we know is a bearish view. If the bulls were serious, they
would test it. In other words, you would see a narrow range downbar, closing in the middle
or high and low volume. They know the market is weak and they are afraid to do it.
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• Point C : Too much volume. You don't want a lot of volume on these upbars. This is supply
pouring into the market . Again, no tilt or test, which they would do if they were bullish.

• Point D : We can see that this bar has no demand.

• Point E : Here we have a blue upbar. They clearly pushed it up in a meaningful way.
knowing the market is weak. We can see that it is true because there is no demand. They
know the supply and demand situation as we have roughly described.
• Point F : Here we can see a small upthrust session as they push it higher to catch stops,
misleading as many traders as possible.
• Point G : Here we have the principle just discussed - a large amplitude downbar closing near
the low with increasing volume. This is not stopping volume. This is potential weakness.

As we all probably know Gavin Holmes has been sick with the flu for a week now. We hope he gets better.

Tom Williams

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As we have told you before, the cash market is of great importance to us because this is where the
liquidity, the power, the value is. The only thing that can cloud your judgment is that the professional
money that operates in the market will also trade in the futures market. And it is logical to assume
that they may be tempted to push the futures market up or down based on their understanding of
the cash market activities.
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• Point A : A convergence of two lower trend lines. It is important for us to recognize this
because it will act as resistance to the market both up and down.

• Point B : Monday. Here we see a very large amplitude downbar closing above
below the low with a very slight increase in volume. Usually, this is a weak signal and although
the market may move up and down in the near future, this will have an impact in the long
term. We note quite positive news about the recovery that the world economies are making.

• Point C : Tuesday. Here we have a blue upbar. It is not ready to go anywhere yet as there is
little to no volume behind the move and the range is narrow, indicating little enthusiasm for
the upside at the moment.
• Point D : Wednesday. Here we have a principle as we know a test session.
They don’t show up too often on the S&P daily chart, but they do. You should be alert
because the market will almost certainly move up after one of these tests on the daily chart.
It can’t be a failed test because you’re oversold and there’s some support in the
background . The computer also jogs your memory by telling you it’s a test after a
shakeout, and it’s definitely here. These are opportunities you can definitely make money
on with little effort on your part.
• Point E : Thursday. Here we have a large amplitude upbar that closes right at the high.
However, we need to treat it with caution as there is a hint of no demand seen by the low
volume.
• Point F : Friday. Here we have another blue upbar. Notice how this bar gapped up showing
that the market needed to push as high as it could. It hit the trend lines and also tried to
push up past the highs of a couple of bars on the left. However, it barely managed to go
higher because look at the volume. There was no demand. There is a possibility that they
are pushing the market up intentionally to confuse as many traders as possible, or more
likely the market will go sideways.
We need to see a principle emerge that we will act on, showing that the market will go up
or down. But the odds are temporarily tilted towards lower prices.

Don't forget the strong test we saw at the bottom of this chart. This will have a big impact on the
Index at some point. These strong or weak signals don't go away immediately but we seem to
have a mixed bag at the moment. When you see large down bars coming off the top, this is not
stopping volume, this is weakness. Remember, the market needs to entice the professional money
back into the market to see real stopping volume.

Tom Williams
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We can see we are oversold at point A. That is, we are below the trend lines, where we have two
lines showing, both valid at some point. It would be unusual if the bottoms were not recognized
by the program because at this point, it is following instructions given to the programmers. It is not
listening to the news, it is not having any gut feelings and it is not being given advice. It is just following
instructions given to it and it would be unusual if the bottoms were not recognized.

• Point B : This is Monday. It looks like a test attempt, but the market will be influenced by the
strength that appeared at Point A and how quickly the market pushed higher last week. If
you study an intraday chart, you will see the test more clearly.
• Point C : Here we have a large amplitude upbar that reacts strongly to the strong signals seen
at points A and B.
• Point D : Here we have a clear pattern that seems to be repeating itself several times recently.
It is a test session. While not all is clear on this chart, it is a narrow range red downbar,
closing near the mid-level and on relatively low volume. This is a strong signal of higher
prices.
• Point E : Here we have a blue upbar. It also looks like it tested the market. It has what we call a
lower tail. Average volume. We can expect higher prices.

• Point F : Here we have a blue upbar that has narrowed in amplitude, and volume appears to
have dropped somewhat. This would tend to indicate that demand has decreased at this
point. If you look at the stocks that make up the index, it is surprising how much information
you can get from these individual stocks.
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• Point A : This seems to be a very common principle that comes up frequently.

around the markets. We see a red arrow in the form of weakness, usually without demand.
If this is followed by what we call a test session, that is, a narrow range red downbar, closing
near the mid-level, lower volume than the previous two bars, it is a very strong signal. If you
can catch these, you will be rewarded handsomely.

Following our comments on two commodity markets, natural gas and corn, this prompted a
response from Tim in Australia, who seems to know what he's talking about, and here it is.
The message he sent us appears in the VSA Club forum with information that may be useful to
you. Thanks to Tim for this information: - Tom.

First of all, I want to say that I really appreciate all of your weekly webinars.
Due to time zone differences I can only review. But each week I learn more and his straight talk approach to volume
spread analysis makes everything clear and easy to follow.

Regarding the issue with the grain chart that appeared near the end of this week's session, I
thought I could shed some light on this. It is an issue that exists in many soft commodity charts
in EOD software that use real-time data.

Volume is true for the session, but bars only show fixed trading price movements. The fixed
session runs from 8:30 AM to 11:15 AM Chicago time, but there is an electronic session that runs
from 7:00 PM to 7:45 AM. A lot of price movement occurs during this time. Time data
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This problem is encountered with all markets that have separate fixed trading charts available, including currency
futures markets, bond futures markets, and grain markets.

Best regards

Tom Williams
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 356 To 360

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• Point A : This was Tuesday last week. The market was closed on Monday. Here we can
see a very clear weakness signal. It is a blue upbar closing far from the high with a very
narrow range. Volume is average but here the price range is telling. There is weakness in
this market.
• Point B : Wednesday. Here we have a red downbar. This bar looks weak because it has an
upper tail. I don't like bars with upper tails in a weak market. So we have to treat it with
caution.
• Point C : Here we have a blue upbar that closes near the high. All very well but look at the
volume. It is lower than the previous two bars. This is sending us a signal that there is little
to no demand from the professional side of the market.
• Point D : Friday. Here we have a red downbar. It certainly doesn’t look like a strong bar
as it also has an upper tail. Volume is just below average so there is very little strength in
the market at the moment. But as you can see by the trend line marked point X above. So
this particular chart doesn’t tell us much. , It is likely to go higher than the trend line.
However, if we look at a 5 minute chart of the S&P500 futures market, there is a strong
possibility that it is showing strength, which of course, could be temporary.
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Here we have a 5 minute chart of the S&P futures market.

At point A we see what appears to be stopping volume. In other words we see heavy volume/
activity on a downbar which should indicate professional money has entered the market. The
result of this is a very slow move up for four or five bars. There is a mini upthrust at the top (point B )
but that doesn’t bother us as we are expecting a test of the stopping volume . The market then
slides down to point C. Now here we notice the market is falling back down to the same level of
stopping volume and we draw a horizontal line across the chart to make it clear to you. If the market
hits that line, or is in that area and the volume is very low, you can expect higher prices. We are not
saying there will be a bullish move, but there is potential for higher prices. Of course, this type of
analysis is aimed at what we call scalpers. A fund manager who is more concerned with monthly or
yearly performance may be looking at longer time frames for his analysis.

Tom Williams
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• Point A : You will see that when these markets are sideways, there are often clues as to
which direction they want to go. One of those clues is a narrow range downbar that
closes near the mid or high and on low volume. Here we see such an automatic
signal.
• Point B : Here we have a red arrow. However, we tend to ignore this arrow if the next bar
is up. In fact on different timeframes, it shows a test bar.

• Point C : Here we have a large range upbar. It has a red arrow telling us there is
supply around. However, a certain amount of supply at this stage is acceptable.

• Point D : It continues up, a blue upbar closes far above the high. Here we have a more
serious weak signal. We note that the range has narrowed somewhat, but the signal
tells us it was a real overbought session. This could be a serious weak signal, and
ignoring the signals is at your peril.
• Point E : Here we have a blue upbar. The interesting thing about this bar is that it has
an automatic signal telling us there is no demand. Of course, there is no demand.
Professionals have seen a large supply on the previous two bars. So they are not
willing to participate in any upward movement at this stage.
• Point F : Here we have to be careful because we have what looks like a test. In other
words, a narrow range downbar, closing in the middle, low volume. However, let's
ignore what looks like a test as we have weak signals right behind us and here
we have multiple weak signals, on the previous bar.
The next bar is a downbar anyway, giving us a test
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failed. Notice, the market also tends to curve up at the top, giving us a mushroom shape .
The market falls and at point G , we have a classic big shakeout. They push it down
based on so-called bad news (Russia and Crimea).
We can see this as a potential shakeout, a quick move down only to reverse and close
high with a large margin. If there was any potential for higher prices at this stage, these
shakeouts would certainly encourage it to occur. That plunge would certainly trigger
thousands of stops.
If there is any potential for higher prices, these shakeout sessions will certainly support and
encourage this.

Tom Williams

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• Point A : We have already mentioned this bar in the previous newsletter. It is a red arrow when
the market is in an uptrend. But the main observation is the next bar - point B. This
principle you see very often. It is a very good way to surf and make quick money. It is a
narrow range downbar closing in the middle, with lower volume than the previous two
bars. This is a classic test showing higher prices.

Point C : Here we have another red down-bar. Note the spread is narrow, volume is lowish. The
only thing that does not make this a perfect is the fact that it closed on the low rather than the
middle or high. But even so it is a sign of strength.
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• Point C : Here we have another red downbar. Note the narrow range, volume
low. The only thing that doesn't make this bar perfect is that it closes at the low instead of the
middle or high. But even so, it's still a strong signal.
• Point D : Here we have an upbar. However, there is a lot of supply on this bar.
Look at the volume and on that volume it closed in the middle. Some group or professional
liquidated some of their positions that day.
• Point E : The sudden supply inflow into the Dow Jones has the other professionals worried,
who still have positions. So here we have a classic test they created - a narrow range
downbar closing in the middle, low volume. We have seen from past experience that you
get these tests after the red arrows, which means higher prices.

• Point F : We move to point F (Monday). It is clear that professional money has

fully aware of the supply pouring into the market at point D. So they tend to have a large test
where they push the market down hard only to close in the middle on low volume. This is
a typical strong signal in a bull market. There is little to no professional supply in the
market resulting in low volume and a close in the middle.

• Point G : Tuesday. We have a large range upbar that closes at the high. This was done
intentionally by the professional side of the market to stop as many long traders as possible,
and of course, to cause panic among any short traders .
• Point H : Here again we have a classic strong signal. A red downbar
narrow range, low volume, closing at or near mid-range.
• Point I : Thursday. Here we have a blue upbar but note the narrow range, little to no demand.
We have a yellow information box to alert you to this.

• Point J : Friday. This is a very similar upbar. We note the narrow range, the close in the middle
and the low volume, which creates a box that says there is no demand. The market is
moving up hard and you can expect lower prices to come, but watch this test as we
have described a few times, especially if you are just a swing trader.

Tom Williams
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• Point A : We refer to last Friday, where we know the market was struggling to move up
with no demand and point A clearly looked like serious weakness.
We have an automatic signal telling us there is no demand. So we predict lower prices.

• Point B : Monday. This was a very clean test. It was even on low volume. You can
clearly expect higher prices with a test if the market is bullish. However, we had some
significant weakness last week. We are overbought.
• Point C : Now, this is a red downbar. So, it means the test failed. This is a serious weak signal. The
reason is that the professional money could have seen that test and if it was really bullish, they would
have gone long. If they refused to go long, it means the market must have been bearish at that
point. This is a classic example of a failed test on the previous bar.

• Point D : Once again we have what looks like a test session. In other words, a
narrow range red downbar, closing near the high. If the market had turned bullish, you
could clearly expect higher prices. However, it is safe to say that the market is definitely
going to go up based on the test we saw earlier on Monday (point B).
We are still seriously overbought.
• Point E : Here we have a large amplitude downbar closing near the low. So,
The previous bar was again a failed test. Let's expect lower prices. Here we have a
large range downbar. However, I never trust bars with upper tails, which is a weak signal
contained in the bar. In other words, its high is higher than the high of the previous
bar. We have a weak signal automatically seen by the yellow box above. There is an old
saying in the markets
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stock market: “if you see a large amplitude downbar as it approaches a previous
support area, seen with a trend line, with a slight increase in volume is usually a
weak signal.”.
• Point F : Friday. Here we have a red downbar that has narrowed the range, but it
has an upper tail, which is actually a contained weakness. Because if you check
on a smaller time frame, it could have gone up there without demand. Notice
how the trend system works. When you see all these red downbars, it means
the professional side of the market is in control, and you can still expect
lower prices instead of higher prices .
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 361 To 365

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The Kagi chart shows bullish volume or bearish volume. The bearish volume is shown in red - it is
bullish volume on downbars while bearish on upbars. The bullish volume is the opposite - bullish
volume on upbars while bearish on downbars. It changes rapidly without warning the viewer.
There is no average or anything applied to this.

Gavin Holmes is going to Moscow this week to meet Grigory, a Russian programmer. We wish him
luck, as he will be doing a few webinars.
We are reluctant to make any stock picks this week, as you need to pick a stock when the Index is
really strong or looks like it is going up. Things are looking pretty weak right now.
Tom Williams
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• Point A : This is last Friday. You would expect the market to build what we call a cause for
it to go up. It is not obvious on this chart except we have a downbar near the lower trendline
and the range has narrowed. Volume is just below average. Now you could say there is a
cause, but to see it you have to look at at least the four-hour chart. But the large range
down we saw on the previous bar is a weak signal so we have to treat it with caution.

• Point B : Monday. Here we have a large range upbar that closes near the high. We note that
volume has dropped so there is not much demand contained in this bar.
• Point C : Here we have a blue upbar but note the narrow amplitude and no
much of the upside interest is seen by modest volume. you could even call it low volume.

• Point D : Wednesday. Here we have a significant red downbar. It almost looks like an attempt
to shake off the market. It closed near the middle, volume is still average, but there
should be some support there for it to close in the middle.
• Point E : Thursday. This is a large range upbar that closes near the high. We have an
increase in volume, but certainly not too large.
• Point F : Friday. Here we have what looks like a pretty clear weak signal. It creates an
automatic signal that says this is an upthrust session after weakness . Please read
the dialogs because we are not hiding information from you. We have no secrets
and the market has no secrets other than it moves based on supply and demand,
when you know how to read it . Friday's bar was pushed up deliberately to catch stops
and confuse as many traders as possible, only to collapse at or near the low, and note
the huge volume. This is supply. The very parameters I
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just described to you has generated an automatic weakness signal. So we have a mixed
bag here. We have some strength in the background and weakness is seen here today,
Friday. This weakness allows us to draw a line through the two most recent peaks. This
will tend to push the indicator down between these two trend lines.

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This is a Kagi chart. The green bars show bullish volume and the red is bearish. Bullish volume is
volume that increases on upbars while decreasing on downbars. This is why in a bull market you
can see tests, shakeouts, swing lows and similar strong signals. Bearish volume is the opposite.
It shows volume increasing on downbars while decreasing on upbars. This is why you get
demandless upbars, upthrusts, swing highs and the like. There is no delay on this chart. What
you see is what you get.

Tom Williams
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Here we have the Dow Jones Industrial 30 cash market, which is part of the S&P500.

• Point A : Last Friday. We have pointed out that this point is a clear weakness signal. In
other words, a very clear upthrust session allows us to draw a trend line from the two
most recent peaks. This combined with the long-term trend line at the bottom of the
chart shows that the two lines are converging. Both represent potential support or
resistance .
• Point B : Monday. Let's look closely at Mondays for a clue as to what might happen.
Here, the market pushed up only to close in the lower quarter.
We note the low volume. The computer colors it pink to remind you of this.
• Point C : Tuesday. Here we have a blue upbar that closes in the upper half. However, look
at the volume. There is definitely no demand as the volume is lower than the previous
two bars. So compared to the previous two bars, we have clearly low volume. We
basically have three weak bars.
• Point D : Here we have a red downbar that closes right at the low. Again volume is just
average. This is a weak bar because it has what we call an upper tail. The
professional money saw the weak bars before, they pushed it up to catch stops and
confuse as many traders as possible before closing at the low.

• Point E : Thursday. Here we note, we have a narrowing of range on a downbar, closing

slightly above the bisector point. There is an increase in volume so
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There seems to be some buying pressure on this bar. But there is almost no what we
would call stopping volume or over action.
• Point F : Friday. Here we have a blue upbar that reacts to the small amount of strength that
was present yesterday. But this bar closes below the bisector point and look at the low
volume. There is no demand in the market and that is an additional weak signal. The market
could push up to the upper trendline again, but it seems to be following those two converging
trendlines, and will basically slide down.

Tom Williams

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• Point A : We looked at this bar last week. It was a range downbar.

narrow range downbar, close in the upper quadrant. We note the fairly heavy volume and recognize
that there must be some support in the market for this to happen. A narrow range downbar is created
with a bottom supported by buying pressure and a close in the upper quadrant confirms this.
• Point B : This is what happened on Monday. A large upbar closed near the highs as it made
a serious push above the upper trendline. I think we mentioned in last week's newsletter
that don't be surprised if the upper trendline gets hit.

• Point C : Tuesday. All is not well in the garden.

We have an upbar but note the narrowing of the range and the decrease in volume. The
computer has colored it pink to remind us of this event. We have a yellow box to preserve
this view.
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• Point D : Wednesday. Once again we have an upbar but this time the range is even
narrower. This bar creates an automatic signal telling us there is no demand. You
certainly wouldn't think of going long when you are overbought and have a narrow range
upbar with an automatic signal warning us of weakness.
• Point E : Here we have a red downbar but with very little change from the previous bar's
close. But this is still a weak bar because it has an upper tail. That means on a smaller
time frame it could have gone up there with no demand, confirming weakness.

• Point F : Friday. There is an old saying in the chart reading world: “when you see a
large downbar closing near the low as it approaches an old support or
resistance area with a slight increase in volume, it is a weak signal. ” (here seen by
the upper trendline). Note that this bar also has an upper tail. That must mean they
pushed it up during the day to intentionally catch as many stops and confuse as many
traders as possible. They were fully aware of the weakness at that stage, which is quite
evident on the previous two bars. The two trendlines drawn are still valid, and we note
that they are converging. The closer they are to the so-called arrowheads, the more
vulnerable they are to a sudden move away from it as it shows supply and
demand are becoming more balanced. The market does not like this as it prevents
movement .
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 366 To 370

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Here we have the Yen against the Dollar.

• Point A is a long term trend line that has been in operation for a while. This is the trend line
the lower of the two lines.
• At point B we are heavily oversold. This is a weak signal though. There is no signal on that
particular bar on this time frame.
• Point C : Here we have a clear shake-off, or some people might even
call it a spring board. They are accumulating on the downside , seen by the red bars with
little to no selling pressure. This gives them a chance to push it down to catch stops, misleading
as many traders as possible and on this high volume it closes near the high. It is a strong
signal.

• Point D : Here we have a red downbar. An automatic signal appears saying it is an upthrust. But
it cannot be an upthrust from our perspective because a true upthrust must have
weakness, not strength in the background (seen on the shakeout three bars prior).
We note the low volume. There was little to no selling pressure on that bar.
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• Point E : we see a red downbar but definitely not bearish.

Notice it was a very narrow range downbar, there was little to no selling pressure on that bar
and we haven't forgotten the shakeout six bars back. Now the market has very strong upside
potential.
• Point F : Here we have a large range upbar. Notice they pushed it down early in the session
to catch as many stops as possible, shaking off as many traders as possible before quickly
turning to close near the highs. There was clearly bullish volume on this bar.

• Point G : Here we have another blue upbar as it pushes up above the lower trendline. The
market now looks bullish. That said, don’t be surprised if you see a sudden test – a narrow
range red downbar that closes in the middle or high on low volume, indicating there is little
or no supply left at these levels.

Tom Williams

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• Point A : If you look at last week’s news, point A was Friday and we were expecting lower
prices. The reason of course is because it was overbought. It was a large range downbar
that closed near the lows with a slight increase in volume, but notice it had an upper tail. This
usually marks a weak bar because on a lower time frame you can see it go up with no
demand before they reverse.
• Point B : Monday. Here we have a red downbar closing at the low. Note
Volume increased slightly and there was absolutely no attempt to test higher prices at the open.
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door. So this definitely looks like continued weakness. In other words, it's definitely
not bullish at this point.
• Point C : Tuesday. Here we have what can be analyzed as a test session. However, it can
be said that it is far from a perfect test session because there is an upper tail.
Relatively speaking, its high is much higher than the close of the previous bar.
Although the volume is lower than the previous two bars, it is average, not exactly low.

• Point D : Here we have a large upbar that closes right at the high. Of course, it is designed
to trip you up by making you think that your previous analysis at points A and B was
wrong. Notice however, we have hit the upper trendline and there is not much bullish
volume on this bar. Remember, bullish volume is volume that expands on upbars while
decreasing on any downbars.
• Point E : Thursday. Here the market is starting to show its true colors.
We have a large red downbar that closes low and note the slight increase in volume. As
the saying goes: a large red downbar that closes low with a slight increase in volume
as it approaches an old support area is bearish, not bullish.

• Point F : Friday. Here we have a red downbar that closes low and note again the slight
increase in volume. Remember, bearish volume is increased volume on downbars, but
not too much. It pushes down past the upper trendline that has been in place for a
while. We note the range has narrowed somewhat, so there may be a little support there,
which is understandable. So overall, the market looks weak.
However, they are very devious and will try to fool you. Look at the action on Monday
and Tuesday for more information on what will happen.

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If we look at the weekly chart here, it gives us a pretty good idea why the market is behaving the way
it is. We see at point A it is a shakeout, where we can see two automated , signals. One signal tells us
demand is exceeding supply, the second signal tells us it is a shakeout, which is absolutely correct.
Remember, a computer has no emotions. It is just reading facts, which are also completely available
to you. The market goes up to point B.

• Point B : Here we have a test. I must admit it is not 100% perfect but still a test in a bull market.
Remember, the test is basically a red downbar with bullish movement in the background right
before. Here we see a classic narrow range red downbar and look at the low volume -

There is absolutely no selling pressure in the market, even though we are looking at a whole
week's action here.
• Point C : Here we have an upbar but notice the range has narrowed somewhat and volume
has increased. It has encountered some supply this week.
• Point D : Here we have a red downbar, but look at this bar and
we appear to have what we call a swing high, which is a weak signal. The pros saw supply at
point C. Although the next bar was up, there was a drop in volume. This was not bullish
volume but bearish volume so that the market then reversed and closed lower than the low of
the previous bar.
The computer detected this and generated an automatic signal telling us it was a reversal
top and a weak signal.
• Point E : Professional money has fully recognized the weakness on the inverted bar
afternoon but still enough life in the market to allow for three upbars, but the third upbar is a
classic weak signal known as an upthrust. An upthrust is a deliberate move from the so-
called professional money. They know the market is weak, so they push it up, maybe even
based on good news. They put stops above the market, misleading many traders into
thinking the market is now bullish, of course, causing panic for any traders who were short to
cover their positions, only to have them collapse at the lows. We have an automated signal
that tells us this. But remember, the background information is essential to your analysis.

• Point F : Here we have a large range downbar that closes low. There is a slight increase in
volume. Remember that is bearish volume - increasing volume on downbars. With the
upthrust session in the background, you can clearly short these markets with the utmost
confidence.

Tom Williams
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• Point A : This is last Friday a week ago. Here we can clearly see there is a red downbar
that has narrowed with increased volume, but we are oversold. With the increase in
volume, closing far from the low and the narrowing range, this must represent some
support in the market.
• Point B : Monday. We have a blue upbar that reacts to clear support on the previous bar
and there is an automatic signal that says this is stopping volume. Stopping volume
means professional money has entered the market .
• Point C : Tuesday. Here we have a large range upbar but notice this bar has what we call a lower tail. This
means the market must be tested on the intraday charts. A reversal and close near the highs would indicate
higher prices.

• Point D : Here we have a blue upbar but notice the narrowing amplitude and the block
The quantity also increased significantly. There must be some supply present.
• Point E : Thursday. We have a narrow range upbar closing far from the high with volume
very low volume. This is definitely no demand, if you can trust the data being given to you.
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This is an interesting chart.

• Point A : Here we have a large amplitude downbar closing near the low with volume
very large volume marks the downside. We have weakness right behind us. This is a weak
signal.
• Point B : Here we have a blue upbar but it seems to be pushed up without demand, closing far
below the high. This bar is depicting weakness on the previous bar.
• Point C : Here we have what looks like a test session, but remember the automatic signal will not
be validated if the next bar is not sideways or up (please read the dialog).

• Point D : This is a large amplitude red downbar, the volume has increased significantly, closing
quite far from the low. We have an automatic signal telling us it is stopping volume.
• Point E : We have a rally to point E. Notice we have a very narrow range upbar, closing far
from the high on low volume. This is definitely not demand. The computer recognizes this
and gives us an automatic signal.
• Point F : Here we have a classic weak signal, an upthrust session. We have an automatic signal
telling us this. You can expect lower prices.

Tom Williams
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 371 To 375

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• Point A : Monday. We can see an upbar with no apparent demand. We have an automatic
signal telling us it is weakness. There is a point here we must remember. The professional
money can see the position of supply and demand that we assume even better than we do
and they will find a way to squeeze every last drop of blood out of this move, or any move.

• Point B : Tuesday. We can see here they pushed it up. If there was any lack of demand
signal present on the previous bars, it would certainly be very evident on this bar. Look at
the low volume - clearly lower than the previous two bars and since we are using relative
volume, this is a true lack of demand upbar. We have to treat it with caution though
because we are in the middle of a trading range and there appears to be a large shakeout
at the previous bottom. Shakeouts are a ploy to get rid of as many traders as possible,
clearing the way for potential higher prices, but this is clearly a lack of demand upbar
and a weak signal.
• Point C : Here we have a red downbar but it is far from a test session.
ideal because you have what we call an upper tail. A proper test session does not look
like that and note the volume is not exactly what we might call low. A
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A proper test session following any bearish without demand, its high will not be higher
than the close of the previous bar. Please remember this.
• Point D : Here we have a black bar, meaning it closed at the close of the previous bar. This
bar also has a little bit of an upper tail. So it is definitely not strength.

• Point E : Friday. Here we have a large amplitude downbar that closes quite far from the low.
Volume is up to average. You need to study the market action on Monday and Tuesday to
find some signals that the market will go up or down.
You are vulnerable because you are in the middle of a trading range and there was what
looked like a significant oversold shakeout at the previous bottom, and now we have no
demand with a slight arc up, which we know is depicting some weakness.

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• Point A : Here we have a large amplitude upbar with an automatic signal saying that supply
is stepping in.
• Point B : A large red downbar closed at the low. We also note
This bar has an upper tail and a slight increase in volume. This bar confirms the weakness
on the previous bar. You could almost call this a reversal top.
• Point C : Here we have a narrow red downbar. It almost looks like a test but with a lot
of volume. Remember, a successful test will have lower volume than the previous
two bars and the swing high you see on the previous two bars is a pretty serious
weakness signal. They are trying to hold the market as long as possible to continue
selling in a weak market.
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• Point D : This half-hearted attempt to test the market allowed them to have a classic upthrust session,
known in our circles as an upthrust after weakness . We also have an automated signal that tells us
this. Note the huge volume on this upthrust. If that volume or activity represented buying, there
would definitely not be an upthrust seen. Upthrusts are created by a deliberate move to catch stops
and mislead as many traders as possible as to the true direction of the market. Gavin shorted this
upthrust and clearly raised a red flag.

• Point E : Here we have a large red downbar. This bar closed in the middle but the volume was quite
high. So it shows that there must have been some buying pressure on this bar. But we are definitely
not interested in any long positions because of the terrible weakness we saw right after. Note, this is
not stopping volume because the market has not fallen enough from the top to attract professional
money to enter the market now.

• Point F : Here we have a blue upbar but we can clearly see that the bar is going up.
with low volume. So we have to assume the market remains weak.

Tom Williams

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• Point A : Monday. We mentioned in last week's newsletter that we should pay special attention to
action on Mondays or sometimes Tuesdays. But here at point A it's Monday and we can clearly see
they pushed it down early in the session. We assume it was to mislead as many traders as possible
only to go up and close in the fourth quarter.
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above. Volume is up slightly. This is not without a lot of demand and supply. This bar is
showing bullish activity. So behind this action, the professional money will have a pretty
good idea that this week's trading session will be upbars.
• Point B : Tuesday. Here we have an upbar that reacts to yesterday's action, but we note that
the range has narrowed and volume seems to have decreased slightly. Therefore, there is a
bit of hesitation with the upward move.
• Point C : Wednesday. Here we still have a blue upbar. There is a slight increase in volume, but
we note that this particular bar has a lower tail. A study of the intraday charts would suggest an
attempt to test the market. We can see a trendline just above us. So there is still a possibility
for higher prices.

• Point D : Thursday. Here we have a red downbar, however it closed in the middle with just below
average volume. So there is not much selling pressure at the moment.

• Point E : Friday. Here we have another red downbar. Although the volume seen is much lower,
a complete analysis of this bar is not too certain because we have an upper tail on this bar and
because the volume has decreased, we are not sure if this was a lack of demand when it
pushed up or if there was actually no selling pressure. We have a trend line still above us.
So there is another possibility that it could go up there.

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• Point A : Here we have a red downbar but clearly showing signs of a bull trap. We have an
automatic signal telling us to be cautious as it is a bull trap. Therefore, the next bar (point B )
is a blue upbar, again
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with an automatic signal telling us there is potential selling pressure in this bar. The market does not
like very high volume on upbars as this shows that there is supply present.
• Point C : Here we have a red downbar, but look at the top. This bar was an upthrust trap created
by professional money seeing weakness on the previous two bars - grabbing stops and
misleading as many traders as possible. Now, we know what created the upper tail on the daily chart.
This is real weakness. So, if you have any long positions, you would obviously want to close them
on this evidence.

• Point D : This is a confirmation bar - a blue upbar but note the volume
low. This is no demand following the weakness on the previous three bars. There is no way for
professional money to be interested in the market with weak bars right behind you.

• Point E : We have a red downbar that visually looks like a test. Sometimes pros will do this as they
want another move up to continue selling on the move up if possible. However, this test is almost
worthless due to the extreme weakness on the previous bars and you should ignore any strong
signals if the next bar is down. It needs to be sideways or up. We are looking for support in the form
of stopping volume, which is not yet evident.

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• Point A : Here we have weakness following an up move, which causes the market to
The market is susceptible to one or more professional groups opening positions, and of course
short positions.
Machine Translated by Google

• Point B : There is an upbar with weakness confirming no demand.

• Point C : Here we have a red downbar that seems to have some support holding
contained in it.
• Point D : Friday. This clearly looks like a shakeout session or some follower
Wyckoff's method calls it a spring session . So this is clearly a chart worth keeping an eye
on.

Tom Williams
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 376 To 380

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We keep a close eye on the S&P500 cash market because that is where the liquidity is, the real
driving force of the market. Remember, the futures market is a derivative of the index. You might
be fooled by the TV commentary that says the market is driven by the futures. This is not true. The
problem is that the cash traders are fully aware of what is likely to happen in the cash market and
this will be reflected in their participation in the futures market. We can see that the trend lines are
working well. They have been working since November of last year. The trend lines (point A )
are like looking at a chart that is a guide, but that being said, there are many different ways you
can trade these indicators. But the trend lines work and are very useful guides for whatever
you are doing.

• Point B : Monday. Here we can see a very large upbar that closes at the high. It even looks
like it has gapped up. So there was a lot of push up. However, the volume is not bullish
volume. Bullish volume is the volume that extends on the upbar. Not all of that is clear on
this particular bar.
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• Point C : Tuesday. These are the types of days you have to be very careful about if you want to interpret
these markets. Here we have an upbar but the weakness is fully described on a narrow range upbar that
closes in the lower quadrant and on low volume. Not only that, it has hit the upper trendline. The computer
program says it should throw a red arrow here because it is programmed with those parameters as weak
signals.
• Point D : Here we have a red downbar confirming the weakness on the bar
before.
• Point E : Thursday. This is a very large range downbar that closes quite far from the low. There is an increase
in volume. There must be some buying pressure on this bar. However, we are in the middle of a trading
range. We have weakness just above us. So obviously we would not be in a hurry to think the market has
turned bullish now.
• Point F : Friday. Here we have a blue upbar. We have an automated signal on it that says it is stopping
volume. This is of course because the computer is looking at the previous bar. Volume is not all that
clear on this particular bar. Don't be surprised if the market doesn't hit the lower trendline. We can't be in
a serious bear market because even though we have a signal at the top, seen at point C, this is just a lack
of demand. With a real bear market going on, you will see either an overbought session where the market
moves up quickly, maybe closes in the middle, goes into a new high and the volume will be very, very heavy,
or you will see an upbar that gaps up, goes up again into a new high and the volume will be very heavy.
That will mark the real top of the market. But right now, it seems like the S&P is struggling to keep its head
above water just as it is struggling to keep this uptrend going.

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• Point A : Here we have a very large downbar but note the extremely high volume as the next
bar moves up. We have a signal telling us there is a shakeout. This is actually more of a
stop volume than a shakeout. We have seen a significant move down in the background ,
giving the professionals an opportunity to enter the market at relatively low prices. We now
know that we should expect some form of test after this occurs. In other words, we can
expect the market to move sideways, even up with a little bit of no demand, but
eventually drop back down to where we saw the stop volume initially. If volume is low as it
drops back down into this area then that tells us there is no supply left in the market.
Since the market moves based on supply and demand, if there is no supply at the same
level (point B ) where there is a large supply or activity in the background, then we should
expect higher prices. We see the result of this as the market moves up to point C.

• Point C : Clearly there is no demand and also notice it is approaching the trend line
above. Of course, we could get overbought with the move above this trend line, but we can
see the market does not like the lack of demand signal, especially when it touches these
upper trend lines. We always have to trade in harmony with the mother indicator and have
to handle it with caution. The position on this particular chart is not all that clear to me as
we had strength in the background and now there is weakness.

Tom Williams

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• Point A : We can see the trend line above seems to be following the market trend exactly.

• Point B : Monday. We see a pretty strong blue upbar. This is a clear reaction to two
automatic signals that appeared on Thursday and Friday. The first signal tells us that
strength is coming, the second signal on Friday tells us that there is stopping volume.
It would be unusual for VSA to miss these exact bottoms and tops.
We note that the block is not bullish volume as there appears to be a slight decrease.
• Point C : Tuesday. Here we have a red downbar with the market trying to test. We
haven't forgotten the two strong signals from Thursday and Friday before. Now today,
average volume. The market closed quite far from the lows but we are clearly influenced
by the two signals at the bottom with the prediction of higher prices.
• Point D : Here we have a large amplitude blue upbar that closes very near the high.
Volume seems to have dropped slightly. But because the range is large, the move is so strong and we
have two strong automatic signals in the background, it is still bullish. If there is no demand, the range
will be narrow, which is clearly not the case here.
• Point E : Thursday. Here we have a blue upbar. Now the range seems to be narrowing.
It also closed quite a bit further away from the high and volume seems to be dropping.
We seem to be experiencing a bit of lack of demand as they push up past the upper
trendline.
• Point F : Friday. Here we have another blue upbar with a narrower range and
closed near the high. We note there was a slight attempt to gap up on it at the open.
Volume seems to have dropped off somewhat. We are very close to the upper trendline
and there is an automatic signal on this bar telling us there is no demand.
Ignore the signals at your peril. But remember, there is what we call momentum in the
market and you can see quite easily a push to the upper trendline on the next trading
day. However, if you see a test on Monday or Tuesday - a narrow range red downbar,
closing in the middle or high, lower volume than the previous two bars, this will be a
signal of their desire for higher prices. We are unlikely to go much higher because we
have already hit the upper trendline and are also hitting a supply area on the left
which will be another obstacle to higher prices. One day this indicator will show you
a clear top. It will probably take the form of what we call an overbought session. You
will see a push up, maybe close in the middle, huge volume and easily overbought,
that is, above the trend line, and the news will of course be good.

The other alternative would be what we call the end of a bull market signal . It
could be a gap up, the range would be clearly narrow, closing in the middle, but again
on extremely high volume and the market could be at a new high or new high zone.
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This index will move in harmony with the cash market. The arbitrageurs ensure this because if
one index moves out of line with the other, they will arbitrage large amounts and make quick
profits. This process ensures that the two indexes move together.

• Point A : We can see a blue upbar but it has what we call a lower tail where they pushed
it down at the beginning of the session to catch stops and mislead as many traders as
possible.
• Point B : Here we have a large amplitude upbar closing near the high and volume
huge. This is absorption volume as it pushes up past potential supply at old highs as
fast as it can. We assume it is absorption volume because we can see it pushing up
past recent highs, but we have what appears to be a shakeout on the previous bar with
that push down. Absorption volume is often tested . So let’s be cautious.

• Point C : Here we have what looks like an upbar with no demand, but since the market in
the background looks bullish we look for a test you would expect after the red arrow
with no demand in a bullish market.
• Point D : Here we have a test session. We have a downbar that closes near the high, the
volume is obviously very low. It is colored black because it closes at the same level as
the previous bar, but it still goes down to test and we have an automatic signal telling us
this. So you can expect higher prices.
• Point E : Here we have a blue upbar. However, this bar now looks weak. It was pushed
up, closing quite far from the high, but look at the high volume.
Someone is selling.
Machine Translated by Google

• Point F : The market simply eased off on the previous weak signal. Volume was relatively low
however but there must have been some supply on this bar as it closed in the middle.
The last two bars on the chart were after hours activity which is quite common on a Friday
and they just said the tape ran late.

Tom Williams

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• Point A : We note that we have touched the upper trendline. There appears to be some
support and some weakness, which is understandable since we are touching the upper
trendline. The market is closed on weekends and Mondays.
• Point B : Tuesday. Here we have a very positive push up as it pushes above the upper
trend line. Volume has increased slightly but is only about average. We note that it almost
closed at the high. However, the computer is not too happy with this and shows a red arrow
telling us some weakness has appeared.
• Point C : Wednesday. The computer may have seen something that is not all that obvious to
us, as here we see them testing the market with a red downbar. Now we know from past
behavior that when professional money sees weakness and is not completely sure,
they will test the market on the next bar and here we see such a test. We have a narrow
range downbar and the volume should ideally be lower than the previous two bars, which
in this case is just below average. However, the downbar is narrow and closes quite far from
the low.
We also note the close bouncing off the upper trendline. It was far from a
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Great test session but tells us there is little to no supply on this bar.

• Point D : Thursday. Here we have a large amplitude upbar closing at the high of the
corresponds to the test session on the previous bar. However, the volume is not exactly
bullish volume and it creates a yellow box warning us that there is no potential demand.
The yellow box appears because the next bar (ED: point E ), Friday, went up, not
down. However, we note that the volume has increased slightly and the range has
narrowed significantly. There is some supply on this bar but not too much. The trend
still seems to be trying to push up, but we are overbought, that is, above the trend
line, so we are vulnerable to any push down.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 381 To 385

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• Point A : We only have to look back at point A on the hourly chart to see where the cause
for this upward move lies. Here, this is a pretty clear shakeout/spring session.
We also note the red arrow on the bar just before. We know historically they are likely to
test the market after those red arrows. The professional money needs to know there is
little to no supply in the market for them to push prices up.
• Point B : Here we have a blue upbar. Look at the huge volume with an automatic signal
warning us that supply is present. The market does not like the huge volume on the upbar.
The market drifts back down to that supply to point C.
• Point C : No signal on this time frame. However, it is a narrow range downbar, dipping its leg
into the new low zone and we note relatively low volume. The next bar is a blue upbar
with a slight increase in volume which we know, increased volume on upbars is bullish
volume, not bearish, as long as it is not too large.

• Point D : Here we have a very clear shakeout session where the market is pushed down to
catch stops and mislead as many traders as possible. We assume that because of the
strength in the background, that is, lack of selling pressure and this bar closes in the
upper quadrant.
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• Point E : Here we have a bar that looks weak. The computer tells us there is supply present.
Although the volume is quite large, it doesn't look that large to us. Maybe it's because of the
market opening.
• Point F : The professional money is not taking any chances, so they have another test at point
F. This is not a clear test to us but any bar with what we call a lower tail should represent
a test on a smaller time frame and we note the low actual volume.

• Point G : The market reacts by jumping to point G, but here we have supply seen as high
volume and closes quite far from the high with a red auto arrow appearing. Of course, it is
Friday. There are many traders who close their positions on Friday near the close. That is
why when they come back on Monday or the start of the trading week, they often test the
market to see which direction they want to go.

Tom Williams

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• Point A : We always watch the cash market because we know that this is where the liquidity is.
The futures market is a derivative of the cash market. The big players in the cash market will
also be very active in the futures market. They know exactly how the crowd will react to
certain actions they take. On this particular chart, we have redrawn a new intermediate
trendline that shows its progress up. The market has been doing this for hundreds of years
and will eventually attract a large following as seen by the tight range, high volume upbars,
when the line
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professional money liquidated their positions on this surge in interest. We have yet to see
this happen and expect it to happen sometime in the future.
• Point B : Monday. Here we have a blue upbar but note it has a lower tail. In other words,
there must be a test on the lower time frames. We note the volume is quite low. Professional
money will not invest in a market if they are not absolutely certain that there is no supply left,
which can overwhelm the bullish demand for higher prices. If you read last week’s
newsletter, we explicitly told you to be wary of a test on Monday or Tuesday. There is clearly
not much selling pressure on this bar and since the market is overbought right now,
professional money must be pretty sure that there is little to no supply around at the
moment.
• Point C : When you look at this bar (Tuesday), this definitely looks like a bullish session.
definitive test. We have a narrow range red downbar, closing near the high. The only thing
that is not quite right is that the volume is not exactly as low as we know it to be. If this is
what we call a successful test, you can expect higher prices. The slight increase in volume
on this bar can be attributed to some buying pressure due to the clear test on the previous
bar where volume seemed quite low. The professional money will be fully aware of this.

• Point D : Wednesday. Here we have a blue upbar that reacts to a test on the previous two
bars, despite being overbought. When the market is overbought, you are likely to see
nervous traders who are more willing to sell than buy. We note that this bar also has a lower
tail. It had to be tested on lower time frames throughout the day to create this. So they are
clearly still quite nervous.
• Point E : Here we have a large upbar that closes near the high. There is a slight increase in
volume, which is bullish volume. Bullish volume is volume that expands on upbars while
decreasing on downbars. What the market doesn't like is excessive volume on upbars that
shows selling pressure.
• Point F : Here (Friday) we have a narrow range upbar that closes just above the high as it
approaches the new upper trendline. We note that this bar gapped up on the open and
closed just below the high. This represents an attempt to make sure it went as high as
possible under the circumstances. Volume has dropped somewhat, combined with the narrow
range is a warning to us that there is no demand in the market. But that is all. If volume was
extremely high and the market pushed above the upper trendline, that would give us a
completely different picture, which could easily be the end of a bull market, but we don’t have
that. Again, be wary of testing on Monday or Tuesday. Failing that, the low volume or high
volume narrow range upbars will show lower prices. Note that the trend line at point A is
actually an intermediate trend line drawn through the first two bottoms and the first top in
this current move. Note that the entire market in a long term move is a persistent uptrend
and remember, trends always last longer than you think. This is a way for the market to
trap the unwary because it is a natural thought process that since it has gone up this far it
must reverse soon.

Leaving the market, we congratulated Dallas (Tom Williams' partner) who was at the Buckingham
Palace Garden Party because she has volunteered for the Red Cross for many years. So bring
on the cucumber sandwiches! Let's hope the weather is good.

Tom Williams
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• Point A : This is a trend line that is showing an intermediate uptrend. Trend lines work, so we
always need to draw them if possible - the first two support points, the first supply point if
the market is moving up.
• Point B : Last Friday. We had a yellow box appear, warning
we have no demand here heading towards the upper trend line. we also notice they are
putting a lot of effort into this bar. it closes right at the high and almost gapped up at the open.

• Point C : Monday. Here we have a narrow range blue upbar, closing in the middle.
Volume is not exactly low but above and below average. However, the important thing here
is the narrow range. That means there had to be supply pouring in throughout the day to
create a narrow range upbar. We also note there was no testing attempt.
• Point D : Here we have a very clear test. Let's look at the volume and for a test to be
successful, we definitely want to see lower volume. Whenever you see a bar like that, it is a
clear test. The only thing wrong is that the volume is not low enough. However, you can
expect higher prices. But since the previous two bars showed weakness and we are in an
overbought situation as we can see, this becomes what we call a failed test. That's why
we call it a failed test. But the volume is clearly too high.

• Point E : Here we have a red downbar, so the previous bar is now clear
becomes a failed test and a serious warning of weakness for us.
Volume is just above average. Although not all is clear but if you check the Kagi chart the
actual volume has turned bearish.
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• Point F : Here we have a large range downbar and notice the increased volume. Even though
this is bearish volume there must have been some buying pressure there as it closed far off
the low.
• Point G : Friday. Here we have a blue upbar that closes near the highs but note the narrow
range, the volume is still bearish as it has dipped slightly. Bottom line - you can expect lower
prices. However, as the market is choppy, they may have an upbar or two to fool you. As you
can see, you are more or less in the middle of a trading range so you will be exposed. You
really need to trade at the edges of the trading range if possible . These views are of course
valid in the short term but the market is an ongoing story that you need to watch and read as
supply and demand unfold.

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Here we have the Kagi chart. It is designed to separate bullish volume and bearish volume. It does
not consider price range but purely volume. Bullish volume is volume that expands on upbars while
falling on downbars. That is why in a bull market we have testing and no supply. Bearish volume is
volume that increases on downbars while falling on upbars. That is why in a bear market you often
see upbars with no demand.

• Point A : We can clearly see a narrow range upbar. Although the volume is not clear, the
computer has colored it pink indicating a slight bearish volume.
• Point B : We note that volume has increased significantly on this downbar. This is bearish
volume - increased volume on downbars.
• Point C : Here we have an upbar and it's all too clear, on relatively speaking very low volume.
This is bearish volume - bearish volume on upbars.
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• Point D : Here we have a downbar, another clear increase in volume. This is bearish volume.
That is, volume increases on downbars. There is little or no direct prediction in these
charts, in other words, it can change to bullish very quickly if it wants to. But do your own
research on all of this and become an expert in your own right on the subject. But basically,
you would be unwise to go long or take a long while these bars are red.

Tom Williams

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• Point A : Monday. Here we have a relatively low volume blue upbar. If you remember what I
always tell you about Mondays, watch out for tests. Whenever you see a bar with what we
call a lower tail like that, in other words, the low has dropped below the close of the previous
bar, it has to be a test on the smaller intraday time frames. And the reason for the low
volume is that there is little to no supply present. You always have to watch for this on a
Monday or Tuesday. The professional money needs to know if they can go and invest big
in long positions. Since the market moves on supply and demand, you will see on any
test-like bar, including the ones with lower tails, even though they went up, they have to be
a test. That would indicate a bullish market, not a bearish one at that point.

• Point B : Tuesday. Again we have a very similar bar. This bar is

a blue upbar but it also has a lower tail. They definitely tested intraday on a smaller time
frame. We note the volume is still relatively low.
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• Point C : Wednesday. Here we have a large range upbar that closes right at the high.
Notice the volume is slightly increased so it is not exactly zero demand and not
zero supply. If we look at the Kagi chart, this volume is bullish volume, that is volume
that expands on the upbars while decreasing on the downbars.
• Point D : Thursday. Here we have a test bar. We know they are testing the market
because look at the very low volume - below average and lower than the previous
two bars. They are making sure the market is still bullish.
• Point E : Friday. This bar looks to me like serious weakness. It almost meets the
requirements for the end of a bull market, but not quite. We see a narrow range
blue upbar that closes in the middle, on extremely heavy volume. This should be
serious supply present in the market. Bull markets in reality always end on
upbars with extremely heavy volume, which we call an overbought session .
Now there are a couple of things that contradict that for us to consider. First, there
was a test of the previous bar (point D). Second, we are at an old top on the left
which could indicate they are absorbing any supply from that area. Third, we are in
the middle of a trading range, as we can see by the trend lines. To answer these
questions, we really have to let the story unfold to see what happens on Monday or
Tuesday. But even if it is a real top, they will still have to support the market over time
to be able to continue to deliver or sell on each wave up. So we have to be very
cautious and let the market tell us exactly what is going on here. Traditionally, when
the Dow gets weak or weaker, gold tends to spike. I am not sure of the exact
mechanism that causes this, but we will show that gold has surprised to the upside.
We also notice that in the Dow, the Kagi chart is still showing bullish volume, but
remember the volume immediately turns bearish. If you look at the S&P500, we
have a tight range upbar with extremely high volume. If that bar had gapped and hit
the upper trendline, I would say you definitely want to short this market.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 386 To 390

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• Point X : This is a trend line that has been active for a while.
• Point A : Here we have a classic test in a very clear bull market. It is
a red downbar that closed at the high. Volume was average and relatively speaking certainly not too
big. But above all, it was a test in a very clear bull market.

• Point B : Wednesday. Here we have a blue upbar. Admittedly it is a narrow range but clearly
low volume. But the test was very clear on the previous bar so we have to assume gold is
bullish.
• Point C : Thursday. Here we have a huge upbar that closes near the high.
High volume. This move up will reinforce the view that the S&P is now weak and traditionally
moves in the opposite direction to the S&P500. Any clear test now will show higher prices.

• Point D : Friday. Here we have a blue upbar that closes in the upper half. Like
Dow Jones, you will be looking for a test to take the market higher.
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• Point A : There is clearly an attempt to shake out the market, but as we can see from the
volume - there is too much supply present to drive higher prices.
• Point B : Here we see a red downbar back to the shakeout session level.
Note the narrow range, close in the middle, slightly above average volume. But it was
the narrow range downbar that caught our attention, especially when it turned back down to
the level of the shakeout session at point A.
• Point C : Here we have a red downbar that closes quite far from the low. This bar is much
more interesting to us because it has fallen back to the level at point A where there was
a lot of supply present. The market cannot go up with a lot of supply in the background.
Here we see clearly low volume showing that there is now no supply at the level where
there was previously. You can expect higher prices.
• Point D : Friday. Here we have a red downbar after pushing up to cross
upper trend line, close in the middle and clear low volume. This should definitely be a test
session and you can expect higher prices.

Tom Williams
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• Point A is the major trend line that has been in place for some time. This is part of the
S&P500 and both indices will move in harmony with each other. We have a new peak.
This will allow us to draw an intermediate trend line that shows sideways movement
(point B ).
• Point C : Last Friday. We can see the high was reached, which allows us to draw the
intermediate trendline. We have an upbar that almost closed in the middle, but look at
the huge volume. That represents supply. The market doesn't like huge volume on
upbars. The exception to this is when it is clearly pushing up past an old high on
the left, which would be absorption volume and you wouldn't expect the next bar to
be down.
• Point D : Monday. Monday is always a very important day for us because of cash flow.
Professionals coming into the market over the weekend need to know if the market is
bullish or bearish so they can trade with that perspective. Now here we have a red bar
that actually looks like a test which we always tell you to be wary of. I know it’s easy to see
in hindsight that this was a failed test, which is a sign of weakness. This isn’t really
surprising as we were very close to the top of the trading range. The previous bar was
up with a tight range, closed in the middle on extremely high volume, which was a weak
signal in its own right.
• Point E : Here we have a red downbar but this is an additional weak signal.
It almost looks like a gotcha bar where it was pushed down hard to trap as many traders
as possible into wrong positions. We also note that this bar has an upper tail, which
means there should be an upbar with no small intraday demand. There is an increase in
volume. This volume is far from large enough to show any stopping volume.
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In other words, it is showing that professional money may have stepped in to buy in the
market.
• Point F : Wednesday. Here we have a blue upbar, but this is not a strong bullish move by
any means. We note that the range has narrowed, volume is low and if we check on the
Kagi chart, the volume has now turned bearish. Never trade against this signal. Bullish
volume is volume that expands on upbars while decreasing on downbars. Bearish volume
is the opposite -
Volume decreases on upbars while expanding on downbars. This is shown on the Kagi chart.

• Point G : Thursday. Here we have a red downbar. Admittedly this clearly looks like a test or
even an attempt to shake out the market. It pushed down sharply only to close in the upper
quadrant and we note the low volume. We have a green automatic signal appearing telling
us this is in fact a test. You can usually expect higher prices when you see these tests or
shakeouts.
But remember, we have seen some significant weakness at the tops of small rallies. If
professional money is distributing, they will support the market in the right conditions to
continue selling or shorting in the next up waves.
We are in the middle of a trading range which is a very dangerous area for traders.
Temporary movements against the general trend are likely to occur in the middle of
these trading areas. With the test results, you need to trade at the edges of the
trading range .
• Point H : Friday. Here we have a blue upbar with a lower tail. Therefore,
must mean they tested the market during the day. Why test two days in a row? Let's look at
the Kagi chart and it tells us this market has bearish volume. You have to pay attention to
this.

Tom Williams
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• Point A : Here Monday. We have a red downbar closing in the lower quarter.
We have a weak automatic signal on the previous bar (Friday) telling us there is no demand
in the market. We are at the top of a trading range. The problem with this bar, as far as I can
see, is that when we look at the volume, it looks unusually low. I would say this is false volume.
You would be naive to think they could not have intentionally held back volume. It just
doesn't look right.
• Point B : Tuesday. Here we have a large range downbar closing in the lower quadrant.
Now, we note the very large volume. This volume could be added volume from yesterday's action.
But these large amplitude downbars are usually an additional weak signal after seeing no
demand on Friday.
• Point C : Here we have a blue upbar, medium volume. If we examine the Kagi chart, we can see
that the volume has turned bearish, that is, down on the upbars while up on the downbars,
something that is difficult for the naked eye to detect on any reliable, ongoing basis. Of course,
computers love this kind of action.
• Point D : Thursday. Here we have a push down, which clearly looks like an attempt to shake off
the market, closing in the upper half. There must be some buying pressure there.
• Point E : Friday. We have a blue upbar. This bar has what we call a lower tail, which indicates that
this must be an attempt to test the market. Let's look at the volume and it's just below average.
We have an automatic signal that tells us the computer thinks this is a test. Now there's
nothing too positive here to suggest we're going to have higher prices soon. We're in the middle
of a trading range as we can see by the trend lines, so we're vulnerable to jigging here. We need
to check the market closely on Monday or even Tuesday. If
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bullish, they will probably show a clear test - that is a narrow range red downbar, closes
in the middle or high, volume is lower than the previous two bars. Then you have to
assume the market is ready to move up. I would have thought that this is unlikely at the
moment. If we check the Kagi chart, we note that it is showing a bearish move, that is
the red downbars. The bearish market is increasing volume on the downbars while
decreasing on the upbars. You would be foolish to trade against these signals without
a positive rule in place.

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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 391 To 395

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• Point A : This is last Friday. We have one automatic signal - test session and one
strong signal
• Point B : Monday. We note that this bar has gapped up, but importantly there was absolutely no attempt
to test the market. This usually shows that their view of the market is extremely negative. If they
were positive, they would want to shake out, hit stops and confuse everyone by having a move down
in the nature of a test. If you look at the Nasdaq, we actually have an automatic weakness signal. This is
an important observation because the three major indices - Nasdaq, Dow and S&P500 are really all
essentially the same thing. If there is weakness in one index, you can be pretty sure there is
weakness in the other two, because they move in harmony with each other.

• Point C : Tuesday. Here we have a red downbar that closes in the middle. There is a
slight increase in volume. There appears to be a buying attempt here, but not a test as we know it. A
test as we know it does not have an upper tail like this bar has. It would be a narrow range downbar,
with clearly lower volume than the previous two bars.
Machine Translated by Google

• Point D : Wednesday. Here we have a blue upbar that closes quite far from the high,
but the two negative observations here are, first the volume is too high and second the
range has narrowed on an upbar. There is supply present in this market. If there is
supply present, you should not expect higher prices right away.
• Point E : Thursday. Here we have a very large downbar that closes near the low.
Volume is just above average. Is this a potential shakeout? When the market is
trying to move up and they encounter some form of supply, a trick used by market
makers is to push the market down exactly like that with as large a downbar as
possible, trying to shake off the supply that is present, catching stops, and
misleading as many traders as possible . So we have to remember this. We see
this happening frequently in the S&P500.

• Point F : Here we have a blue upbar that closes near the highs. At this point, it certainly
looks like an attempt to shake off the market, but we note the very low volume on this
last upbar, which tends to tell us there is little to no demand in the market. We need
more information and expect that to happen on Monday or Tuesday. If you then see
a clear test, which is a red downbar with a narrow range, perhaps closing in the middle,
with lower volume than the previous two bars, that would indicate higher prices.
However, if you see upbars with no demand, especially with a narrow range, that would
indicate weakness. If you look at the Kagi chart, we note that the volume is bearish at the
moment. The reason we need to look at these individual bars is because we have the
opportunity to get a fairly accurate overview of the market. It’s like a detective examining a
crime scene and coming up with some interpretations after examining the scene. Of
course, this is easy to do in hindsight, but it’s certainly an excellent guide to predicting
the upcoming direction of the market.
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Although the Nasdaq is a separate index from the Dow and S&P, it moves in concert with the two
and it is worth looking at all three major indexes to give you an overall analysis of where the
market is likely to go.

• Point A : This was last Thursday. Seems to be a common trick to get the
We call these shakeouts, represented by a large downbar, usually with medium volume.
These shakeouts throw off many traders. They catch a lot of stops and seem to be a
common tactic used to get higher prices. We also note that it hit a trend line, where you
can usually expect resistance on any downward move. It is also a very common occurrence
for them to test the market on Monday or Tuesday, which is always something to be wary
of.
• Point B : Here at point B, Monday, we have a clear test session. A test session is
professional money testing the supply side of the market. A downbar with low volume and
a narrow range, especially here closing near the high, shows that there is no selling
pressure in the market. This is a VSA principle that you need to be fully aware of.
• Point C : Tuesday. Here we have a blue upbar with a bullish gap in response to that positive
test. We note the slightly increased volume. It is bullish volume, that is, increased volume
on the upbar but not too much.
• Point D : We seem to have a clear shift in supply and demand balance here. It is an upbar
but notice the range has narrowed and the volume has increased significantly. The computer
has taken note of this information and given us a weak signal automatically telling us
there is selling pressure inside this bar. So this analysis must be added to your trading
skills.
• Point E : Here we have a simple red downbar reacting to the weakness on the previous
bar. There is nothing too unusual about the volume, but this is not a test for at least two
reasons. We note that this bar has an upper tail. The tail
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this above must have been created by some up attempt with no intraday demand and the volume
was too high for a test. You would expect a test with much lower volume.

• Point F : Friday. Here we have a downbar with a gap down. This looks much more like a test in a bull
market. There is no upper tail and the close is near the upper quarter. Volume has dropped slightly.
The computer thinks we have a test. You can usually expect higher prices. We apologize that we will
not have a newsletter next Sunday (August 3) due to annual leave, but we will be back next week.

Tom Williams

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• Point A : This is July 25 where we noted a pretty clear test in the Nasdaq. We mentioned that we
could expect some higher prices.

are thinking of any bullish moves.

• Point B : Monday. We have a blue upbar on Monday that reacts to the test of the previous bar.
However, we note that this bar has a huge lower tail. They clearly tested the market during the day.
This is normal for Monday action as many professional traders were out of positions over the
weekend and wanted to test the market on Monday. Although the volume is a little lower than the
previous two bars, we would like to see really low volume for a
Machine Translated by Google

positive test. Here we can see that although it is lower than the previous two bars, it could
have been much lower. Note, we are not concerned with the actual data or numbers regarding
this volume. What we are looking at is the relative volume, that is the volume compared to at
least the previous two bars and with a successful test you can expect much lower volume
than what is shown here. Therefore, we must proceed with caution if we are thinking of any
bullish move.
• Point C : Here we have a blue upbar. However, we note that it closed right in the middle, the
range was definitely not a bullish range and the volume was only average. This is definitely
not a positive signal of higher prices.
• Point D : Here we have a red downbar. This is definitely a bearish signal.
We note it gapped down, closed near the lows and there was a slight increase in volume. So
we know the bearish volume is increasing on the downbars while decreasing on the upbars.

• Point E : Here we have a downbar but notice it closed in the middle, the range has narrowed and
volume has decreased. There is an automatic signal where the computer thinks it could be a
test session after the shakeout session, as seen on the previous bar.
• Point F : This was last Monday. We have a blue upbar that reacted to the
Positive strength is seen on the previous bar. We note that the volume has dropped
significantly. It closed in the upper half. But this is to be expected as the positive reaction
has to have a test session in the market before you can see higher prices.
We also remember that professional money needs to see lower prices become attractive to
them before moving into any bullish moves themselves.
• Point G : Thursday. We have a red downbar and an automatic signal appears
where the computer thinks it might be a test. However, you will see that these very positive tests
do not have what we call an upper tail on them, that is, the high of the bar is usually not
higher than the close of the previous bar. We also note the volume, although lower than the
previous two bars, we would like to see much lower for a positive bullish test.

• Point H : Friday. Here we have a blue upbar that reacts to a clear test of the previous bar. We
need more information when the market opens. But remember, a bullish move will
need a test , a clear proper test. That is a narrow range red downbar that closes in the
middle or high, clearly lower volume than the previous two bars and preferably the high of
the bar is not higher than the close of the previous bar. These upper tails show built-in
weakness, where in an intraday chart study it should have been pushed up with no demand or
even oversupply.
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At point A , we can see a clear market top signal - a potential overbought session. Whenever
you see an upbar after a bullish move that goes into a new high with a narrow range, closes in
the middle, on very high volume as seen on this chart, it is clear that the professional money is
selling their positions, so they are definitely not bullish at the moment. However, the usual story
you will see is that they may test the market on Monday or Tuesday. A clear test, I will repeat
again, is a narrow range red downbar, closes in the middle or high, with clearly lower volume
than the previous two bars. If you see that, you should expect higher prices.

We have a newbie article that might be helpful to you if you haven't seen it yet. I hope you
enjoy it.

ABOUT VSA

Hello everyone, Tom William here. Some people say VSA sounds like a disease. However,
the only connection is that when the principles are laid out for you, you will find it attractive. So
what exactly is VSA? It is a chart reading system where the V of course stands for
Volume. Volume is the vertical bars that are usually provided with your data that are seen at
the bottom of the chart. Most people around the world have no real idea what volume means, to
the point that many simply ignore it. Volume, seen at the bottom of the chart as vertical bars,
represents the activity of the pros.
By looking at the volume you know whether these pros are active or simply normal, or in our
case very important, or they are not active.
You look at the activity as seen in volume and on the amount of that activity,
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What exactly did the price range (that is the high and low) of the corresponding bar on the chart
do? The close is also quite important. There are a couple of things you need to remember. The
market is basically driven by what we call supply and demand in the market . This supply and
demand is created by the activity of the professional players which can be high, medium or just as
important as the low activity. A couple of other things you should keep in mind - since you are looking
at the activity of the professional players, that is traders, that can be trading thousands of
contracts, the weakness as we recognize it will appear on the upbars. These upbars are usually
accompanied by a narrowing of the price range (between the high and the low). Now, the reason
for this narrowing is because the professional players at some point, usually after an up move, will
want to start taking profits. The only realistic way they can get rid of thousands of contracts is when
the market goes up. Of course, the range narrowing is created every time large buy orders come
in, these buy orders are steadily satisfied by the professionals who are liquidating their positions on
that buy. This naturally causes a range narrowing. The exact opposite happens when they want to
buy the market. They can't buy in a bull market, so they have to buy in a bear market. This in fact
always has to happen after you see a significant decline in the market. This creates what we call
vulnerability. The low prices now have to become attractive. Buying in a bear market usually
causes the range to narrow on the downbar. This is because the buying is supporting the market.
In other words, they are absorbing the panic selling from the non-professionals. When this
happens we can usually see this happening because it will be accompanied by an increase in
volume. We call this stopping volume.

You need to know, the so-called professionals are fully aware of the impact their actions have on
non-professional traders. Market makers have the ability to push the market up to catch stops,
misleading as many non-professional traders as possible to increase their accounts. This is
why we have rules like upthrust sessions where they can push the market up to catch stops and
misleading all the traders who were long, who are now pressured by a seemingly up market that is
actually weak. It also helps explain why we have what we call shakeout sessions. They are fully
aware that a rapid downward movement in the market based on so-called bad news will cause panic
and knock out many traders so they liquidate their positions, often at a loss. This gives the
professionals the opportunity to buy at low prices. Now do we have any of these principles
confirmed on our charts? Why do we? We have a reliable way to confirm what I'm saying. It's your
personal computer, of course, because we've computerized these principles into the program, and
as you well know, computers can only do what you tell them to do.

They certainly don't think. If you program a wrong number, the computer program will stop
completely, completely unable to solve the error. So we have an automatic program, and if you
think the signals are quite accurate, in most cases very accurate, then the information we are
telling you is the only information the computer has to work with. The computer simply does not
understand your mistakes. So the chart is really a language that speaks to you. We do not keep any
secrets, and if you hear any educator announcing that there are secrets, then you know that you
are about to be led down the wrong path.

Tom Williams
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 396 To 400

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Here we have the Dow Jones 30 Industrial Average, which is of course part of the S&P500.

• Point A : We have a long term trading range trend line, which is always worth keeping an
eye on. The weakness clearly starts at point B. Here we can see an upbar and note the
narrow range, extremely high volume. Weakness when it appears will appear on upbars .
The professional money is liquidating as much of their positions as possible on this push
up. This creates a narrow range upbar with extremely high volume.
Pay attention to this as it will happen many times throughout your trading life.
• Point C : We have confirmation of this weakness - a large downbar that closes very close
to the lows, again on fairly significant volume. What's also interesting is that the next bar
is a blue upbar, but look at the low volume. This is an upbar with no demand which
actually has a signal on it telling us it was no demand. Now, we're talking about this in
hindsight, but why it's important is because the principles repeat themselves over the years.
The lack of demand is clearly a result of professional money seeing the weakness that
has occurred a few bars ago. Now, it's being pushed up deliberately but the professional
money
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industry was not participating in that upward movement. In other words, large traders
were not interested in higher prices at that time.
• Point D : This is also a very interesting bar and quite obvious in hindsight. It looks like a test,
which is probably true, it was a test. In other words, it was a narrow red downbar,
and even closed in the middle. Volume was lower than the previous two bars. Now, because
of the weakness in the background, which to us is quite obvious in hindsight, it turned out
to be a classic failed test. Again, the test was defeated by multiple weak signals right
after it.
• Point E : The computer has seen some strength appear. This is expected because
trend lines. There are many traders who follow trend lines and would be inclined to trade
them. However, we know more than them because we are now fully aware of the weakness
in the background, which would have definitely warned us of a bearish turn. What is
interesting here is that, at the start of the next bars, we suddenly have very clear bearish
volume. The bearish volume is bearish on the upbars while bullish on the downbars. This
is why any support has completely failed in this area.

• Point F : The market is falling quite sharply to point F. There appears to be stopping volume.
This means that professional money has been buying into a falling market in anticipation
of at least a small upside move where they can profit. This is immediately followed by a blue
upbar but note the lack of demand. This behavior is expected as you have to build a case
for any upward move. You can also expect the area where the initial stopping volume
occurred or the same level to be tested at some point.

• Point G : The expected test occurred at point G. It dropped below the area where the initial
stop volume occurred, but look at the volume – it is very low. We call this low volume
because it is clearly lower than the volume where we initially saw the stop volume, at point
F. We note that the next blue upbar was a large range upbar that closed right at the high.
This was done intentionally to lock as many traders in or out of the trade as possible.

• Point H : This is a classic VSA principle in action. By all means, you need to remember this
principle because it happens many times on many charts. It is what we call a test in a
bull market . It is a narrow range downbar, closes in the middle and has clearly low volume.
This will create higher prices. How do we know it is a test? Because the accumulation
area starts with stopping volume in the background. We also note, if a test occurs after a
red arrow, there is usually no demand, which makes the signal very strong for higher prices.
The professional money has pushed it down deliberately to test if there is any supply which
is their big risk.

• Point I : Again at point I we have another type of strength appearing. It is a red downbar that
closes in the middle and there is an increase in volume. With the background
information already recognized, we assume this is additional buying pressure taking place
from large traders.
• Point J : Professional money is getting a little nervous because we know there is no demand
in this area as volume has dropped and spreads have narrowed.
• Point K : Thursday. Here we note that there is some supply or selling pressure.
We have a blue upbar that has a narrow range, closing in the middle, but look at the sudden
increase in volume. They are definitely worried and are liquidating some of their positions.
We have an automatic signal here telling us there is selling pressure. The real end of a
bullish move is usually on an upbar with very high volume, super high in fact. This could
signal an overbought session or the end of a bull market. We don't have that yet. We have
the trend line going up.
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hovering above us. This trend line will act as resistance if or when the market approaches
it.
• Point L : Friday. Here we seem to have a test. The range is tight, the volume is average. If
we can rely on this data completely, you can expect the market to go up. Come Monday or
Tuesday, they may want to test the market again because they are quite nervous about these
high prices.

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• Point A : Tuesday. We notice, the program has created a yellow box warning that there is
supply around. The computer has noted that there was a certain amount of no demand
on the previous bar. On this particular bar, there was an attempt to push it up. However,
the price closed just below the midpoint and we note that the volume has decreased. At that
point we suggest, if they test the market on a Monday or Tuesday, then you can expect
higher prices. But clearly in this case, we have upbars with no demand - nothing like a test.
It is this observation that creates a yellow box which, if you click on it, tells us there is no
demand in the market. You would not expect higher prices when there is no demand,
especially early in the week. If you want higher prices, you can expect a test to take place.

• Point B : Instead of a test session, we have a narrow range upbar, closing far from the level
high, but the important analysis here is, look at the low volume. This is an upbar with no
demand and you would not expect a bullish move at this point. You would not really expect
a bearish move like that. To create a bearish market, you need to see very clear supply
pouring into the market on the upside as money flows
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Professionals liquidate positions for the careless public. Always remember, professional money
will need to support the market while they are distributing more positions even though they
are pessimistic.
• Point C : Here we have what appears to be a test-like action. It certainly
definitely looks like a market test attempt, although with a really good test I would like to see a
much tighter range than that.
• Point D : Here we have a blue upbar that reacts to a test attempt on the previous bar. It is not a
very convincing looking bar as it has what we call a lower tail where the volume can be much
lower indicating no supply.
• Point E : Here we have a clear red downbar that is going as low as they can go to push it down.
The slight increase in volume shows some buying going on as it closed in the middle. Markets
move based on supply and demand. If there is no supply, the market will go up. If there is
no demand, it will probably go sideways. If there is a lot of supply pouring into the market,
you would expect lower prices . The principles are pretty simple.

• Point F : Here we have a blue upbar, medium volume. But this is definitely not a strong looking
bar. Note the upper tail. In other words, it was a complete failure to make higher highs during
the day. Let’s look at the intraday charts for a deeper analysis.

• Point G : Here we have a red downbar, but look at the huge upper tail. This is not a strong bar, but
a weak bar. It looks as if they pushed the market up throughout the day, catching stops and
misleading as many traders as possible.

• Point H : Friday. Here we have a blue upbar that looks strong, but certainly with all the weakness
we are looking at, especially on the previous two bars, this cannot be as bullish as they would
like. We note it closes right at the high, which is often a ploy in an attempt to infer that the
market is truly bullish. These charts repeat themselves, so come Monday or Tuesday, if you
see a red downbar that is narrow in range, closing in the middle or high, and the volume is
clearly lower than the previous two bars, this would indicate they are looking for higher
prices. If you see upbars with no demand, especially if the range is narrow with lower volume
than the previous two bars, then there is no demand.

Tom Williams
Machine Translated by Google

3981180×820 163 KB

• Point A : Monday. Since it is Monday, we are definitely looking for a test-like bar, which if it happens
will show higher prices. At a glance at point A, it looks like a test. In other words, it is a narrow range
downbar, even closing in the middle, but it is not a successful test because of the high volume.
Ideally, the volume should be lower than the previous two bars. We can see that the actual volume is
quite high. This shows that supply is present. So always remember, a successful test will be low
volume, not high volume .

• Point B : Tuesday. Here we have a large downbar. Volume is still quite high so we actually have what we
call a failed test. When describing a bar test, we use the phrase “you can expect higher prices ”.
But if the next bar is down as in this case, it is a failed test and a weak signal, because what you
expected did not happen.

• Point C : Wednesday. Here we have a blue upbar but notice the volume has decreased slightly. In
hindsight, we can easily see there was a bit of a lack of demand built into this bar.

• Point D : Thursday. Here we have a red downbar closing in the upper quadrant.
This would tend to indicate some buying effort in the market, but nothing too obvious.

• Point E : Friday. Here we have another downbar that closes in the middle with a very slight increase in
volume. There was definitely some effort to keep the market going up, but this is not stopping
volume. Volume needs to be much higher to show that. We
Machine Translated by Google

Keep a close eye on Monday and Tuesday for some more evidence of what the professional money is
up to. If there is a clear test on low volume, you can expect higher prices. Again, if it goes up with no
demand, you can expect the market to be sideways at best.

3991173×754 154 KB

This chart is good for educational purposes and shows what an upthrust session actually looks like.

• Point A : The market does not like extremely high volume on upbars because traders
Professionals should liquidate positions on upbars, it can be pushed up based on some form of good
news.
• Point B : The next bar at point B is a very clear weakness signal. We saw unusually high volume on the
previous bar, but here we see the professional side reacting to that on a very narrow range upbar that
closes in the middle. The computer program recognizes this weakness and issues an automatic signal
saying there is no demand.
• Point C : With weakness in the background, any small blue upbar shown here would be shown as having
no demand, seen by very low volume as it pushed up.

• Point D : Here we have a blue upbar on significantly high volume. The previous bar was also on
unusually high volume. It is unusual because on that high volume or high activity, the previous bar
closed in the middle. Only weakness can do that.
• Point E : Here we have a true upthrust. It is pushed up throughout the day to catch as many stops,
misleading as many traders as possible only to collapse at the low. This is a true upthrust because it
follows the principles of
Machine Translated by Google

weakness seen earlier at points A and B. So be cautious with lower prices whenever you
see this behavior.

Tom Williams

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• Point A : Friday, September 12. This was a pretty clear strong signal in the Dow in its own
right. I think we missed this last week. We had a narrow red downbar that closed in the
middle, but in this case, it wasn't a test, it was buying. We had an automatic signal that
said strength was coming in. Ignore the signals at your peril. However, if you read our
newsletter last week, it clearly said that you should be on the lookout for a test in the S&P
500 on Monday or Tuesday, if the market was going to move higher that week. We actually
saw a test in the S&P 500, which we'll show you in the next chart. If you miss any of these
very clear signals that the market is turning bullish, you can sit down, write a note asking
yourself why you missed it for future reference. Since these clear signals come and go
quite frequently, you should really ask yourself why you missed any of them. Admittedly,
the market is a very choppy place and for various psychological reasons, it is easy to miss
opportunities.

• Point B : Monday. We have a blue upbar with a small lower tail indicating some testing is
taking place. We note that the volume is actually lower than the previous two bars, but not
all that clearly low volume.
Machine Translated by Google

• Point C : Tuesday. Here we have a blue upbar that reacts to the strength we saw. Notice
the slight increase in volume. This would indicate more bullish volume than bearish
volume. Remember, bullish volume is volume that expands on upbars while
decreasing on downbars.
• Point D : Wednesday. Here we have a blue upbar. Admittedly it closed in the middle
but volume again increased slightly on the upside. But given the background
strength, we assume this is not a weak market.
• Point E : Thursday. Here we have a large intentional blue upbar. We note that there was
a lot of effort to push this bar up. It even gapped up slightly at the open to close very
near the highs. There was a very slight drop in volume which could indicate some
hesitation on the upside.
• Point F : Friday. Here we need to pay attention because there are some very clear sources of supply pouring into the market.
market. We see an upbar closing near the lower quarter, but look at the really big
volume. Only supply can do that. The professional money seems to be liquidating
positions. Normally, what happens now is that the market basically goes sideways.
Very often, they are holding the market up because they will sell more and more on
each upward wave. Almost like a boxer in the ring who gets hit with a big punch. Not
enough to knock him to the floor, but he has to defend himself for a while to try to regain
his composure. Historically, we know the market will try to go sideways with this big
volume and if the distribution and selling continues, they can have an upthrust at
the end of this process. But now, we have to wait until next week to read what is
going on.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 401 To 405

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If you read the previous newsletter, we told you clearly that if there was a test on Monday or
Tuesday, you could expect higher prices, and lo and behold, the A test is , Monday, is a session
very clear. If you were writing a book, this is how you would describe a test. It is a narrow range
downbar that closes in the middle and the volume is clearly low, that is, the volume is lower than
the previous two bars. That is all we asked the computer to look for and that is why it gave us an
automatic signal telling us there is a test after the shakeout, which is correct.

• Point B : This is a quick blue upbar. These large amplitude upbars have nothing to do with
news or coincidence. It is done intentionally to lock as many traders out of the trade as
possible. If you think logically about it, you will see it. It is really a gotcha bar in the
upside .
• Point C : Friday. We saw massive volume on the Dow, but here we have something very
similar. The push up throughout the day was completely overtaken by the supply seen
in massive volume. Remember, volume is action, and what exactly happened on
that action? This is a classic example of a market experiencing massive supply. This is
not to say that we are entering a bear market, but it is certainly not bullish at this point. It
is easy to describe.
Machine Translated by Google

such a bar is an upthrust, but from our rules, a true upthrust only occurs after you have
seen weak signals . Here we only have strength in the background but it shows that supply
is overwhelming demand. But it clearly looks like an upthrust, like a telegraph pole on top
of a hill. In this case, it is supply exceeding demand.

Tom Williams

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• Point A : We go back two weeks to cover the weeks that were not covered because
no news last week. There are times when many daily charts cannot be too clear in their
analysis and this is one of those times. Whenever you see a bullish move and it makes
a top, maybe an upthrust type bar, you can be pretty sure that this will be a clear point of
weakness where you can expect, at best, a sideways market. It is also entirely possible that
it will decline after this weakness. If the news is good, you will probably see lower prices
instead of higher prices. Always remember, when you are analyzing these charts, that
humans can be very devious creatures.
• Point B : Here we have a large downbar that closes near the low. Professional money clearly
recognized the weakness on the previous bar and quickly liquidated positions. This type of
action can confirm to you that the market is indeed weak.
• Point C : We have a large upbar that closes near the highs but don't let this fool you because
two key principles are at play here. First, look at the low volume. It was pushed up
without demand and it was pushed up without demand by professional money that was
fully aware of the weakness at points A and B. There were no automated signals on the chart
Machine Translated by Google

today, but you need to study your intraday charts for details.

• Point D : Here we have a large downbar that closes low. Volume is only average. Typically, these large
downbars still show inherent weakness in the chart.

• Point E : Friday, September 26. Here we have a blue upbar, although the previous bar looked weak. But
on this bar, look at the low volume. This is no demand. The professional money was fully aware of the
weakness in this market.
• Point F : Monday. We should always be fully aware of the possibility of a test-like bar early in the week
because the professional money will want to have some idea of which direction the market wants to
go. Here we have what clearly looks like a test. The problem is that although we have a test, there is a
lot of weakness in the background, and of course, this is a test in a bear market. What we are
really looking for is tests with strength in the background. I know it is easy to spot in hindsight, but a
test means they want to check something and at the moment we can only see weakness in the
background. The software will only generate a signal if the next bar moves up in response to this test.

We can see on this chart the next bar is not going up, it is going down. So we have to treat it with
caution.
• Point G : Here we have a large amplitude downbar with an increase in volume.
It's not entirely clear what's going on on this bar.
• Point H : Thursday. Here we have a very interesting bar. This clearly looks like a test - a downbar that
closed in the upper quadrant. Volume is pretty heavy but it certainly looks like strength entered
the market at this point. Again, the big difference here is: this was not a test in a bull market but a
test in a bear market , which means a big difference. But it also means there was little to no
supply at that point. This is why on the next bar (Friday), the market jumped up by a large margin
and closed near the highs.

However, we note that volume has slightly decreased on this upbar so there is no enthusiasm for
the upside at the moment. Now, we can expect some further consolidation to take place as
professionals need to accumulate their positions for a move.
potential small upward move. If the market is ranging sideways and you see more testing or even
shakeout sessions then this could easily be building a case for an upward move.

Tom Williams
Machine Translated by Google

4031127×792 179 KB

• Point A : Here we have two bars marked with red arrows warning us of weakness. Notice
the huge volume on the upbar and the narrow range. We saw a bullish move up in the
background. The news is of course good. However, an upbar with huge volume and
a narrow range is guaranteed to be professional selling or weakness . You
definitely don't want to be long when that is present.
I think we covered all of this in the previous newsletter, but this analysis may be useful
for those new to the market.
• Point B : Here we have a blue upbar but look at the low volume.
Professional money is clearly not interested in higher prices because of the severe
weakness in the background. If you look at the consecutive bars here in this area, you
will see that they are depicting bearish volume. The bearish volume is the volume
that expands on the downbars while decreasing on the upbars. This is caused by
professional money activity taking place in the background. The bullish volume is the
opposite. If you keep an eye on this, it is a good way to confirm the likely direction of
the Dow and of course the weakness in the background.
• Point C : Here we have a strong signal that automatically appears. This signal is generated
because we have a narrow red downbar that closes in the middle and the volume
increases very slightly. If this was a really strong signal, you would expect much more
volume and we would call this a stopping volume. Even so, this would allow the market
to go up at least a day later, as seen by the blue upbar. However, we note that the
volume on this upbar is bearish. In other words, it decreased on the upbar. Remember,
bearish volume increases on upbars, slightly but not too much.
Machine Translated by Google

• Point D : This bar and the previous bar are what is known as a reversal top .
Admittedly there was a very slight increase in volume on the first blue bar, but the next bar
reversed with a large amplitude downbar that closed right at the low.
There is a very slight increase in volume compared to the previous bar. There is an old saying
in the stock market that a large range downbar that closes at or near the low with a slight
increase in volume as it approaches an old support area, in this case the lower trendline,
suggests the market is still a weak market.
• Point E : Last Wednesday. Here at point E, we have a very clear strong signal emerging.
present. A large-range downbar with extremely high volume closes in the middle and we are
severely oversold, that is, below the trend line. Only professional buying can cause this scenario.
Remember, when prices become low enough, it will definitely attract professional money
back into the market , and this must be buying.
The huge volume or activity shows that they are actually buying because it closed in the middle.
The news was of course extremely negative that day. Remember, there is no news in
good news . Commentators even suggested that the Ebola epidemic in West Africa was
causing the market to fall. Always remember, you will know more about the market than
the commentators or TV reporters.
• Point F : Friday. Here we have a blue upbar that reacted to the buying pressure on the previous
Wednesday. However, we note that volume is not bullish volume. For a market to become
bullish, you have to build a cause and that takes time to build. A cause is usually a
series of upbars and downbars, but it will be essentially sideways and at some
point you can expect the price level seen on the previous Wednesday to be reached. If
volume is then low, you can expect higher prices because there is no supply at the levels
where there was -
In other words, it is a test of supply at that level. Since the market operates on supply and
demand, if there is little or no supply at a level where there was previously, it must go up. But
trend lines can cause resistance at higher prices as data approaches them. Of course, if it
gaps up through them, it is bullish.

Tom Williams
Machine Translated by Google

4041102×758 135 KB

Here we have a weekly chart of the S&P500.

• Point C : What is very clear in hindsight is that we had a massive shakeout. This is a very common trick
within the US markets. It pushed down, bounced off the lower trendline that had been in place for
months and closed in the upper quadrant. Volume was massive and of course we had a strong
automatic signal that told us it was a shakeout. A shakeout is actually a well-known trick to catch
thousands of stops, panicking thousands of traders forcing them to sell their positions. The
professional money could then buy into this panic selling at very low prices. This tends to create a
gap up. This created a two week strong move to point D.

• Point D : This point updates to last Friday where we had two strong upbars.
The shakeout at the bottom was good as we mentioned. However, you will note on the last large
upbar at point D, volume was down so we have to conclude there was no demand in the market.
Of course, we now have to tread very carefully when it comes to any long positions.

• Point A : Looking back at area A, we can see the familiar mushroom top and if you look closely, you will see
that it is a distribution area . This is why they had to have a shakeout session because there was clearly too
much supply in the market allowing for higher prices.

• At point B, , there is a strong green signal appearing. You should remember this because you will

which is found very often in the future, the market can or will retrace back to the level
Machine Translated by Google

where the green arrow appears. It is part of the market mechanism. There was clearly
some buying pressure on that bar because it was a small volume downbar that closed
in the upper quadrant. Only some support could have produced that.

Come Monday, we need to be on the lookout for a test, which could be Monday or Tuesday, if
the market goes up. We say that because it is typical market behavior. These principles
repeat themselves and if one occurs, you should spot it immediately and without hesitation.

We apologize for not having a newsletter last week. All we have to offer is the chart above.
Gavin Holmes was at the VSA Summit all day Saturday and Sunday. He crashed all three of my
computers and I couldn't get the newsletter out properly. However, we are free to write the
newsletter here.

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• Point A : Point A is actually the close on Friday of last week. Here we see an upbar and
note the significant increase in volume. An automatic signal appears telling us that
weakness has set in. Weakness means supply is present, which is completely
understandable at these highs - professional money is worried.
• Point B : Monday. Here we have a bar that looks flat. It tried to go up and tried to go down,
closing in the middle on low volume. Not much going on here.
• Point C : Tuesday. If you read last week's chart, I told you to be on the lookout for a test.
One could happen. And lo and behold, here it is. We clearly see a downbar closing
near the high, a tight range, and average volume. This data is enough
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to generate a strong signal automatically from the program. When you see these test
sessions, the light will flash immediately in your head predicting higher prices.
• Point D : Wednesday. Here we have a blue upbar and note the quick push up effort
as much as possible to prevent hesitant traders from entering the market with long positions.
It created a slight gap up and closed right at the high. Volume remained only average.
• Point E : Thursday. Here we have a blue upbar. Again, it closes right at the high but notice
this bar has a little tail on it. There should be a trade that takes place below the close of
the previous bar. If you look at your intraday charts, this would be a test. We are still bullish.

• Point F : Here we have a blue upbar that almost looks like a test. Volume is low so it certainly
hasn’t met with much supply yet. The overall market still looks like it wants to go up. Always
remember: trends last longer than you think and we see weakness on high volume upbars.
We still need to be wary of a test on Monday or Tuesday if the market goes higher.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 406 To 410

4061137×707 163 KB

This is the Warsaw Cash Index, also known as WIG. We are showing this index because of our
recent trip to Warsaw and you will be surprised at how much enthusiasm these former
communist countries are showing for new ideas from the West. It is quite surprising in fact. Here
is their Index that you can trade. This is also the first time I have looked at it, but we will try to follow
this index weekly.

• Point A : We can see a strong upbar and look at the volume or activity - it is huge. This is
a big supply. There is an automatic signal telling us this so this bar marks the top. We
don't have time to review each bar in detail.

• Point B : Here we have a blue upbar but notice the price range has narrowed significantly.
Volume is quite high. This shows supply pouring into the market.
• Point C : Here we have a large range downbar that closes right at the low. This is what we
call a gotcha bar . The idea of these bars is to lock as many traders into or out of the market
as possible. If you think about and analyze the psychological reasoning behind this, you
will understand it better. The market drops to the point where those who were not short
will now not short because they think they missed the move and those who were
Machine Translated by Google

locking in the long side feels like I have to wait and hope it goes back up. Of course, in a
downtrend market, this doesn't happen.
• Point D : Here we have a blue upbar, but this bar is actually showing weakness. It goes up with
a very narrow range, very low volume. There is an automatic weakness signal on this bar.
These bars are created by a complete lack of interest from professional money in looking for
higher prices. All these points are what we call VSA principles . Write these principles
down in your memory. Not if they happen again, but when they happen, you will immediately
recognize them .

• Point E : Again, we have the same operating principle as at the previous point.
analysis. Once again we have an automatic signal of a serious weak signal.
• Point F : Again, this is a gotcha bar but this time they gap down
price, but the same principle is at work.
• Point G : Finally, as the strength shows up, you will see on the downbars, suddenly high volume
appears. Now, you can see in this general area, volume has clearly increased on a few
bars. We can clearly see in hindsight that this represents buying. Now admittedly, high
volume seems to appear on a few upbars. Even so, the computer gave one or two strong
signals.
• Point H : One of the principles we now look for is what we call a supply test . In other words, if
we see a clear low volume downbar as it drops back into the area where the high volume
occurred, this indicates a lack of supply at that time. Since the market operates on
supply and demand and is constantly moving, if there is no supply then demand must
be greater and you would expect higher prices .

• Point I : Here we have a large range upbar that closes right at the high. Again, this is a gotcha
bar. This bar is there intentionally to throw potential traders off, because people don't like
paying a higher price for something they could have bought at a lower price the day before.

• Point J : This was last Friday and the first time I saw this indicator. I looked at that bar and to
me it was a very clear weakness that came out of nowhere. It was gapped up with a tight
range, closing far from the high. When we look at the volume, we see that it was quite low.
This means that it was pushed up intentionally without demand. It is an interesting bar because
if this bar had extremely high volume, it would definitely be what we call the end of a bull
market, which you should always remember because these principles will come into play
at some point in the future. But because of the low volume, we have to assume it was
pushed up intentionally without demand. This is a pretty interesting indicator because it is
quite easy to read.
• Point K : This is Monday. We seem to have what looks like a test session, but with the severe
weakness on the previous bar, we need to be cautious.
• Point L : Here we have a downbar. If it was a successful test of the previous bar, we would have
had higher highs, but this bar is a weak looking bar. It has an upper tail, meaning it should have
pushed up at some point during the day. It has hit the trendline and is showing little to no
progress.
• Point M : Here we have a stronger downbar, note it closes right at the level
low. But again this is a weak looking bar because it has an upper tail and again it bounces off
the upper trend line. The upper tail would show that they pushed it up throughout the day at
some point but there was no demand from the professional side of the market causing it to
collapse.
• Point N : Thursday. Here we have a downbar that closed roughly in the middle. The fact that
the range has narrowed clearly shows some form of support, which automatically gives a
strong signal. Remember, this market will be heavily influenced by the S&P500.
Machine Translated by Google

• Point O : Friday. Here we have a red downbar, medium volume. If the US market shows strength, the
index can easily move up to the upper trendline (point X ). Note that we have drawn traditional trendlines
on this chart. You draw a line between the first two supply points and the first support point. This is the
traditional way to draw trendlines.

Tom Williams

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• Point A : Monday. Here we have an upbar. It has a red signal on it that warns us that there is no demand.
Now we know the habit of this S&P500 is that if it really goes up, they will test, very often on a Monday
or obviously by a Tuesday. But here there is clearly no attempt to test this market. Rather we have no
demand.

• Point B : Tuesday. Again, we have a blue upbar and a red warning signal saying that we have no demand
as can be seen when looking down at the volume or the amount of activity going on in the form of that
bar, is low. So, not 100% good.

• Point C : Wednesday. When we look at this bar, we have what clearly looks like a
test session. It was pushed down just to close in the upper quadrant. However, even though the
computer gave us a green signal telling us this looks like a test session, the thing about
Machine Translated by Google

basically wrong here because volume is too high. A test session should have lower volume than the
previous two bars.
• Point D : Thursday. Now here we have a large amplitude sawtooth bar where
it tried to go up, tried to go down but closed near the mid point. This shows that the professional money
is not convinced that the market is bullish or bearish. They feel they are in limbo here. So all is not well
at this point.

• Point E : Friday. Here we have a harder bar to describe. It looks like it is trying to test. Volume has dropped
off a bit, but there is no clear evidence of what the market wants to do at this point other than trend. If
this market is bullish, you can definitely expect a test on Monday or Tuesday. If there is no test and they
push it up without demand, the market is going nowhere. On a more positive note, remember, we
are looking at a weekly chart and there is a very clear shakeout that will have some impact, helping
the market to rally as much as possible. So we need to keep that in mind.

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This is the Polish WIG20 index.

• Point A : It looks like there was some support coming in as it nears the lower trend line where you would
automatically expect some support to step in either way. It's not really a strong looking bar because
first of all it has an upper tail. That is, a significant portion of the bar is above the close of the
previous bar. You need to look at a smaller time frame to see what happened there, but you will find
that on the
Machine Translated by Google

the market is really strong they dont allow this and although volume has increased
somewhat it is not really what you could call stopping volume.
• Point B : Friday. Here we have a large range upbar that closes near the high. While
this bar looks impressive, the volume is not exactly bullish.
Bullish volume is volume or activity increasing on upbars while decreasing on
downbars. This market will likely hold above the trendline at least until Christmas is
over. If you look at the Kagi chart in the end of day program, you will see this is
telling us the market is not bullish but bearish. Remember, bearish volume is
volume decreasing on upbars while increasing on downbars. This chart has no
predictive qualities but tells you exactly what is going on at the moment. We note
that November 11th is Independence Day in Poland, which is why there is no
bar for that day.
Machine Translated by Google

• Point A : We seem to have a shakeout at point A. This could be at the same time as the
S&P. A shakeout is confirmed by a huge range downbar, dropping to a new low only to
close in the upper quartile and very high volume. When you see such action, you can
expect higher prices. Of course, it is moving in harmony with the US indices.

• Point B : Here we have a blue upbar followed by a shakeout with a signal

strong auto. Low volume, but can we trust the volume from the exchange?
Experience says we can't. But there's no denying that the previous bar was a clear shakeout
and a bullish signal.
• Point C : Here we have a blue upbar but it looks like an attempt to test the market because
we have a clear lower tail on this bar. When looking at the volume that comes with this bar,
we want to see it much lower. We need to see volume that is clearly lower than the previous
two bars. There is supply all around.
• Point D : Here we have an upbar but notice the range has narrowed significantly. Volume
has dropped. This looks like demand is drying up on this indicator.

Tom Williams
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 411 To 415

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• Point A : Monday. Here we have a blue upbar. There is an automated signal telling us it is a
test bar. We call it a test bar because it is not a perfect test by any means. Volume
needs to be lower for a perfect test. Typically, a proper test would appear on a red
downbar. However, this is an end of day chart. For a more thorough study, you need to look
at a lower time frame.

• Point B : Here we have a blue upbar reacting to the signal on the bar
before. Volume was just below average and closed well off the high. They don't seem too
convinced that this market is really bullish or not.
• Point C : Wednesday. Here we have a red downbar and this bar clearly looks more like a
test session, but the volume could be lower. There is still some supply present.

• Point D : Thursday. Here we have a blue upbar but note, they are still testing the market as
it has a lower tail. Volume seems unnaturally low so it is clearly false volume. If this was
done intentionally then it suggests speculation.
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• Point E : Friday. Here we have a blue upbar and note that it has gapped up so there is
determination to push this market higher. Volume is still relatively low which is not
a strong signal for higher prices. We also note this bar
close in the middle. If the market remains bullish, you can expect to see a bar similar
to the test on Monday or Tuesday. Of course, any upbar without demand is a weak
signal.

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• Point A : We can clearly see that this is a bar similar to the test session in the market.
Futures. Relatively high volume where in the pre-cash market, volume is clearly not
accurate. I would like to see much lower volume, certainly lower than the previous two
bars. So we know there is some supply present.
• Point B : Thursday. Here we have a blue upbar. Again, it has a lower tail, which
means they are trying to test throughout the day. We have an automatic signal telling
us this is a test session, where you can see higher prices.
• Point C : Friday. Here we have a blue upbar, but it clearly doesn't look like a strong bar.
It seems to contain quite a bit of weakness despite being up.
It went up and closed in the middle. Volume has dropped somewhat showing no
demand. For a market to become bullish, you need to see a clear test on low
volume .
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4131314×820 176 KB

This is the Polish Index called WIG20.

• Point A : There was some attempt to support the market as seen by the slight increase in
volume on a red downbar as it neared the lower trendline.
• Point B : Here we have a large range upbar that closes near the high with an automatic signal. We discussed
this bar in the previous newsletter and noted at that point that the volume was not bullish volume but rather
bearish volume. There is clearly a principle involved in reading these charts. That is, when you see
support or stopping volume coming into the market on these red downbars, we need to see that
level tested . In other words, the market retraces back to that level. If the volume is then low,
where previously the volume was quite high, it must mean that demand is greater than supply and
you can expect higher prices .

• Point C : Monday. There is no doubt that there is no demand in the market on Monday.
Two. We have an upbar with a significant upper tail and very low volume as seen by the
lower volume than the previous two bars. This is no demand.
• Point D : Tuesday. Here we have a blue upbar but notice the range has narrowed, volume
has decreased. This is again no demand. We have an automatic signal appearing
telling us there is actually no demand. Now, this is not a problem for us as a chart
reader because we are anticipating a test of the bottoms of points A and B. This type of
behavior is very common when this principle is developing.
• Point E : Here we have a red downbar and it has clearly dropped back down to the level
where we initially saw the attempt at stopping volume. Volume is lower but will
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It would be nice to see much lower volume to help make this lack of supply principle
clearer.
• Point F : Friday. Here we have a blue upbar reacting to the lack of power.
There is clear supply in the market at this point. However, having said all that, this
principle is still not definitive for us. Firstly, we want to see a lot of stopping volume,
and then really low volume when they test it on Thursday. Putting all that together, it
looks like the market wants to slide sideways and up. We can see the two trend lines
converging. You can expect the market to pile into that convergence point.

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• Point A : We go back a few weeks because we don't analyze gold very often. But here,
there seems to be some stopping volume. It's a red downbar, closing almost in the
middle. There's a clear increase in volume. Professional money may have entered
the market here.
• Point B : This is an interesting bar as it is clearly testing the volume seen
on the previous bar. We can clearly see that it is significantly lower. Not only that, it is a
narrow range downbar, closing in the middle. This is a positive signal of potential
bullish action.
• Point C : Here we have a blue upbar that closes quite far from the high, but we note the
very high volume. There is supply in the market, supply will tend to prevent higher prices
at the moment.
• Point D : Here we have a red downbar. Volume has decreased somewhat.
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• Point E : Here we have a large amplitude upbar. There is a clear increase in volume
volume. If we see a bar that looks like a test, then this bar is absorption volume . That is, the
professional side of the market is ready to absorb any selling pressure from those locked in at the old
levels.
• Point F : Here we have a test session - a red downbar. The volume is clearly lower than the previous
bar but it is not a perfect test session as it has an upper tail and too much volume.

• Point G : Here we have a blue upbar but the rather negative points we outlined, the professional money
has also seen. There is a clear lack of demand here. It also closes quite far from the high, in fact
enough to create an automatic signal of lack of demand. The problem with analyzing gold is that it
can get a bit confusing at times because there are so many amateur traders out there, all doing
different things. You will still spot different principles at work, but watch closely to analyze their
actions.

• Point H : Thursday. Here we have a red downbar. It looks like an attempt to shake out or test the market.
Volume is too high.
• Point I : Here we have a blue upbar closing in the middle and volume tends to show no demand. It
seems the market is still struggling in any attempt to move up.
come on

Tom Williams

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Machine Translated by Google

• Point A : This is the test we saw last Wednesday. Here we look at

see an attempt to test the market. We have a narrow range red downbar, low volume
but enough to give an automatic signal on the next bar (point B ).
• Point C : Last Friday. Here at point C we have a very clear weak signal, a very large
volume upbar, closing in the middle. We note it is Friday and they tend to do this
at the beginning of the holiday season hoping that TV and media will tell everyone
it must be bullish now. This is a little tip you need to note it will come with the
opportunity presented.
• Point D : With the weakness we saw at point C, the market is sliding sideways.
This looks like an attempt to test the market, but it is not an ideal test by any
means. An ideal test would not have any upper tail to it.
In other words, the high will not be higher than the close of the previous bar. The volume will
also be clearly lower than the previous two bars, or very low.
• Point E : Friday. Here we have what looks like a classic weakness rule written in the
VSA. We saw what looked like over-action earlier in the week and now we see
what we call an upthrust session, even an automated signal that says exactly that.
This is just showing a few days of weakness and so won't create any significant
bear markets, but you can expect lower prices after this signal. Interestingly, the
feed is from Reuters and we note that with the high quality and accuracy of this
feed, it is generating very good automated signals that practically all computers
require, where some other feeds don't give you signals with this accuracy.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 416 To 420

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• Here we have the FTSE100. This index is of course heavily influenced by the Dow and the
US S&P500. We see at point A a sudden increase in volume, a strong blue upbar but
,

closing quite far from the high. There is supply present. The market does not like the
sudden increase in volume on these upbars.
• Point B : Tuesday. Here we have a blue upbar but there is very little progress on that bar
and look at the increase in volume. There is supply present in this indicator. This is not
a bull market at the moment.
• Point C : Here we have a red downbar, but it has a huge upper tail and look at the low
volume. It was pushed up there with no demand. The professional money was fully
aware of the supply present on the previous bars. This is a weak signal.

• Point D : Here we have a very similar looking bar. It is pushed up, has an upper tail, low
volume. This bar clearly has no demand. That is, there is no interest in the upside from
professional traders. The market will not go anywhere on any bullish move if
professional money does not get involved.
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• Point E : Friday. Here we have a confusing bar to admit. This clearly looks like a shakeout.
They pushed it down hard only to close near the highs. Volume was a little above average.
So we have to proceed with caution now because on the one hand the market looks
weak, but shakeouts are the traditional way to get higher prices. As usual, let's take a
closer look at Monday and Tuesday. If there are any clear tests, that will show higher
prices. Any upbar on very low volume showing no demand is bearish.

4171237×782 175 KB

The index continues to slide slowly, squeezing the data between the two trend lines. This
observation could be quite important to us because the market does not like a perfect balance
of supply Things are moving into arrowhead trend lines that tend to suggest
,

and demand .

• Point A : Monday. Here we have a red downbar. It has a tail on the capital
shows a certain amount of weakness deep in the chart.
• Point B : Tuesday. A red downbar with a sudden increase in volume. Take
remember, volume is activity and on that activity we close in the middle. There is some
buying power depicted in this bar.
• Point C : We see two upbars from that buying pressure that may have taken place but note it
was a narrow range up and the volume was low. This is clearly no demand. The
indicator appears to be in a sideways trend without any real upside intent.
any.
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Point A : This looks like an oversold session and would normally mark the end of a major
down move. A large downbar that closes near the lows on extremely high volume and very bad
news. The so-called bad news announced by the BBC was that OPEC said as a group they would
not cut production. Of course, remember that this indicator could probe down and hit the lower
trend line. If it does, it will certainly take the form of a test or shakeout. But before oil can enter
any bullish move, you have to see a cause build up, which usually results in a choppy up and
down in a near sideways movement for a while. But you leave it alone if it doesn’t show a test
principle or little to no supply present.

Tom Williams
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• Point A : Last Friday. We have identified this as a clear weak signal.

This type of action is very common in a weak market, so pay attention because you
will see this happen many times over the course of your lifetime. However, I said at the
time that while we would see a downbar, at least it would not be a significant bear
market of any kind because there was not enough distribution in the background.
There was some struggle going on between the bulls and bears, but there was clearly
no signal of the end of a bull market.
• Point B : Monday. Here we see a red downbar which is no surprise to us. But here we see
a large range downbar, closing in the middle and with decent volume. Now I know it’s
easy to see in hindsight, but this was a pretty clear attempt to shake the market off
after the weakness we saw last Friday. Of course, that weakness allowed them to do the
shakeouts we see here at point A. Let’s always remember, trends last longer than you
think and they seemed determined to have a Christmas rally.

• Point C : Tuesday. Here we see a large range upbar, volume is just above average but
you can see their determination to push the market up as fast as possible. There are
no trades below the close of the previous bar.
• Point D : Wednesday. Here we have a blue upbar but notice the range has narrowed,
volume has increased very slightly. There is some supply and hesitation on this bar.
• Point E : Thursday. Here, a light goes on in your head as soon as you see this.
We have a red downbar closing in the upper quadrant, but look at the block
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Low volume. This is a test in a bull market. There is little to no supply around. Of
course, that means no supply from professional money. You can expect higher prices
after these tests and this is quite evident here.

• Point F : Here we have a blue upbar reacting to the previous day's strong signal. It closed
quite far from the high and volume increased slightly. But I would think this is
acceptable supply since it was Friday. Many traders closed all positions over the
weekend. It clearly looks as if they were after the Christmas highs. We will know when
the end of a bull market is coming. Typically it will be seen on an upbar with
very good news, extremely high volume, maybe a large range upbar closing in the
middle or a narrow range upbar that gaps up into new high territory. But even
if that comes, it will only be the beginning of the distribution where it will likely go
zigzag up and down with little to no apparent logic . If you check the Kagi chart, it
is still telling us with the green up moves where the volume is still mostly bullish.

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Like many other indices, this one will be heavily influenced by what happens in the S&P500 or
Dow. There is obviously some correlation somewhere, but here on Monday (point A ), we see
a clear test. However, the volume for a successful test should actually be lower than the previous
two bars. Here, we see it just above average. But even so, it is still a test.
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• Point B : Tuesday. A huge range upbar that closes near the highs. We note it even
gaps up. There seems to be some bullish determination here.
• Point C : Wednesday. Admittedly, this bar looked wrong to me. The reason I say that
is because it looked like a test in a clear bull market on low volume. If that were the
case, you would have expected higher prices right away. But as we can see in
hindsight, the next two bars were down.
There seems to be something wrong here with this data.
• Point D : Thursday. Here we have a huge red downbar that closes right at the low.
Again this is not a proper test as it has an upper tail. That could clearly be explained
by the lack of demand as it tries to hit the upper trendline. Volume is just
average.
• Point E : Friday. Here we have a blue upbar that closes quite a bit off the high and
note the volume has dropped. This clearly looks like there is no demand and it
seems to be struggling to get higher. However, it will be heavily influenced by the
US market which clearly looks bullish, at least for the Christmas period.

Tom Williams
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 421 To 425

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Here is a chart of the S&P500 cash market. We can see a sharp decline during the last trading session. I have
to admit there is little evidence at the top to say that we will have such a decline, although the information may
lie somewhere in the lower time frames.

• Point A : Last Thursday. Admittedly I predicted higher prices in

the previous news and that's based on what to me looks like a clear test on Thursday (point A) where we see a clear
downbar, rally to close near the upper quarter and lower volume than the previous two bars. Now traditionally this is
a way to get higher prices. It's almost really what you could call a mini shakeout.

• Point B : This was last Friday. I suppose in hindsight you could say
this is an upbar with no demand with a strong test of the previous bar that people tend to easily ignore. if
the volume was very high we could call this a top, but it is not a true top. the volume is just slightly
above average.
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• Point C : Monday. Here we have a red downbar. It is a range downbar.

quite large, but look at the volume - it clearly hasn't dropped. It has increased slightly. If
this was a test session, you would expect much lower volume and probably at least a
close in the middle or highs.
• Point D : Tuesday. Here, the market has plunged to close at the high but again, there is
an increase in volume. The computer sees this as some buying pressure entering the
market, creating a green arrow. But remember, you ignore these signals if the next bar
does not go up.
• Point E : Wednesday. Here we have a large downbar that closes below the low of the
previous bar with a clear increase in volume. We note, these bars are now showing bearish
volume. That is, volume expands on the downbars while decreasing on the upbars - that is
bearish volume.
• Point F : Thursday. Here we have a blue upbar, but this is what we call a weak bar. It
pushed up all day only to close in the lower quarter and look at the volume drop. Only no
demand can do this.
We also note that volume is bearish.
• Point G : Friday. Here we have a red downbar that closes right at the low. Volume is bearish
and the entire move down looks bearish. We can look at the hourly chart for this last bar
on Friday and see clearly why it was so bearish.

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The hourly chart is clearly showing the weakness we saw on the daily chart.
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• Point A : We actually have three weak signals as the market moves up. The market does not
like very high volume on upbars, especially when the range starts to narrow. This represents
selling pressure and weakness. Notice how the simple trend system works when the professional
money decides to push these markets down. They keep the bar close lower than the previous
bar close. This process tends to lock in many traders, not allowing them to get out of any
losing trades they may have gotten into.

• Point B : Here we have a bull trap. They know the market is weak. It is a trick seen frequently in
weak markets. The push up is quickly followed by a large downbar, locking traders into poor
positions. Remember, they are experts in crowd behavior. But whenever you see these moves

In such a case, it is a weak signal that is integrated.

• Point C : At point C we have another similar trick. It pushes up to close at or near the high on
very high volume, with the next bar being a large downbar that closes lower than the previous
bar. This again tends to lock many traders into positions they are not really happy with.

• Point D : Here we have what appears to be some buying pressure which looks like stopping
volume to the computer. However, let's say, you had a terrible weak signal right behind you
and this bar has an upper tail. In other words, the high is higher than the previous bar so there
must have been no demand or supply during that time.
• Point E : Here the market goes up a few bars, but look at the low volume -
This is clearly an upward movement without demand. The reason, of course, is that the
professional money was fully aware of the serious weakness in the background and although
the market was pushed up, they showed no interest in the upward direction. This created what
we call a lack of demand.
• Point F : This bar moves down with a very narrow range. Volume has decreased. There is little
or there is no selling pressure on this bar. But we note that the previous bar had selling pressure
on it, so we must continue to assume this market is still weak.
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We said there wasn’t much evidence that this market was over. However, if we look at the Kagi chart, it clearly shows
that volume has turned bearish, that is, falling on the upbars while rising on the downbars, right at the top. You
obviously need to get into the habit of checking this chart and wouldn’t want to go long if bearish volume was
evident.

• Point A : The bearish volume started here, and continued to be bearish until Friday of the week.
before.
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Now we can clearly see that the indicator has broken out of the arrowhead, which was expected
at some point. At point A , we see a serious weak signal indicating lower prices. The computer
is calling it a bull trap.

• Point B : Here we see a large range downbar closing near the low with an increase in
volume but not too much. Whenever you see a bar like this approaching a lower
trendline with an increase in volume but not too much, you can expect the trendline
to fail and prices to go lower .

• Point C : Friday. There is little to no selling pressure on this index, but we also
No strong signals yet.

Tom Williams
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These big indicators have their own personalities and quirks, which is understandable since
they are run by humans after all. Now, the two main things that can happen is, the indicator will
often want to test a red no demand signal if it is truly bullish. However, it will also want to shake off
the market strongly. We can see that at point A. This creates an uptrend that lasts at least six
weeks. , when it hit the lower trendline, the last major shakeout was about nine weeks ago

However, in the area of point B , we see multiple low volume, narrow range upbars, and this
creates all those red arrows. In other words, we are looking at a no demand signal. Now, if the
market were truly bullish at the time of any of these red arrows, you would probably be looking for
a test right away. That is, you would see a narrow range red downbar, closing in the middle, but
the volume would be clearly lower than the previous two bars. But here, we don't see that. It
seems like they are too nervous to attempt any testing.

However, at point C we appear to have a typical shakeout. That is, a very quick red downbar that
closes near the low with an immediate reversal of a large upbar that closes near the high. This could
technically be a bullish signal. Shakeouts work by removing a lot of supply and a lot of traders by
trailing their stops, almost creating a vacuum-like movement that sucks the index up. Now, if this
was a real shakeout and was in fact bullish, you could expect a test later.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 426 To 430

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This chart will follow the cash market.

• Point A : Here we can see a few green arrows appearing indicating strength. These strong
signals often appear unexpectedly when least expected. The reason for this is that all they
can see is the logic of supply and demand. They are not emotionally or gut-feeling
attached to the indicator in any way but are reacting to the laws of supply and
demand .
• Point B : Thursday. Here at point B we can see two huge range upbars reacting with strong
signals, which I must admit is not all that easy to see when it happens, but take the cold
hard math to figure it out. Typically large range upbars close near the highs, as it
approaches an old resistance area above, which can be a bullish signal .

• Point C : Friday. Here we have an upbar, however with a very narrow range and there is
some doubt that the volume from the e-signal is accurate. To check this, we will turn to
the chart provided by Reuters.
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Here we can see Friday's action as provided by Reuters. We have a narrow range upbar, but look at the huge
volume. Normally, this should be a supply coming into the market . However, the analysis is a bit confusing
because we can see right on the left side of the chart is the old high. Is this absorption volume ? - Absorption
volume from potential weak investors locked in at the old highs, now happy to sell after being scared off by the
shakeout. We will only know the answer next week but if it goes up, you can expect to see an upbar or more or a
clear test of the market. That is, a narrow range red downbar, closing in the middle or high, volume clearly lower
than the previous two bars. Then you can expect higher prices. But I have to admit that on the surface, there is
clearly a lot of supply present and the only reason why we would think it is bullish is because of the shakeout that
is behind us. Right now, we seem to be in a no man's land. We have an automatic signal that tells us this could be
the end of a bull market. But having said that, it is not the end of a perfect bull market for two reasons: One,
you have a huge shakeout in the background. Two, the end of a bull market occurs at a new high . Here,
we can see in the Dow, it is not a new high. You have the old trading range right there on the left.
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• Point A : Here we have what appears to be stopping volume. We know stopping volume
appeared on a red downbar with a sudden increase in volume, the market closed quite
far from the low, and of course, the next bar had to be up .

• Point A' : (ND: second bar from the right) Thursday. Do we have what it looks like?
have demand

• Point B : Friday. Here we have a red downbar with huge volume suddenly on the downside. There
is a huge amount of supply here. There has to be supply here. So we have to be very cautious
with any bullish predictions.

Wishing you a Merry Christmas and a Happy New Year from the Newsletter Team.

Tom Williams
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• Point A : December 19, 2014. This is the upward move right before Christmas.
We note the A points of , B , C and D are both narrow range upbars, and look at the block

failure - this is clearly no demand as the market slowly curves upwards. This is a lack of
demand from professional money and a seriously weak signal.
If you look at the previous report, with Reuters data, we have the signal of the end of a bull
market. But we are a little hesitant to call it the end of a bull market because we have a
shakeout session in the background and have not entered new high territory.
But of course, the professional money was fully aware of this weakness and that is why it was
followed by upbars with no demand on this chart.
• Point E : Here we have a red downbar. The volume is not exactly big. On that bar, there is not
much selling pressure in the market. Now, if this was a real test, the next bar should be up. But
we don’t really expect that because of all the weak signals right behind us. Sure enough, the
next bar is down and the red trend system is showing a downward movement.

• Point F : Friday. We can clearly see it is a very weak looking bar. In other words
otherwise they tried to push the market up but closed in the middle and there was very little
bullish volume to go along with this bar. So the market is still weak. We need to see stopping
volume on a downbar.
• Point G : Tuesday. At point G, we have a downbar. It closed quite far from the low, however,
but look at the sudden increase in activity. While this volume is not enough to say we
have a clear stopping volume principle, there is clearly some professional buying here. We
have an automatic signal telling us this is a test after a shakeout. Of course, that is looking
at the previous bar, which
Machine Translated by Google

could be right. The market reacted to this to point H with two fairly large upbars.
All of this is great but look at the failure volume. To me, this does not look like bullish volume.
We drew a 50% retracement level and the market pushed quite far above that level which
is a sign of recovery and strength in the market. But it is just a sign.
• Point I : This is Friday's action. Here we have a red downbar and there's not a lot of selling
pressure on this bar. Seeing the bounce as it goes up to the 50% retracement on the
previous bar, we need more confirmation of what's likely to happen here. I would think
that if we were bullish, we'd need to see more consolidation and a clearer test because
the volume on that bottom, while decent, wasn't enough to say we had stopping volume.
Now with Friday's action here, we'll show you the one hour chart which is pretty interesting.

4301228×818 161 KB

• Point A : Here we have a very weak signal. It is actually what we call a

a reversal top . Whenever you see large downbars closing near the lows on very high
volume, that is a serious weakness signal.
We even note the next bar looks suspiciously like a hidden upthrust. The market drops
to point B.
• Point B : Here we seem to have some intervention from cash flow.
professional. It is a red downbar closing above the mid level with a clear increase in
volume. There seems to be some buying pressure from the professional side of the market.
We have an automatic signal telling us this could be a shakeout session. Remember, we
have a huge amount of weakness in the background. We have to remember that.
Machine Translated by Google

weakness.

• Point C : Here we have a red downbar. Again, we have an automatic signal appearing and the volume is
clearly lower than the previous bars. The next bar is a blue upbar that reacts to what looks like
professional buying pressure and we have a signal telling us the previous two bars may have been
stalling volume. Now, we are watching this indicator in the office all day Friday and it has been
sideways for a couple of hours doing nothing. The market looks weak to us. Gavin actually shorted the
market because of this apparent weakness.

• Point E : However, his position was caught by an upthrust session. Upthrust sessions are deliberately
created by market makers as a mechanism to be able to push indices up or down with the idea of
catching stops and misleading as many traders as possible as they are fully aware that the market is
actually a weak market.
And here's what seems to be coming out. To me, this market looks weak.

Tom Williams
Machine Translated by Google

THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 431 To 435

• Point A : Monday. Here we have a red downbar that closes far below the low, volume is just
above average, not exactly high and not exactly low. Now we have weakness on the previous
two bars, and never trust these bars at point A which have what we call an upper tail. In other
words, the high is higher than the close of the previous bar. Obviously something happened during
the day to create this and usually there is no demand or if volume is high then there is supply
in that area.

• Point B : Tuesday. Now, we have a large red downbar, but this is actually a very weak bar. Why?
Because it has a huge upper tail. This is because the market makers push it up during the day to
catch stops and mislead as many traders as possible. So, let's expect lower prices.

• Point C : Wednesday. Here we have a bar that looks much more positive. It is a
red downbar with quite a large amplitude, closing in the middle and there is a clear increase in
volume. There must be buying force here from the professional side of the market to create this.
• Point D : Here we have a red downbar closing near the low. Again we have this annoying upper
tail and note the volume is not exactly low so there is still selling pressure on this bar. Supply is
present.
Machine Translated by Google

• Point E : Friday. Here we have a blue upbar closing near the high of the
corresponds to small buys appearing on the previous two bars. Volume increases
slightly. As you can see, we have an arrowhead formation. You can expect a small
rally, maybe up to the trend line but that could be all.

The Kagi chart of the Dow Jones Industrial Average shows at point A where the bearish
volume begins. The bearish volume is the volume that increases on the downbars and
decreases on the upbars. The computer sorts this out pretty easily and you would be unwise
to trade expecting any bullish movement when these bars are showing red. There is very
little predictability in this bullish or bearish volume, but it is certainly worth looking at.

• Point B : Here the market volume has turned bullish, but point C (Friday) is still
showing weakness even though we expect a small upward move.
Machine Translated by Google

• Point A : Here we have a red downbar with huge volume on it. Now, even though this is
Reuters data, it looks like that huge volume should actually be on the previous bar. That
would make sense, indicating huge supply. So this is one of the reasons why we need to
look for decent volume on these charts at some point in the future. But even so, the market
doesn't like this huge volume.

• Point B : We appear to have what we call a reversal bottom . It's not all that clear cut, but
whenever you see a market go down to a new low and the next bar reverses to the upside
with a close that is almost higher than the high of the previous bar, there is some strength
associated with this.
• Point C : We seem to have what looks like a test session and here's why it is
went up on the next bar. The rules are not so clear on this index, but it will be greatly affected
by the performance of the Dow Jones and the S&P500. In other words, if those indexes show
weakness, it will definitely affect this index.
• Point D : Friday. Now, here we have a red downbar with a narrow range, closing in the middle,
showing a bit of activity. This indicator seems to be showing some strength. So don't be
surprised if you see a few upbars now.

Tom Williams
Machine Translated by Google

• Point A : Here we see a downbar that occurred last Wednesday. It was a clear buy
day. Remember, the buy occurred on downbars with an increase in volume (that's
the action), the bar usually closes in the middle and we also note it bounced off the
lower trendline forming the arrowhead we drew.
• Point B : Last Friday. Here we have a large blue upbar reacting to the fact that it was
oversold and buying pressure at point A. At that time, we were anticipating a small
upward move.
• Point C : Here we have a blue upbar, but these bars have lower tails indicating they
are testing the market hard for the day. We note the low volume on this test,
which indicates more bullish action.
• Point D : We have a similar bar, again with a lower tail which was a test. Again it
bounced off the lower trendline and the volume was lower than the previous two
bars so it was clearly low volume - no selling pressure. That is bullish action.

• Point E : Here we have a large upbar that actually closes near the high as it
approaches the upper trendline, closing near the high. There is a slight increase in
volume which is bullish. The bullish volume is extended volume on the upbars,
but not too much volume.
• Point F : Here we have a red downbar but it looks like a test in a bull market because
we have a narrow red downbar and the volume is clearly lower than the previous
two bars. That is low volume. It would have been nice if it had closed in the
middle, but it didn't. It closed at the low. This seems to be bullish behavior, although
when we look at the arrowhead drawn by the two trendlines, people automatically
think you will have prices slightly lower or sideways as it gets deeper.
Machine Translated by Google

at the arrowhead. But that being said, the last bar definitely looks like a test in a bull market
where you can expect higher prices. If you look at the Kagi chart, it is showing increased
volume all the way up.
As we said before, it would be unwise to trade against what this chart is telling you. That
being said, while it has no predictive value, it certainly tells you whether the market is bullish
or bearish at the moment.

Point A : Here we see a red downbar entering a new bottom, closing in the middle reacting to the
high volume on the previous bar. This should represent buying pressure and support.

• Point B : Here we have a clear test-like bar. Usually, a

the test was above a red downbar. However, this bar still qualifies as a test because it has a
lower tail and look at the low volume, clearly very low compared to the previous two bars. that
is bullish. there is no selling pressure in the market right after the high volume.
The supply is gone. Now, you can expect higher prices.
• Point C : Here we have a mixed signal, but essentially we have a
downbar, volume is still low. We assume this is still a lack of selling pressure because the
previous two bars are heavily influencing our analysis.
• Point D : Here we see two large amplitude blue up bars and even gap up.
Bullish drum, reacting to the strength seen at the bottom.
• Point E : Friday. Here we have a blue upbar. I must say it went up in a narrow range, closing
quite far from the high. Volume was average. This is not a very strong looking bar. This
market will of course be heavily influenced by the Dow and S&P500 of
US market. It can be said that the narrow range upbar with the absence of bullish volume
can be explained as the weakness built into this indicator.

Tom Williams
Machine Translated by Google

THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 436 To 440

4361172×803 184 KB

• Point A : This is last Thursday. Here we see a large upbar closing near the high as it attempts
to push above the upper trendline. We have an automatic signal telling us there is no
demand and a weak signal. Now, why is that an important observation? We can see an old
top on the left. Admittedly it is just a two bar top, but for the market to push above that
area, you have to have an increase, not a decrease in volume. Here, it is a key level and
there is no apparent demand. The big traders are clearly not interested in higher prices at
the moment.

• Point B : Monday. Here we have a blue upbar which is definitely not clear what is going on.
However, we can see there is no obvious demand right behind and note on this bar, the
volume is very low. So we have to assume this is no demand and of course a weak signal.

• Point C : Here we have a large red downbar. However, the volume is low and the bar closed
just below the midpoint. It seems that the upper trendline influenced traders on this bar.
Machine Translated by Google

• Point D : Wednesday. Here we have a large range downbar that closes just below the low with
an increase in volume as it pushes down past the lower trendline. This is a weak looking bar
and a weak signal.
• Point E : Friday. Here we have a large range downbar when the market is clearly
Break out of arrowhead pattern. Market looks weak.

4371176×784 158 KB

Admittedly the daily charts are not all that clear cut. The market looks weak overall and appears
to be in a downtrend. Now here we have the one hour chart showing Friday’s action.

• Point A : Here we have a pretty clear weak signal - a large upbar that closes quite far from
the high when it hits the upper trendline and on high volume. There must be weakness
(selling pressure) to cause this. That is, selling pressure from large traders. The market falls
to point B.
• Point B : Here we have what looks like a test and an automated signal telling us it is a test.
We note the low volume. So this is a positive signal for higher prices. However, we still
have a weak signal two bars ago and are getting stuck in the arrowhead, which we
know sooner or later, the market will want to break.

• Point C : Here we have a blue upbar reacting to the bar test

before. However, there are many weak signals present. We have an automatic signal that
shows an upthrust session. It is actually an upbar with very low volume. So it is a signal
that there is no serious demand built into the market.
Machine Translated by Google

• Point D : Here we have a blue upbar that closes right at the high, but again look at
the low volume. This is clearly no demand. You will not get higher prices as these
bars continue to show you no demand.
• Point E : Here we have a red downbar but look at the upper tail. This is an upthrust
session. The professional money knows the market is weak. So they push the price
up to catch stops and confuse as many traders as possible, then drop quickly and
close near the low designed to lock these traders into bad positions. Whenever you
see this type of action, you can be sure of lower prices.

• Point F : A large downbar with very high volume. Whenever you see a market
pushing down through the lower trendline on high volume with lots of no
demand signals and weakness in the background, you can be sure this is a
bearish signal. You can expect lower prices .

4381174×765 154 KB

• Point A : Here we have a blue upbar but look at the huge volume.
Now of course we have all the weak signals in the background as seen by the red
arrows. These red arrows are almost showing no demand as the market tends to
curve up and you have the typical mushroom top.
Now, this particular bar is showing too much volume. The market doesn't like
extreme volume on upbars.
• Point B : Here we have a blue upbar but look at the very narrow range and very low
volume. This is a sign of no demand. You will not have high prices
Machine Translated by Google

more if the professional side of the market does not participate in these upward
movements.
• Point C : Here we have a large amplitude downbar closing near the low. The market
seems weak to us.

4391177×779 178 KB

• Point A : Here we have a narrow range downbar closing in the upper quadrant, volume
just below average. We mentioned in the previous newsletter, there seems to be buying
in crude oil, that is, buying from professional money, seen frequently by low volume
narrow range downbars. These are not all that easy to see if you don't expect them
because the news won't be good. You have to expect negative or bad news at the
bottom of these instruments.

• Point B : Monday. Here we see two strong upbars reacting to the strong signal
at point A.
• Point C : Tuesday. Here we have a large blue upbar that closes quite far from the high and
note the high volume. While you need extended volume on upbars to be bullish, we don’t
want too much volume. Here it looks too high. The computer has thrown an automated
signal telling us supply seems to be present.
The computer is just looking at the information we just gave you.
• Point D : Here we have a red downbar that closes near the low. Volume is still relatively
high. So there is still some selling pressure here. Of course, the previous bar was
overbought, making the market vulnerable to profit-taking by some traders.
Machine Translated by Google

• Point E : Friday. Here we have a clear upbar with no demand when looking at it. In
other words, it gapped up slightly, narrow range, closed below the bisector point
and volume although still a bit high, has clearly declined. The computer has read
this as no demand and weakness at the moment. We note we are overbought. To
indicate any bullish move we need to see a narrow range downbar closing in
the middle or high, volume clearly below the previous two bars, which of course is a
test.

4401175×759 139 KB

• Point A : Last Friday. Here we see some pretty clear prior weakness. At point A we
have a blue upbar but it went up in a narrow range, closed below the bar's bisector
and look at the low volume - clearly lower than the previous two bars. This is clearly
an upbar with no demand and a weak signal. We also have an automated signal that
gives us the same information.
• Point B : Monday. Here we have a red downbar with a pretty big range closing in the
middle, low volume. There seems to be some strength in this market. The Dow
Jones and the S&P500 are showing a strong signal. So this will have a big impact
on the market.
• Point C : Here we have a clear test which is a bullish signal.
red downbar closes right at the high on just above average volume. This definitely
looks like a test in a bull market. We have an automated signal. The computer
recognizes this as a test.
• Point E : Friday. Here we have a narrow range upbar as it tries to push above the
trendline. Volume is just above average. This market could easily
Machine Translated by Google

drift off, but will react to strong or weak signals in the US market (Dow Jones or
S&P500).
Machine Translated by Google

THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 441 To 445

4411177×742 168 KB

• Point A : Monday. It is always worth paying extra attention to these indicators on a Monday
or Tuesday as it appears, the professional money will try to position itself for the beginning
of the trading week. Now here we have a surprisingly strong signal appearing. In other
words, it was pushed down at the open only to close at the high with a large amplitude
upbar. This is a clear strong signal. Unfortunately, we do not have an automatic signal on
this time frame.
• Point B : Here we have a large amplitude blue upbar, closing very close to the high.
This bar has almost gapped up. Volume is just above average. The market is clearly
reacting to the look of the previous bar's test. Volume is neither too high nor too low,
neither of which we want.
• Point C : Wednesday. Here we have a bar that looks weak. It is a narrow range blue upbar,
closes below the bisector point and has fairly low volume. We have an automatic signal
telling us this looks like no demand, which we are right about.
• Point D : Thursday. Here we have another blue upbar that closes right at the high, but let's
look at the volume or activity - it's clearly low. There is no demand here. Of course, they
were fully aware of the weakness seen on the previous bar.
We are overbought now and very vulnerable to correction. You can expect this market to
test if it remains bullish at this stage.
Machine Translated by Google

• Point E : Friday. Here we have a red downbar that closes well off the low. This doesn't look
like a proper test bar because a clear test usually has no upper tail - that is, there is little
or no activity above the close of the previous bar. It looks like we're vulnerable to this
market sliding away, but be wary of any obvious tests. If you look at the trendlines, this
market appears to be sliding down. If it were really bullish, we would definitely see over-
action or stopping volume, on top of the last bottom which is not clear on this chart.

4421165×686 134 KB

If we look at the Kagi chart to see if the volume is bullish or bearish, it is showing green, which is
a positive signal at the moment.

Tom Williams
Machine Translated by Google

4431164×767 162 KB

• Point A : Here we have a basic VSA principle and a very clear one I might add. If you read
last Sunday's newsletter, I made it clear that if you see a test in the market on Monday
or Tuesday, you can expect higher prices. Here at point A, we have a clear downbar
with a narrow range, closing in the middle, clearly very low volume. This is a test in
anyone's language. We note that it is a particularly good test because there is no upper
tail, that is, the high is not much higher than the close of the previous bar, and of course,
not only is the range narrow, but we have closed in the middle. Very clearly, there was no
selling pressure in the market at that time.

• Point B : Tuesday. Here we have a strong blue upbar. It almost gapped up, reacting to
the strong signal on the previous bar.
• Point C : Here we have another test bar. Again, we see a narrow range red downbar
that closes in the upper quarter of the bar. Volume is just below average. So this is
also a bullish looking bar, but it is nowhere near as strong as the bar we saw at point
A on Monday.
• Point D : Once again we have a strong upbar closing right at the high reacting to the test
on the previous bar. Volume is just above average.
• Point E : Friday. Here we have a weak signal - no demand. In other words,
we have a narrow range upbar, below average volume. this clearly looks like no
demand. the computer thinks no demand either. we still don't have huge volume on an
upbar to indicate supply is overtaking demand, but you will see it at some point in the
future. in the meantime, watch for these tests. the market is closed on monday, but
watch for tests on tuesday or wednesday, if they go up
Machine Translated by Google

price. But if you see an upbar with extremely high volume, it will show that supply is
exceeding demand and is a weak signal.

4441160×766 146 KB

Here we have a one hour chart of the S&P500 daily chart we just looked at.

• Point A : Here we have a very clear strong signal. It is always a good idea to check the
lower time frames. Whenever you see large amplitude downbars with the bottom pushing
down to a new low, then going up to close almost at the bifurcation point with an
increase in volume, only buying power from the pros can do this. We have an automatic
signal telling us that strength is coming. So you are really alerted to a potential upward
move.
• Point B : Here we have a blue upbar that closes near the high. Volume is above average
and it is reacting to the strength on the previous bar.
• Point C : Here we have a strong blue upbar closing near the high. Block
The volume has clearly increased. Now we have large volume. We have an automatic
signal telling us supply has entered the market.
• Point D : The professional money saw weakness on the previous bar. Now, we have what
looks like an upbar with no demand. In other words, we have a narrow blue upbar with
clearly lower volume than the previous two bars. Again, any test next week will show
strength. Weakness will be seen with upbars with no demand or large supply.
Machine Translated by Google

4451167×735 163 KB

• Point A : Just like the S&P is showing a test on Monday, we also have a test in the WIG.
Volume is low. It is a classic test bar.
Now we have a working principle here and that's what you can expect right away.
higher prices with bars like this test, as we saw in the US market. But there is such a thing
as what we call a failed test. A failed test is where the market does not react in a
bullish way
right from the test session . That tells us this is a weak market, not a strong market
because at point B we have lower prices. We note the huge volume. This tells us there is a
lot of supply present.
• Point C : Thursday. Here we have a blue upbar but notice the range has narrowed, the
close is far from the high and we have what appears to be no demand.
• Point D : Friday. Here we have a narrow range blue upbar. Low volume.
There seems to be no demand in this bar. This market will be heavily influenced by the US
market, but at the moment it seems to be underperforming the US market. Therefore,
this market does not seem to be very strong at this stage.

Tom Williams
Machine Translated by Google

THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 446 To 450

4461164×800 182 KB

• Point A : At this point, we were running this chart live during the Friday webinar. This was
definitely a lot of supply coming in on the three bars. There was no doubt that there was
a lot of supply present. A message from Sebastian Manby in Jersey suggested that this
could be absorption volume as it was at the same level as a previous peak. At the time, I
was very skeptical that this was true as the supply was so large. Normally absorption
volume is only seen on one bar, but here we had three bars. Very shortly after this event,
our internet went down and we were unable to continue the webinar.

• Point B : At point B, we have a very clear rule and that is a test. Whenever you see a weak
signal followed by one or two bars, a clear test, you can expect higher prices. So here at
point B, we have that clear test. It is a narrow range downbar that closes in the middle and
the volume is lower than the previous two bars. A signal automatically appears telling us
that this is in fact a test.

• Point C : The market immediately reacts to this test by moving up to point C. Here we have a
test in another classic bull market that shows the
Machine Translated by Google

Higher prices. Whenever you see narrow range downbars closing far from the low, clearly
low volume, usually lower than the previous two bars, you can expect higher prices .

• Point D : Here we have a large range upbar. There is a sharp increase in volume but not too
much (too much volume would indicate supply present in the up move). We are approaching
the Friday close so many traders will be closing all positions for the weekend or holiday.

• Point E : Here we see another increase in volume on an upbar. Since we are near the end of
the Friday session and know that many professional traders closed all their positions, this
could be attributed to the high volume upbar as they liquidated their positions. So again,
we see how important this test is in a bull market. Again, any narrow range red downbar,
closing at the middle or high, with lower volume than the previous two bars, is a
potentially strong signal .

4471189×766 149 KB

• Point A : The market is closed on Monday because of Presidents Day so this is Tuesday. Here
we have a rule, of course, which is a test. it's a narrow range downbar, closes near the high,
volume is below average. it's not a perfect test, but at point B (Wednesday), we have a
much clearer test - a very clear narrow range downbar that closes near the high.

Volume is lower than the previous two bars. There is little to no selling pressure on the
downside at the moment.
Machine Translated by Google

• Point C : Thursday. Just to show you're not as smart as you think you are - another test.
Again, we see a narrow range red downbar that closes near the high, volume is lower
than the previous two bars. This is a test.
• Point D : Friday. Here we have a fairly large blue upbar that closes right at the high with
an increase in volume, but not too much. There clearly seems to be little to no selling
pressure, or downside interest, but one of our favorite principles would be for a test to
occur on Monday or Tuesday.
If you see that, you can expect higher prices. Of course, any upbar with too much
volume, especially with a narrow range, will indicate weakness.

4481179×773 162 KB

• Point A : Monday. Here we have a fairly narrow blue upbar that closed well above the
high and note that it even gapped up at the open. But the key principle here is that
volume is very low and this is enough to generate an automatic signal - no demand,
which is a potentially weak signal. (Note, we are overbought and vulnerable to profit
taking).
• Point B : Wednesday. Here we have a red downbar that closes just below the low.
Volume is just below average. This is a weak looking bar, possibly because it has an
upper tail. That is, the high is higher than the close of the previous bar. This will likely
be seen as a lack of demand on the lower time frames indicating weakness.
• Point C : Thursday. Here we have an upbar seen in blue bouncing off the upper trendline.
Volume is clearly low, that is, lower than the previous two bars. Therefore, compared
to the US market, the index appears weak.
Machine Translated by Google

Tom Williams

4491171×764 172 KB

• Point A : Monday. Here we have a classic looking test session. It can be said that the block
volume should be lower. It should be clearly lower than the previous two bars. We have a
narrow range red downbar, closing near the high. When they did this on Monday, it meant
they were looking for higher prices.
• Point B : Tuesday. We have a blue upbar. However, we have an automated signal telling us there is no
demand and when you look at the volume, you can see it is clearly lower than the previous two bars. The
computer will pick this up right away. Therefore, the market is not going anywhere if the big traders are
not participating in any upward movement.

• Point C : Here we have a very narrow range upbar closing near the high, but again very low
volume. The market at this point is going nowhere.
• Point D : Here we have a bar that looks like a test. It is a red downbar that closes near the high
with a narrow range. It cannot generate an automatic signal so something is wrong. Of
course, we have two seriously weak bars behind us.

• Point E : Friday. Here we have a red downbar that closes right at the low
but notice there is an increase in volume. This looks like continued weakness. Any low
volume, narrow range upbar next week would indicate lack of demand and further
weakness. Any high volume upbar is also weakness as there will be hidden supply in that
high volume. We can see that we are actually overbought. It is above the trend line, which
also makes it vulnerable to weakness.
Machine Translated by Google

4501164×761 152 KB

It is definitely worth looking at the intraday charts. Here at point A , we have a blue upbar going
into new high territory, but look at the low volume. That is clearly no demand and a weak signal.
Of course, the computer will pick that up right away.

• Point B : Here we have a large red downbar that closes right at the low.
The pros saw weakness on the previous bar. The large downbar closing right at this low
was designed to lock many traders in or out of those highs. That said, the volume was
relatively low compared to the previous two bars, but this is still a weak signal.

• Point C : Here we have a blue upbar but look at the very low volume.
It is clearly lower than the previous two bars and here we are trying to move up past
the area of points A and B. This is no demand and there is no way a market can move
up past those resistance levels without demand. Therefore, you can expect lower prices.

• Point D : Here we have a bar that looks like a test, which even fooled the computer.
Volume should be lower and remember the background. We have at least three or four
serious weak signals and know that if the next bar doesn't go up, we can call this a
failed test, which can often happen in weak markets.

• Point E : Here we have what looks like stopping volume coming in - a downbar with very
high volume, of course with the next bar going up. We have to assume professional
buying has come in. We also note that the next bar is a blue upbar - not too high
volume, something we have seen many times over the past few days.
Machine Translated by Google

Recently, the high volume on the upbars is potential selling pressure. Therefore, we
have to assume these two bars are strong. The last two bars were after hours. They
often say “the tape is running late”, if you can believe them.
Machine Translated by Google

THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 451 To 455

4511169×727 162 KB

Point A : Thursday. Here we have an automated signal telling us there is a test, which is not all that
clear to me, but the computer picked up on something, especially since the next bar went up with a
pretty big increase in volume. Remember, bullish volume is increasing on upbars, but not too much,
while decreasing on downbars. This observation often helps in your analysis. The WIG20, like most
markets, will usually follow the S&P500, but it does not do so arbitrarily on any given day.

Tom Williams
Machine Translated by Google

4521167×767 182 KB

• Point A : Here we have a large amplitude blue upbar that closes right at the high.
We have seen many signals with no demand in the background, arching up and other weak
signals. Now we know from experience that in the Dow or S&P500, they like to test on Monday
or Tuesday if they are bullish. Now here we have the opposite. We have a large upbar that
closes right at the high, but look at the volume
(activity). It's very low. So this is clearly a push up due to lack of activity. The market
cannot go up if the big players don't participate.
• Point B : Here we have a red downbar closing above and below the mid-level and the volume
low volume. There was little to no selling pressure on that bar, which is all very well, but we
have a bar with no demand right behind us. If this was real strength, you would expect the
next bar to go up and we could see the next bar at point C actually go down.

• Point C : At point C, we can see a large downbar closing in the middle and volume just below
average. Again, if this was a strong signal, you could expect the next bar to be strong. But we
have all this weakness behind us, so we have to proceed with caution.

• Point D : Thursday. Here we have a blue upbar that closes quite far above the high.
We note the narrow range and lower volume than the previous two bars. This is clearly
no demand and a weak signal. There is no automatic signal on this bar but there will be on
lower time frames.
• Point E : Friday. A large downbar that closes near the low. High volume. A classic weak signal
in itself. A large downbar with increasing volume
Machine Translated by Google

but not too big and all the weakness in the background is a weak signal. Expect the
market to fall to the 50% retracement as seen at point F.

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• Point A : We have a clear strong signal - stopping volume. It's certainly not a perfect
stopping volume signal but it meets certain criteria - bottom makes new bottom, closes
in the middle while the range is narrow. With perfect stopping volume, I would want to
see much more volume like that.
• Point B : Here they try to go up, try to go down, but close in the middle. Volume
slightly increased.

• Point C : Here we have a blue upbar that closes in the upper half, but look at the huge
volume. This is supply and a weak signal. This bar represents the last five minutes
of the bar during official trading hours where we know the volume was generated by
traders closing their positions over the weekend. The next bar took place after market
hours and it clearly seemed to go up with no demand.
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• Point A : Monday. Here we have a downbar that closes in the lower quadrant. Volume is
quite low. But again, like the US market, we have a weak signal on the previous bar -
up with a narrow range, high volume. If that bar had been a strong bar, we would have
expected higher prices, not lower.
• Point B : Wednesday. Here, this clearly looks like an attempt to shake the market out. It
plunged at the open to close in the upper quarter. Not much going on here.
A real shakeout session will definitely be detected by the software.
• Point C : Thursday. Here, it's a much clearer picture. It's pushed up in a narrow range,
closed far from the high, huge volume. Now, the software detects and tells us there
is supply present, which is correct.
• Point D : Friday. Here we have a red downbar that closes quite far below the low.
Actual volume is low. Definitely not much selling pressure here. The only negative is that
it has a small upper tail, meaning it had to be pushed up during the day without demand.
Again, this index will be heavily influenced by the Dow and S&P500.
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• Point A : Monday. We mentioned in the previous newsletter that Monday and Tuesday are
important days for our analysis. The interesting thing about the Dow and S&P500 is
that the same crowd trades in these markets and their actions are often similar in
these charts. We mentioned last week that if bullish, they can test the market. That is, a
narrow red downbar that closes in the middle and the volume is lower than the previous
two bars, or if bearish, they will have an upbar with no demand. Now look, here we are
on Monday - the market is pushing up and look at the very low volume. The low activity
means that the professional money is not interested in any bullish moves at the
moment.
• Point B : Tuesday. Here we have a very large red downbar that closes just short of the
low. Volume is high. This combined with the lack of demand on the previous bar would
suggest that the market remains weak. Now, we know volume figures can't be 100%
accurate on any of these bars, but since we're using relative volume, we're not relying
on exact numbers but rather a general observation that volume is low, medium or
high, which the computer seems to pick up on pretty well.
Now, we also mentioned in last week’s newsletter that statistically we are likely to hit a
50% retracement level, sometimes described as a Fibonacci level. The Fibonacci
sequence is named after an Italian mathematician who first introduced the idea of a
mathematical sequence and the ratios that are often reflected in nature to the Western
world about 800 years ago. Why this seems to work as we are talking about is still
unclear. So this Fibonacci retracement level will tend to give the market a bounce. In
other words, it may go up and down for a while.
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• Point C : Here we have a red downbar. It seems clear that there is some buying pressure here, but I am
not interested in these bars because of their upper tails. An upper tail is where the high is much
higher than the close of the previous bar. To study the action of the upper tail, you have to look at the
lower time frames.

• Point D : Thursday. Here we have a large blue upbar that closes high. Volume is high so this is bullish
volume. So there must be some support on the previous bar.

• Point E : Friday. Here we have a red downbar that closes in the middle. Volume is above average. But
to close in the middle, there has to be some support somewhere. I would think the market is in a phase
of preparing for the next move, but it seems to want to move sideways at the moment.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 456 To 460

4561168×725 130 KB

• Point A : This is the Kagi chart of the Dow Jones. It shows bullish or bearish volume. If the
market is marked in red, there is no doubt that it shows bearish volume - that is, bullish on
downbars while bearish on upbars. The human eye is not very good at detecting this but
computers are. This is why weak markets will see increased volume on downbars and
no demand on upbars.
You would be unwise to trade against what this chart is showing.
• Point B : We notice the volume is now turning bullish. So now we have to continue our
analysis, but they will keep repeating themselves, so be alert. If the market is bullish, they
may test on Monday or Tuesday. If they are bearish, you may see upbars with no demand.
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4571172×740 143 KB

• Point A : Here we have a serious weak signal, which we saw last week. An upbar with a gap
up closing far from the high, a tight range on very high volume. Why is this a serious weak
signal? Because the professional money has gapped it up, but the tight range close shows
that when the buy orders came in, something was covering the top of the bar. Only
professional selling could do that, and the tight range shows that there is a lot of activity
going on. The automatic signal tells us that supply is stepping in. Of course, we are
overbought, as you can see by the trend lines.

• Point B : Here we have a large red downbar that closes at the low. Any market pushing down
through an upper support line on increasing but not too much volume, would indicate a weak
market. Volume appears to be just average.
• Point C : Here we have a blue upbar with a narrow range. Volume is low, that is, lower than
the previous two bars. The professional side of the market seems to be indifferent to any
bullish movement.
• Point D : A blue upbar that closes near the middle, volume is only average. This is a weak
looking bar, mainly because the previous up bar had no demand.
• Point E : Friday. Here we have a red downbar that closes far below the low, the block
slightly below average volume. The market seems to be in a downtrend, and as we know, is
definitely heavily influenced by the US market.

Tom Williams
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• Point A : As you can see on the chart, we have an active trend channel, drawn through the
first two bottoms and the first top in the background. The trend lines should clearly be
respected. We also note that the market bounced off the very close retracement level.
The 50% Fibonacci, which we discussed last week.
• Point B : Monday. Here we have a large blue upbar that closes very close to the high.
Volume is low so there is not much demand for this bar. Now, we mentioned in the
previous newsletter that if they are bullish, they will want to test on Monday or Tuesday
to establish which direction they want to go for the week, if possible.
• Point C : Tuesday. Here we have what clearly looks like a test in a bull market. We have a
red downbar that closes near the midpoint and note the actual range is average but appears
to be narrower. The key criteria is that, combined with the close being quite far from the
low, volume must be low. It is certainly lower than the previous two bars. Since we are
looking at relative volume, this is as low volume as we can get. So this is a test on
Tuesday, which is bullish. If it were bearish, they would push it up in a narrow range with
no demand.
• Point D : Wednesday. Here we have a strong blue upbar that closes near the highs.
and there was a big increase in volume, in other words bullish volume. The only negative
thing about this bar is that it has a small lower tail. You have to look at the intraday
charts to interpret that properly, but it could have gone down there without supply, giving
you an early warning that it was going up.
• Point E : Thursday. Here we have a bar similar to the other test session. We have a red
downbar with a narrow range, medium volume, but the key point is that it goes
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down in a narrow range with little to no selling pressure. This clearly tells us to expect
higher prices.
• Point F : Friday. Here we have a blue upbar that closed quite far from the high (upper
quadrant). There was an increase in volume but we are still bullish on the background
information. We can expect this market to hit the upper trendline sometime next week.

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We notice the Kagi chart is now showing mostly bullish volume. It would be foolish to trade
against this indicator. Bullish volume is volume rising on upbars while falling on downbars. This
is why you get tests and shakeouts in a strong market. Bearish volume is volume rising on
downbars while falling on upbars. This is why you don’t get demand and upthrusts in a weak
market.
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• Point A : Here we see a rapid upward movement in the WIG index, which is heavily influenced
by the US market. However at point A, we see an upbar but with extremely high volume.
This is extremely high volume and should indicate that supply is present.
We note the close is very close to the high showing they are stretching the rope for
maximum upside movement from here.
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THE WEEKLY NEWSLETTERS FROM TOM WILLIAMS - VOLUME 4

A Compilation Spanning February 2014 to March 2015

Chart 461 To 466 (END OF VOLUME 4)

4611163×735 150 KB

We thought we should look at the weekly chart of WIG20, and it seems there is more useful
information on the daily chart.

• Point A : We appear to have over-action or stopping volume, which is a strong signal. The
huge volume on a downbar closing in the middle after a decline creates that signal. You
can clearly expect that level to be tested if they go up.
• Point B : Here we have a large red downbar as the bottom tests the level of the over-action
on the left. The red arrow automatically shows weakness but the program is completely
unaware in this version of the software that there is over-action in the background at point
A.
• Point C : Here we have a clear test-like bar showing strength.
strong. It is a red downbar that closes near the high with low volume. This is a strong
signal.
• Point D : Here we have an upbar with a red arrow showing no demand.
The market is not ready to move.
• Point E : Here we have a red downbar, but we note the clearly low volume. This is showing
that there is no supply in the market at the moment.
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• Point F : Here we have a large range upbar that closes right at the high. Note that the volume
is not as heavy as the daily chart is showing. This market will move in reaction to the US
market.

Tom Williams

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• Point A : This is last Friday. Here we have a blue upbar, but it is a very weak signal. Why?
Look at the huge volume and the fact that the market went up into a new high, or recent
high. So we know that the huge volume must be selling because there is not much on the left
side of the chart that suggests that the huge volume is anything other than selling. Now, the
professional traders will immediately see this huge supply. On this daily chart, what we
want now is the action of the next bar to show the view of these professional traders. We
know this happens often and mentioned it in last week's newsletter. If they test the market,
you can expect higher prices. If they go lower, you can expect a demandless upbar or
upthrust. This type of action will happen over and over again as the same traders trade the
market every week. Therefore, at point B - Monday, we have an upthrust, or an attempt to
push the market up without demand. Therefore, it is clearly not a test.

• Point C : Tuesday. Here we have a large amplitude downbar that closes right at the low.
This is also typical of this index. In other words, they saw the weakness, knew the market
was weak, pushed it as low as they could, and closed it right at the low. This tends to
lock many traders into bad positions. That is, long traders
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unable to read the market or hesitant to sell based on weakness, so now they
become what we call weak investors.
• Point D : Wednesday. Here we have another huge range downbar, again closing right
at the low as it approaches support, plus the old 50% retracement.
These types of bars indicate further weakness.
• Point E : Thursday. Here we have a red downbar, notice the range has narrowed and
closed in the middle. Volume is just average. There is obviously some support on this bar
but you will automatically get this type of action when the market is oversold, which is
below the trend line. We have an automatic signal telling us that strength is coming in.
That being said, for real strength we want to see much higher volume than that.

• Point F : Friday. Here we have a blue upbar that reacted to the support seen on the
previous bar. However, having said that, the volume clearly shows a lack of demand.
Again, we need to study the action on Monday and Tuesday to see what the professional
money is thinking. When the market is oversold, you tend to get a bounce, but if
that happens on low volume (no demand), you can expect further weakness .

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Notice that volume appears to be bearish. It would be foolish to expect a bullish market on
bearish volume. Again, bearish volume is volume that increases on downbars while
decreasing on upbars. This is why you get upthrusts and demandless moves up in a weak
market. Bullish volume is the opposite - volume that expands on upbars while decreasing on
downbars. This is why you get tests and shakeouts in a strong market.
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Point A : Here we can see a copycat scenario of the US market. Huge volume on the upbar going into the new high zone.
There is huge supply and you can expect lower prices.
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• Point A : Monday. Here we have a strong blue upbar closing near the
high. We have a weak signal that automatically tells us there is no demand. We know
there was a slight gap up at the open that shows determination to push the price up.
The no demand signal may be close because there is no real stopping volume in the
background and we know if they were really bullish at this point they would probably want
to test the market rather than push it up like that. Easter is coming up and we know they
have all sorts of tricks up their sleeves to fool as many traders as possible over the long weekend.
• Point B : Here we have a large red downbar that closes near the low, with below average
volume. When you see large downbars closing near the low as they approach an old
support area, which is the trendline, this is usually a potential weak signal. This bar and the
previous bar almost look like a swing high, which is a weak signal.

• Point C : Here we have a red downbar falling below the trend line so we are oversold. The
bar closed in the middle with a very slight increase in volume. It clearly looks like some
support is built into this bar.
• Point D : Thursday. Here we have a blue upbar closing in the middle as it tries to push
above the lower trendline but notice the significant drop in volume. This is enough to
trigger an automatic signal that there is no demand. The market still looks weak.
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We can clearly see what caused this market to decline and it was the high volume on the upbar
at point A. That represents professional selling which is a weak signal.

• Point B : This is a blue upbar but look at the very low volume - quite obvious
The professional money saw the weakness on the previous bar and although the market was
pushed up, they did not participate in the upward move when it hit the upper trendline.

• Point C : This is a red downbar but of course now, this bar shows a failed test and a weak signal.

• Point D : Here we have a blue upbar but of course it is going up without demand, which is a
weak signal built in. We note, this market will be heavily influenced by the US market.

Tom Williams

- THE END -

City.HCM.
12:37 September 25, 2021 Thu Duc, City.

Thank you!