Preliminary Supply (PSY)
When initiating a Distribution Schematic, It's the first attempt to stop the climb that will always fail. PSY is typically followed by a dismal retracement (as seen in the Home Page) before trading up into its Climax
Before the confirmed Preliminary Supply/Stop takes place, sometimes we would find that market has tried to create PSY multiple times, though not always. If there are multiple, they should be labeled as potential Preliminary Supply.
The fact of seeing repeated Preliminary Supply suggests that institutions have been eliminating demand from the market and when the last PSY becomes visible, there will be few who are willing to buy, which results in the final thrust to confirm the next step within PHASE A
Sometimes, you will not be able to identify a PSY. Don't let that stop you from identifying a schematic.
Buying Climax (BC)
Definition: Climate action that stops the upward movement.
BC is followed directly after a PSY and followed up by a Automatic Reaction. The BC gives you context as to whether or not you could expect to successfully trade into PHASE B, PHASE C etc. The Climax typically distributes higher than the PSY, and retraces over 50% from the New Found HL produced from the retracement of the PSY(refer to images) to the BC. It is an observation to determine confluence, not a trade..
Sometimes when you don't see a visual representation of a PSY, the BC is acting as both PSY and BC.
At the event when unfolding, the BC is not definite. Further data is req.
Automatic Reaction (AR)
Definition: Bearish reaction following the Climax that sets the Minimum Range / Trading Range. This shows supply / buyers lack of interest
Secondary Test (ST)
When in Distribution, The secondary test falls after the AR, confirming to you that you are in fact, witnessing a schematic unfolding. The ST is important as it shows you that you have a Change Of Character (CHoCH). The ST can be both, below and above the BC, you can confirm a ST by assessing the Volume used when initiating the ST. It ultimately is there to test of the level of demand in relation to climate
action. Establishes the end of Phase A and the beginning of Phase B.