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Signs of Weakness
By Lauren Snedeker
Objectives for Today
• Learn to read a chart and detect weakness in
the market
• Learn how Supply and Demand play a role in
detecting weakness in the market
• Come away with one clear VSA Principle in
your mind
Supply/Demand
$200
Price
For
Uggs
Boots
• Spread= Massive
• Trend = Up
The UpThrust
• Up Bar
• Bottom Close
In a downtrend
No Volume
Confirmation at the 30 minute
Trap Upmove (Bar B)
Based on two bars: 1st closes up off the highs
2nd widespread down bar closing near the
lows
2nd bar’s high is higher than the 1st bar,
tricking people into going long
If low volume (no selling) & weakness in bkgrd
it is a strong sign of weakness – can lead to a
strong rally – Bar A = Weakness in
Background
Failed No Demand
Why it failed
• The volume was fairly high
• The next bar closed up on higher volume
• The Supply Coming In bar right before it had a
lot of volume = a lot of selling to do before it
can go down again
• Not until the UpThrust and then the down bar
on lower volume do you see the short
Conclusion
• Weakness appears on an UP Bar
• Short when you are in a downtrend
• Use the UpThrust as the middle signal
• No Demand is a confirming signal of serious
weakness behind you
• Be Patient!!!!!!!
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