$ZILUSD - The Wyckoff test.NOT FINANCIAL ADVICE.
This is my first ever attempt to jump onto the Wyckoff's method bandwagon after spending weeks of reading and testing.
This post is as much an effort to figure out $ZILUSD's trend as it is to grow my understanding in this school of thought.
As such, I welcome all feedbacks, criticisms, advices, and where I might have erred a thing or two, my apologies in advance.
Wyckoff's Method
Richard Wyckoff established simple but powerful observational rules for 4 trend recognitions: Accumulation, Markup, Distribution and Markdown -- but nothing is really that simple, right?
Within this debilitating chart, which looks nothing like your standard Wyckoff schematics, it is pretty difficult to pinpoint in which trend $ZIL is in.
One thing for sure though is that we see contracting volume, a recipe ripe for volatile price action.
Contracting volume
One of the key tenets of Wyckoff's method, volume relates to supply and demand.
We see preliminary supply (PSY) contracting circa Dec 2020.
However, I find it difficult to confirm if we are in a distribution trend, as we see characteristics of upthrusts (UT), or if we are in a re-accumulation trend, where we see signs of strengths (SOS) aplenty.
$0.10 will be the critical point of support, while $0.15 is the crucial wall of resistance that Bulls need to break to induce retail confidence and invoke a 'spring' out of this creek, which is the highlighted red rectangular zone.
This 'creek' will be a point of particular interest in the next few weeks (or months even).
Whether price will jump from (SPRING) or if it is the last point of supply area (LPSY), perhaps practicing caution is not such a bad idea until we see further price (and volume) action.
Until then, happy trading~!
