Please explain... Discussion, page-9

Hi Goneflying. Share price is a reflection of what professional money want it to be. Of all spec companies' shareholders, TON shareholders should know this by now - as it's been most obvious here. How many great announcements have done nothing for the share price? How many great announcements have there been since price topped at 90c last year?

Nothing new here though. It's been this way for a century.

At the moment, price is in a trading range where pro money accumulates. When the time is right, it will be marked up and then distributed.

Length of period of accumulation determines the size of the mark up ie Wyckoff's 3rd law - Cause & Effect:

The Law of Cause and Effect

This law states that in order to have an effect you must first have a cause, and that effect will be in proportion to the cause. This law’s operation can be seen working as the force of accumulation or distribution within a trading range that works itself out in the subsequent move out of that trading range.

The idea is to measure this cause and project the extent of its effect. The excesses that develop in supply and demand are not random but are the result of key events in market action or the result of periods [candles] of preparation. Wyckoff teaches what these developments are and how to judge when they are unfolding in time to take advantage of the excesses in supply or demand that will follow.






Look familiar?








Wyckoff would use a Point and Figure chart to measure the cause. Here is one below. I have a 70c target based on the cause built so far should price be market up now.




As we can see the current trading range is almost the same as the one that led to the 90c move even though that point and figure trading range lasted for 3 years, and the current one for 3 months. This is because PnF charts only plot a new X or O when price has moved by a certain amount.

In effect what is happening now is that the accumulation appears to be far more aggressive than from 2011-2014.

Remember - that the longer the period of accumulation - the greater the eventual move (cause and effect). Think of it as energy being built up.