Hi gj, yep springs and upthrusts are worth following for sure, particularly in large liquid markets (where they work best).
However, just be aware the upthrusts like you mention (Wyckoff style upthrusts, as opposed to VSA style upthrusts....which refer to the actual bar shape) work best with potential weakness behind them, after a recent price breakdown, or when price is already in a downtrend.
That is not to say that you cannot take a position against those scenario's, just that that is where they usually work best and most consistantly on average.
FWIW, at the minute the XJO has seen no recent serious weakness, is already in an uptrend, with strength behind it (Trump Shakeout, and further potential support - 30th Nov & 16th Dec).....so more evidence of weakness would be needed before opening a position IMO.
And the mirror image same for a spring, they usually work best after some decent strength has already been seen (like climactic action of some sort), or after a price breakout from a trading range, accumulation zone etc, or when price is already in an uptrend.
Yes, the late December trading, if it fails, would be considered an upthrust of the 1st Aug high.
Just be aware that you don't 'just take the position' when potential support or resistance is tested (spring or upthrust), you should just be aware that a particular scenario may take place at this level, and you begin looking for more evidence to support that view, before opening the position. For example, if price did break below the horizontal line drawn across the 1st Aug high with some 'intent', then price attempted to recover, but showed weakness, then that would be a decent reason to open the position. (this would be trading the test of a breakdown, after the upthrust)
Just a couple of other notes that go along with this discussion - generally, the little tiny or smaller springs and upthrusts work better than big fat deep springs and upthrusts. This appears to me because when support or resistance at a certain level kicks in strong and hard as soon as a level is tested, it shows that the support or resistance is 'ready and waiting' and is strong.
When this occurs it generally produces quite a tiny or small spring or upthrust.
But when price is allowed to push deeply beyond potential the support or resistance before enough of a response can be mustered to recover (causing a deep or fat spring or upthrust), this shows that the potential support or resistance may be vulnerable, and a further similar effort may overwhelm price causing a breakout or breakdown.
Finally, springs and upthrusts are generally thought of at serious pivot highs and lows, however they don't have to always occur at these points. They can also occur after a minor breakout or breakdown of a range...eg- a spring of the test of a breakout, or an upthrust of the test of a breakdown. These are often more common, and when correctly interpreted, are a more consistent trade.
Hopefully all that makes some sort of reasonable sense.....
cheers
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