Hey trader,
Microsoft is down 15% from its highs.
That’s cheap for a tech growth company. And no matter what happens in Iran, Microsoft should do well…
…except for one problem…
The worst isn’t behind them. It’s about to hit them head-on.
Anyone who falls into this trap, one I’ve seen time and again over the past four decades, doesn’t just lose money…they obliterate their account!
Fortunately, just by reading this, you’ve already won half the battle. You’re aware of the danger.
Now, it’s time to understand the enemy so we know how to defeat it.
Allow me to introduce you to the Wycoff Method, a truly unique five cycle framework that only a few elite traders know about.
What the Wyckoff Method Actually Is
The Wyckoff Method breaks every market top into five distinct phases of distribution.
- Phase A is the preliminary supply. Big institutions quietly start unloading shares after a prolonged run higher.
- Phase B is the buying climax. The public rushes in on euphoria…while institutions use that demand as cover to dump their remaining positions.
- Phase C is where the trap gets set. There are secondary tests and upthrusts that look like recoveries, and dip buyers pile in convinced the worst is over.
- Phase D is where the neckline breaks.
- Phase E is the markdown, where the trend accelerates lower and the real damage gets done.
Why This Matters Right Now
I overlaid these five phases directly onto the S&P 500 during today's broadcast.
The buying climax hit in January, and Phase B played out as the market chopped sideways.
The upthrust after distribution sucked in one more round of buyers…and now the real selling has started.
We are between Phase C and Phase D right now. The market is only down about 5% to 6% for the year, and I need a standard 10% correction before I even flinch.
Here's what confirms we're nowhere close to a bottom:
- The overhead supply hasn't been removed. Every trader who bought in January and February is waiting to sell into any rally, and that supply caps every bounce.
- Nvidia and Western Digital are sitting at RSIs of 99. Institutions quietly exited months ago, and retail is holding the bag at the top of the buying climax.
- End-of-quarter window dressing is making this worse. Managers are selling 52-week lows and buying 52-week highs just to hide their mistakes before blotter day.
How to Apply It
The way to use this is straightforward.
You look for stocks that have already completed the Wyckoff accumulation cycle on the other side.
I showed my audience a stock I own at $98 that did exactly that.
It had the selling climax and then made a higher low. All the overhead supply was absorbed and flipped underneath price.
I bought it, sold it higher, and bought it back again. The broader market has dropped 600 points since my original entry…and I'm not losing money.
The key is overhead supply. When fearful sellers are still sitting above your entry, every rally becomes somebody else's exit.
You want to own names where that supply has already been exhausted below price.
The Bottom Line
I told my Genesis COG members not to talk to me until next Wednesday. What we own was bought near the lows, and once the quarter ends, the rotation back into value begins.
The Wyckoff Method works because human behavior at tops and bottoms never changes. I've spent 39 years learning that lesson so you don't have to.
The quarter ends in days. The window to get positioned alongside me is closing.
Join the Genesis COG System before the rotation starts →
Professor Jeffrey Bierman
Creator of the Genesis COG System