Trading the Wyckoff way: Buying springs and selling upthrusts

Before the rudiments of technical analysis were spreading like wildfire via the Internet, bookstores and television, the general public or “the crowd,” would join a trend only after it had been well underway. Nowadays, however, “the crowd ” often rushes into a stock, a sector or a market at the first clue of a price breakout from a congestion zone. But as Joseph Granville, a famous technical analyst and trader, once said, “[In the markets], whatever is obvious is obviously wrong.” So, if the crowd is rushing in at breakout time, who is left to take the other side of the trade? The answer is the better- informed professionals, who have conditioned themselves to act in accordance with another old saying, “One should fear to tread where fools rush in.” Hence, if you want to trade like the professionals, and not count yourself among the fools, you may want to sell a breakout rather than buy it — especially when the popular stocks of the day are under consideration.