Wyckoff Theory
Master the art of reading institutional footprints through Wyckoff methodology. Understand accumulation, distribution, and trade with smart money.
A retest of the Selling Climax area
What It Is
The Secondary Test is crucial for confirming that the Selling Climax was genuine. Price returns to the SC area, but this time on lower volume. If selling truly has been absorbed, the ST should hold above or near the SC low without the same panic. The ST tells us whether Smart Money's absorption was successful. Lower volume on the retest means fewer sellers remain—supply is being absorbed. If volume expands again on the ST, it suggests more selling pressure exists, and the SC may not have been the true bottom. Multiple Secondary Tests can occur in an accumulation phase, each ideally showing decreasing volume.
Secondary Test (ST) - Visual
Price Behavior
- Price revisits SC lows
- Smaller candles than SC
- May slightly undercut SC low (testing support)
- Often forms higher low vs SC
- Recovery is typically faster than the decline
Volume Behavior
- Volume significantly LOWER than SC—this is the key
- Shows selling pressure is exhausted
- Declining volume confirms absorption
- Any volume spike without new lows is bullish
What It Means
- Confirms the SC was the climax of selling
- Smart Money continues absorbing quietly
- Supply is drying up
- Foundation for markup is strengthening
If the ST shows equal or higher volume than the SC and price breaks to new lows, the accumulation thesis is invalidated. Re-evaluate the structure.