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.WyckoffTurn this diagram sideways and you see what the chart of a stock or themarket looks like when it reaches the point of dullness:These dull periods often occur after a season of delirious activityon the bull side.People make money, pyramid on their profits and glut themselveswith stocks at the top.As every one is loaded up, there is comparativelyno one left to buy, and the break which inevitably follows would happenif there were no bears, no bad news or anything else to force a decline.Nature has her own remedy for dissipation.She presents thedebauch' with its start, its climax and its collapse, with a thumping headand a moquette tongue.These tend to keep him quiet until the damagecan be repaired.So with these intervals of market rest.Traders who haveplaced themselves in a position to be trimmed are duly trimmed.They lose their money and temporarily, their nerve.The market,therefore, becomes neglected.Extreme dullness sets in. Richard D.WyckoffIf the history of the market were to be written, these periods oflifelessness should mark the close of each chapter.The reason is: Thefactors that were active in producing the main movement, with its start,its climax and its collapse, have spent their force.Prices, therefore, settle into a groove, where they remainsometimes for weeks or until affected by some other powerful influence.When a market is in the midst of a big move, no one can tell how long orhow far it will run.But when prices are stationary, we know that fromthis point there will be a pronounced swing in one direction or another.There are ways of anticipating the direction of this swing.One isby noting the technical strength or weakness of the market, as describedin a previous chapter.The resistance to pressure mentioned ascharacteristic of the dull period in March, 1909, was followed by apronounced rise, leading stocks selling many points higher.This was particularly true of Reading, in which the shakeoutsaround 120 (one of which was described) were frequent and positive.When insiders shake other people out it means that they want the stockthemselves.These are good times for us to get in.When a dull market shows its inability to hold rallies, or when itdoes not respond to bullish news, it is technically weak, and unlesssomething comes along to change the situation, the next swing will bedownward.On the other hand, when there is a gradual hardening inprices; when bear raids fail to dislodge considerable quantities ofstock; when stocks do not decline upon unfavorable news, we maylook for an advancing market in the near future.No one can tell when a dull market will merge into a very activeone; therefore the Tape Reader must be constantly on the watch.It isfoolish for him to say: "The market is dead dull.No use watching it Richard D.Wyckofftoday.The leaders only swung less than a point yesterday.Nothingprofitable can happen in such a market".Such reasoning is apt to make one miss the very choicestopportunities -- those of getting in on the ground floor of a big move.For example: During the previous mentioned accumulation inReading, the stock ranged between 120 and 124 1/2.Without warning, itone day gave indication (around 125) that the absorption was aboutconcluded, and the stock had begun its advance.The Tape Reader having reasoned beforehand that thisaccumulation was no small investors game, would have grabbed a bunchof Reading as soon as the indication appeared.He might have boughtmore than he wanted for scalping purposes, with the intention of holdingpart of his line for a long swing, using the rest for regular trading.As the stock drew away from his purchase price he could haveraised his stop on the lot
