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    Wyckoff Expands Analysis

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    Richard Wyckoff noticed changes in the stock market in 1920, with more industries competing to lead the market compared to the previous decade when only a handful led market cycles. As diversity increased, he concluded he needed to consider more than just market action to identify future leaders. He began incorporating economic factors into his analysis as well, such as money, credit, and how they impacted business environments, as the economy expanded after World War I and new structures like the Federal Reserve took shape.

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    Wyckoff Expands Analysis

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    Richard Wyckoff noticed changes in the stock market in 1920, with more industries competing to lead the market compared to the previous decade when only a handful led market cycles. As diversity increased, he concluded he needed to consider more than just market action to identify future leaders. He began incorporating economic factors into his analysis as well, such as money, credit, and how they impacted business environments, as the economy expanded after World War I and new structures like the Federal Reserve took shape.

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    Richard Wyckoff noticed changes in the stock market in 1920, with more industries competing to lead the market compared to the previous decade when only a handful led market cycles. As diversity increased, he concluded he needed to consider more than just market action to identify future leaders. He began incorporating economic factors into his analysis as well, such as money, credit, and how they impacted business environments, as the economy expanded after World War I and new structures like the Federal Reserve took shape.

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    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views1 page

    Wyckoff Expands Analysis

    Uploaded by

    L
    Richard Wyckoff noticed changes in the stock market in 1920, with more industries competing to lead the market compared to the previous decade when only a handful led market cycles. As diversity increased, he concluded he needed to consider more than just market action to identify future leaders. He began incorporating economic factors into his analysis as well, such as money, credit, and how they impacted business environments, as the economy expanded after World War I and new structures like the Federal Reserve took shape.

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    © All Rights Reserved
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    of 1

    34 HOW LEGENDARY TRADERS MADE MILLIONS

    however, a start to some new exciting technological developments: the radio


    would be introduced as the new communication medium. The year 1920 also
    experienced an economy that was slowing down, as a recession began to set
    in while construction and crop prices were falling, which back then were vital
    industries to the American economic landscape. Because the market reflected
    an outlook of slowing conditions, many leading stocks, as they do when the
    market experiences heavier selling rather than buying power, pulled back and
    fell with the market. A few of these were American Woolen closing the year at
    $601⁄2, which was off from a high of $165; Baldwin Locomotive, which closed
    1920 at $86, which was off from a high of $1181⁄2; and Crucible Steel, which
    fell from a high of $278 in April to $75 by year-end, or a fall of 73%. This lat-
    ter decline shows how the prior steel leader was caught in an industry rota-
    tion that was just beginning. Early 1920 also witnessed a time when many
    racial riots were beginning to unfold in many major cities throughout the
    country. It would be a tumultuous beginning to a decade that was about to
    witness both historical highs and lows for the stock market.

    Wyckoff Expands His Analysis

    Richard Wyckoff, during his continued study of the markets, remarked in


    1920 that the market was changing. He noticed how, after the war had ended,
    that there were many more industries vying for the lead in the market. This
    was in contrast to the preceding decade when really only a handful of indus-
    tries seemed to lead most market upward cycles. There also were more stocks
    to follow currently as diversity began to increase. As we will see he was correct
    in his thinking as more consumer-related industries began to crop up in
    addition to the existing industrial industries. Through his observation he
    concluded that he needed more than just pure market action to discover the
    real standout leaders for the future. Since the economy seemed to be in an
    early stage of expansion from a widening-out position and with recently
    enacted organized structures in place that had exertive powers such as the
    Federal Reserve, Wyckoff thought he needed to correlate many economic fac-
    tors into this study as well. He thought that money and credit issues should
    be considered for their impact on the overall economy and how they directly
    affected profitable operation environments for organizations. With this new

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