What is the Last Point of Supply (LPSY) in Wyckoff?
The Last Point of Supply is the final weak rally within a distribution range before a potential markdown. Buyers try to push price higher but fail to reach the prior high, suggesting that sellers control the range.
How It Works
The LPSY occurs in Phase D, after the Sign of Weakness has broken below range support. Price bounces back toward what used to be support, now acting as resistance, but the rally is shallow and volume is light. Buyers can't generate momentum because institutions are selling every bounce. Where the LPS in accumulation is a shallow pullback that supports continued demand, the LPSY is a weak rally that suggests supply remains dominant. It forms a lower high relative to the upthrust, establishing a clear downward lean within the range. Multiple LPSY events can form in Phase D, each making a lower high as the range tilts into markdown. Each rally is weaker than the last, and the message gets louder each time. For short sellers, the LPSY is the entry with the tightest risk. Your stop sits above the LPSY high, and the target is the markdown below the range.
Why It Matters
The LPSY is the last bounce before markdown. A weak rally on declining volume after a SOW tells you supply still controls the range. If you missed the UT entry, the LPSY gives you a second shot with a tighter stop.
Common Mistake
Thinking the bounce after the SOW means the range is holding. Compare its volume and reach to earlier rallies. If it falls short of prior highs on declining volume, it's not recovery. It's exhaustion.
Example
After the SOW, price rallies back and pushes above the prior range support level on increasing volume. It reaches the old range midpoint and holds. That's not an LPSY. It's a rally with genuine demand behind it. A real LPSY fades on light volume and falls short of the prior high. If volume picks up on the bounce, step back and reassess the distribution thesis.
Stoic Insight
Epictetus: 'Circumstances don't make the man, they only reveal him to himself.' The LPSY reveals the range for what it is. The bounce looks hopeful, but the volume shows sellers are still in control. Read the reveal, not the hope.
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