What is a Sign of Strength (SOS) in Wyckoff?
A Sign of Strength is a rally on expanding volume that pushes price toward or above the upper boundary of an accumulation range. It suggests that demand has taken control and that markup may follow.
How It Works
The SOS appears in Phase D, after the spring. Where secondary tests showed declining volume and indecision, the SOS shows the opposite: a decisive advance with volume building bar by bar. A textbook SOS pushes price above the AR high. The volume pattern is what separates it from a normal bounce within the range. You want to see progressively larger bars on the advance, not a single spike that fades. If the spring created a higher low and the SOS breaks above the AR high, you have a structural shift: higher lows and higher highs. The range is telling you which direction it wants to resolve. Markup hasn't started yet, but the range has picked a side. The SOS followed by a Last Point of Support pullback is the classic accumulation entry: the SOS shows demand, the LPS may offer a potential entry area.
Why It Matters
The SOS suggests the spring wasn't a fakeout. Until it appears, you're speculating about whether accumulation is complete. An SOS that clears the AR high on expanding volume shifts the read from 'possible accumulation' to 'probable markup.'
Common Mistake
Chasing the SOS at the top of the move. The SOS is confirmation, not an entry. It tells you accumulation is working. The trade comes on the LPS pullback that follows. Buying the SOS itself puts your stop far below, near the spring low, giving you poor risk-to-reward.
Example
After the spring, price rallies toward the range ceiling and you mark it as a SOS. But volume fades halfway through the rally and price stalls well below the AR high. That's not a sign of strength. It's a bounce within the range with no institutional conviction. A true SOS shows volume expanding on each bar of the advance, building momentum rather than spiking and fading.
Stoic Insight
Marcus Aurelius: 'Waste no more time arguing about what a good man should be. Be one.' The SOS ends the argument about whether the range was accumulation. Stop debating the structure and start acting, on the pullback, not the rally.
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