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Module 14 of 176 min read

Sign of Weakness (SOW)

The sign of weakness — a decisive, high-volume break down out of a distribution range — and how it confirms supply has taken control.

After this module you'll be able to recognise a sign of weakness and use it to confirm that a markdown may be beginning.

Important: This is educational content only, not investment advice. Trading involves substantial risk of loss. Never trade money you cannot afford to lose.

A sign of weakness, or SOW, is the mirror of the SOS: a decisive break down out of a distribution range on expanding volume and wide down-candles. It confirms that supply has finally overpowered demand.

A sharp break down, sign of weakness
A wide, high-volume break below the range — a sign of weakness.

What makes it convincing

A genuine SOW shows effort and result agreeing to the downside: heavy volume and wide spread driving price clearly below the range lows, with demand unable to defend support. It typically breaks prior swing lows, flipping structure from sideways to down.

The weak rally that follows is often the last point of supply (LPSY) — a lower high that fails on light volume beneath the broken support. That failed bounce frequently offers a lower-risk short than selling the initial break.

A sign of weakness is a wide, high-volume break down out of the range — supply confirming the start of a possible markdown.

An SOW confirms weakness but is not a guarantee; breakdowns fail and can turn into springs. Prefer entries on the LPSY with a stop above it, keep size sensible, and let price confirm the markdown rather than front-running it.

Keep going

Important: This is educational content only, not investment advice. Trading involves substantial risk of loss. Never trade money you cannot afford to lose.