In plain terms — A Last Point of Supply is a weak rally after a Sign of Weakness: price tries to recover but makes little progress. “Last” does not mean that only one can appear, nor does it guarantee that a decline will begin.
Definition
In Wyckoff terminology, a Last Point of Supply (LPSY) is a weak rally that appears after a support test classified as a Sign of Weakness. Its spread tends to be narrow and the market has difficulty advancing. The cited sources attribute that difficulty to weak demand, substantial supply or both.
The school interprets LPSYs as demand exhaustion and the final stages of distribution before markdown. This is a structural reading, not direct observation of who is selling and not a promise that price will decline.
| Observation | Cautious reading |
|---|---|
| A weak rally after a SOW, on narrower bars | Action compatible with an LPSY |
| The rally stalls near former support, now possible resistance | Evidence consistent with difficulty recovering |
| Volume is high but upward progress is limited | Possible supply; it does not identify who is selling |
| Price recovers the range and develops new highs | Evidence against the LPSY classification |
Place in phase D
The cited sources often place several weak rallies in distribution phase D and label them LPSYs. The singular term is therefore conventional: one chart can contain more than one. After a major support break, a rally that returns toward that level and fails can perform a similar role during the transition to phase E.
Its relationship with the Last Point of Support (LPS) is symmetrical: an LPS is a contained reaction after a Sign of Strength in accumulation; an LPSY is a contained rally after a SOW in distribution. The symmetry is didactic, and real charts can be less orderly.
Teaching example — After a SOW carries price from 78 to 71.5, a rally reaches 74 on narrower bars and less volume than the decline. Former support at 74.5 is not recovered. The action is compatible with an LPSY; a sustained return above 74.5 with bullish follow-through would weaken the hypothesis.
Limits
- A low-volume rally is not an LPSY without a distribution context and a preceding SOW.
- “Last” does not imply a single event: several LPSYs can appear.
- A decisive recovery of the range can invalidate the reading.
- Spread and volume are relative to earlier waves, not universal thresholds.
- An LPSY is not a standalone trading signal, and the method supplies no universal statistical probability.
Sources
- Wyckoff Analytics — Wyckoff Method — LPSY definition and role in phases D–E.
- StockCharts ChartSchool — The Wyckoff Method: A Tutorial — weak rallies, multiple LPSYs and their relationship to SOW and support.
These sources document the school's technical codification; they do not empirically validate the LPSY's predictive power. Wyckoff Analytics and StockCharts publish substantially the same tutorial: they are cited as two locations for the same codification, not as independent confirmations.