Springs can be a little confusing. There are #1 Springs, #2 Springs,#3 Springs, #2+ Springs or 23 Springs, #2- Springs or 21 Springs, Shakeouts, and Terminal Shakeouts. Originally, Wyckoff only spoke about Shakeouts. His Shakeout idea was later refined into the idea of the spring. One big difference between a shakeout and a spring, is that a shakeout uses fear to shake people out of their long positions. A shakeout is sharp reaction within a trading range or within an uptrend. If it occurs within a trading range, it will generally make a sharp penetration of the bottom of the trading range, often by several points. You will then see a quick recovery.

A #1 Spring can often look like a Shakeout as it penetrates the bottom of the trading range. So how do you tell the difference? A #1 Spring has overwhelming supply, and extreme price weakness on heavy volume. You should see wide spread. On a #1 Spring,the stock penetrates the bottom of the trading range, and unlike the Fall through the Ice, never looks back. It continues to drop on heavy sustained volume, until the decline is finally halted. #1 Springs tend to occur in sustained downward movements where the objective has not been reached and you are experiencing a temporary lateral movement (trading range).

Another clue on to how to determine the difference between a #1 Spring and a Shakeout is by examining the prior action in the trading range. With a shakeout, you will often see higher bottoms and higher tops. Everything will be looking positive and then you get slammed with a shakeout. With a #1 Spring, you will not see this positive action.