The 8 palace yellow spring water theory is called ba gong huang quan shui (八宫黄泉水) in Chinese.
It is one of the classic water theories in feng shui meant to identify inauspicious water outflow from a property based on the direction the water exit is flowing.
Based on the sitting of a house, the inauspicious direction can be identified.
The 24 directions can be grouped into 8 of the cardinal and ordinal directions as each of the 3 mountain on each main direction would share the same properties.
The table below would better illustrate this.
Legend of the 24 mountains can be found here.
In application, if the water drainage of a house that sits on W3 is leaving the premises from the direction SE3, then this is deemed as very inauspicious according to 8 palace water theory.
The homeowner needs to change the configuration of the drainage system in order to escape this feng shui predicament.
The obvious next question would be which alternative direction should the water exit be?
The answer is anywhere but the unlucky direction.
Be mindful that roads can be classified as virtual water too. So their exit directions from the house should also be taken into consideration.
The drawback of the 8 palace water theory is that it only serves to identify bad exit directions and does not tell a practitioner exactly which exit direction would be auspicious.
It also does not share any information about auspicious water entry directions.