Jiraiya has given Naruto the task of rotating the water in the balloon so that it pops. Naruto is confident that he'll accomplish this stage of the training by tonight.
Jiraiya naps while Naruto struggles, and by evening, Naruto begs Jiraiya for a tip. Jiraiya looks at Naruto's hair swoosh to learn he's a clockwise rotation. In order for the technique to work, he'll have to counterbalance his body clockwise energy with his spirit chakra and rotate the water in the balloon counterclockwise. With renewed confidence, Naruto vows to complete the technique in three days. Jiraiya casually informs Naruto that it took three whole years for the Fourth to fully master this technique - its difficulty is ranked the second highest of six levels and it is considered an A-rank supper high ninja technique. He must master it in three steps and popping the balloon is only the first.
Jiraiya leaves Naruto to train and heads back to town where he is immediately distracted by a few girls.
Naruto continues his training for the next three days but can't manage to pop the balloon. Now frustrated, he tries to access what he's doing differently from Jiraiya. After breakfast, he notices a cat playing with a water balloon. It bats the balloon back and forth between its paws until the balloon pops. Naruto suddenly understands. Happily, he goes shows Jiraiya, who still reeks of alchohol, what he's learned. He uses his left hand to mold the balloon with random movements until it pops in his hand.
Jiraiya thinks Naruto's technique is weird but is happy Naruto finally understood the technique. Naruto explains that he noticed that when the cat played with the balloon, it rotated the water in a number of directions. He remembered that when Jiraiya demonstrated the technique, he too rotated the water in multiple directions. But until then, Naruto had only rotated it in the same direction.
For Naruto's second stage, Jiraiya tells Naruto he must pop a rubber ball. While the first step emphasized rotation, this step focuses on power. And because there is no water in the ball, the task will be more difficult. Naruto asks Jiraiya to stay and train, but Jiraiya refuses and acts as if he has no obligations to train him.
For the next few days, Naruto tries repeatedly to break the ball, but fails each time. Jiraiya senses his frustration and asks him to take a break and go buy food in town. There, he overhears a kid asking his father for a popsicle. The father splits the two sides down the middle and gives his son half so not to spoil his dinner. Later, Naruto again asks Jiraiya to supervise his training and again Jiraiya refuses coldly. This is a technique Naruto must learn on his own. Jiraiya passes the next three weeks with the girls he met while Naruto continues to try to master this technique.
Finally, Naruto realizes that the ball won't pop unless he can make it pop as quick as possible. He puts all his effort into it and this time, a small hole appears in the ball and the air leaks out. Jiraiya congratulates him for coming this far and hands him a popsicle. He then asks Naruto for his right hand and places a black spiral in the center.