Hi there!

Dictation is harder than spelling, and the way spelling is done in HOD is a stepping stone for dictation. So, I'd continue doing the spelling, making sure to do the CM style lessons planned with them in the LA box of the guide. I know we probably all grew up doing spelling lists, by studying them and taking a test, but the way the plans are written in the HOD guide is totally different. It applies the idea of the mind being like a camera taking a "picture" of the word each time it sees it.
So, Day 1 always has them look at one word written in black on an index card. Study it, and when child says he is ready, take the card away and child writes just that one word on his marker board. If he misses it, right away, erase it and show him the card again (to erase that incorrect "picture" in his mind immediately), and when he says he is ready, take the card away until he writes it correctly. I'd be sure to only do List 1 with dd too - not List 2 - I know some moms who have done both lists at the same time - this not necessary unless that is something a family has as a personal goal for some reason. Then, Day 2's spelling has you just saying the word, using it in a sentence. The child tries to write the word from memory, but if they miss it, erase it immediately to erase the incorrect "picture" and show him the index card, allowing him to study it as he did on Day 1 and then write it. On Day 3, you only pick 3 words the child needs to practice the most. One word at a time, the child should use the word in a sentence orally, as you write the sentence on markerboard for them. Then, the child looks at the markerboard to copy the sentence on paper. You help the child correct any mistakes then. Finally, on Day 4, you say the word, use it in a sentence, and child tries to write it correctly. This time, if it is missed, erase it, and show the child the index card again. Have them fix it on their paper, and while looking at the index card, do the activity to review missed words (it rotates each week).
So, really, in all of this, there is not a time where the child is failing spelling because it's more of a team effort between parent and child to work on a method of spelling, rather than a child studying a list and taking a test at the end. I say all of this as much for other moms who may be new to this method of spelling, and may be thinking of spelling lists being done in the more traditional way. Finally, this method of spelling provides an important foundation for dictation the following year. You can see the using it in a sentence, copywork of sentences, studying a word and having it taken away then, fixing errors, etc. all prepare dc to do dictation the following year.
Keep plugging away with it

- it will click when those inaccurate pictures of words are erased from a child's mind and are replaced with correct pictures because he has seen it correctly spelled so many times (hence the copywork part of it as well) rather than seeing it incorrectly so many times without it being erased. HTH - and rest assured, you are not alone in this. It took my ds a bit to get used to this, but it has paid off in dividends over time.
In Christ,
Julie