Wait for a reaction…

No changes from Friday

There are no opportunities to the downside

Short-term bulls should continue to consider new opportunities to the upside. However, they should wait for a reaction and successful test of the lows before new positions can be taken.

Intermediate and long-term bulls should maintain existing positions.

There are no intermediate or long term opportunities to the downside.

Intra-day: Changed to Neutral

Short Term: Down, but weakened and in an overbought position

Intermediate Term: Down, but weakened and in an oversold position.

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave traded very slightly lower on decreased volume. It closed in the upper half of a narrower price spread, in an overbought condition relative to the Technometer. The price spread and volume suggest a lack of supply.

A review of the intra-day waves indicates that today was a lack of demand day. After a fairly wide gap opening off Friday’s high, at point C, supply dried up as the Wyckoff Wave reacted to point D.

Then the Wave spent the rest of the trading day in a poor quality rally, which, may have ended at point E.

While some demand did come in near the end of the trading day, it was withdrawn and supply returned at point E.

Today’s market action weakened, and probably broke, the intra-day up trend channel. This is an indication that it will be difficult for the Wyckoff Wave to continue its move to the upside.

The Wyckoff Wave is also testing the high at point M. The supply coming into the market, during the last 15 min. of the trading day, suggests the test will be successful.

While the Wyckoff Wave may test the support line of the intra-day up trend channel, it is expected to react and test the lows at point X and H.

The Optimism – Pessimism Index reacted, but remains in its upward trend channel. It is in a very slight short term negative divergence with the Wyckoff Wave when compared with point H. However, as mentioned Friday, any move to the upside on Tuesday, would eliminate the divergence. It will be changed to a negative in harmonious action.

The Force Index continues to rally and is putting in moderate negative readings. There is no mitigating impact on the overbought Technometer.

Tomorrow the Technometer will open in a nearly overbought condition.

Today, after a wide gap opening to the downside, the Wyckoff Wave put in a poor quality rally and ended up back where it started.

The inability of the Wyckoff Wave to put in a good move to the upside, continues to suggest the Wyckoff Wave will react to test the lows at point G.

In addition to the price spread and volume conclusions, that scenario is supported by an overbought Technometer and a Force Index that is still producing moderate low readings.

Look for the Wyckoff Wave to react and test the lows.