Continue to take short positions

Their are no short-term opportunities to the upside.

Today’s market action offers short-term bears another opportunity to take new positions to the downside.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Neutral

Short Term: Neutral.

Intermediate Term: Down and in an overbought position, relative to the trend.

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on decreased volume. It closed near the bottom of a narrower price spread, in a clearly overbought condition relative to the Technometer. The price spread and volume suggest the presence of some demand.

A review of the intra-day waves indicates moderate supply was present throughout the trading day.

After a small gap opening to the upside and a brief 5 min. follow-through, supply came into the market and the Wyckoff Wave reacted to point Q. Then, it spent the next two hours and 40 min. in a poor quality rally to point R. There, demand was withdrawn and supply was present for the rest of the trading day.

The most interesting factor in today’s market action was not the presence of supply, but the lack of demand. Although, the Wyckoff Wave did not react as strongly as suspected, nothing in today’s market action suggests a reversal in the reaction to test point M scenario.

The Optimism – Pessimism Index reacted and is again testing the supply line of its upward trend channel. It is in a short-term negative divergence with the Wyckoff Wave when compared with point R. The longer-term negative divergences with points D, E, Z and X continue.

The Force Index reacted and is producing moderate negative readings. There is no mitigating impact on the clearly overbought Technometer.

Tomorrow, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave continued yesterday’s reaction. However, there was not nearly as much progress to the downside, as expected.

While supply controlled today’s market action, it was not particularly strong. Even so, the lack of demand did not present any indications the Wyckoff Wave was prepared to rally.

Those observations continues to be confirmed by the overbought Technometer and negative divergences with the O-P Index.

While I must sound like a broken record, the reaction back into the trading range scenario continues to have the highest probability of success.

On a longer-term basis, the market action throughout this trading range is not conducive to distribution. It continues to suggest the Wyckoff Wave is in an accumulation trading range. This is expected to lead to a positive ending action and a strong move to the upside.