Maintain Shorts

Click Here For Wyckoff Wave Chart 04-29-2016

Short Term:

Their are no short-term opportunities to the upside.

Aggressive short-term bears should maintain their positions and continue to look for opportunities to the downside. However, if supply dries up, position should be closed and stop orders moved to protect profits.

Intermediate & Long Term:

Intermediate and long-term bulls should maintain existing positions.

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

Market Trends:

Intra-day: Changed to Neutral..

Short Term: Neutral.

Intermediate Term: Neutral

Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on increased volume. It closed in the middle of a wider price spread, in a nearly overbought condition relative to the Technometer. The price spread and volume suggest the presence of supply.

A review of the intra-day waves confirms the above. After a small gap opening to the downside and a 15 min. rally to point C, moderate supply came into the market and the Wyckoff Wave reacted to point R.

The Wyckoff Wave rallied for the last hour of the trading day.

The brief rally to point Q broke the intra-day up trend channel. The intra-day trend is changed to neutral.

Today’s supply was not overpowering. This gives the Wyckoff Wave an opportunity to rally and possibly make an attempt to reenter the intra-day up trend channel. It is expected that this will fail. As demand is withdrawn at the top of the rally, it will form a supply point, which can be used when drawing a new down trend channel.

Today’s market action continues to suggest that the Wyckoff Wave will continue its reaction and at least test the lows at point F.

The Optimism – Pessimism Index reacted slightly, but remains in an overbought position relative to its upward trend channel. The negative inharmonious action with points D, B, Z and X continues.

The Force Index reacted, but is still producing low negative readings.

On Monday, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave continued its reaction off yesterdays high. However, supply, while certainly present was not dominant. This improves the possibility that the Wyckoff Wave will not react as deeply as expected, but instead, find some support in the area around the top of the trading range. The resistance line at the top of the trading range has been slightly adjusted to allow for a reaction to test the highs at points T and R.

If the Wyckoff Wave continues to react, as expected, it will be important to watch the relationship between the Wyckoff Wave and the O-P Index, when compared at point U.

If the Wyckoff Wave continues to react on reduced price spread, it will also be helpful to watch the Technometer to see if it moves into an oversold condition.

If supply continues to be moderate, or is begins to dry up, this scenario’s probability of success increases. However, if good supply returns early next week, the Wyckoff Wave still could react back into the trading range.

If this reaction develops, as expected, the Optimism – Pessimism Index could provide some helpful clues to its strength and length.