Watch and wait continues.

Watch and wait continues. The market is sending mixed signals as if works its way through the trading range.

There are no short-term opportunities in either direction.

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: Changed to Up.

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 higher on increased volume. It closed near the top of a wider price spread, in a low neutral condition relative to the Technometer. The price spread and volume suggest the presence of demand.

A review of the intra-day waves confirms the above. After a wide gap opening to the upside, demand continued and the Wyckoff Wave rallied for the entire trading day.

Demand was strongest during the morning hours, which ended with a strong intra-day up wave to point I. There, demand weakened and the Wyckoff Wave made little progress during the last 3 hours and 15 min. of the trading day.

The Wyckoff Wave is attempting to return to the intra-day up trend channel, drawn in blue. If demand had remained constant after the move to point I, there is a good chance the Wyckoff Wave would have returned to the channel. The withdrawal of demand puts the advance in jeopardy.

Unless strong demand returns and the Wyckoff Wave continues to rally, it is still vulnerable to react and test the lows at points H and V.

The Optimism – Pessimism Index rallied and remains in its upward trend channel. It is in a very short-term negative divergence with the Wyckoff Wave when compared with point N. The longer-term negative divergence with the Wave when compared with points D, B, Z and X remain in place.

The Force Index rallied and is producing moderate negative readings.

Tomorrow, the Technometer will open in a low neutral condition.

Today, the Wyckoff Wave surprised, rallied and put in a strong close. This changes the short-term trend from neutral to up. The new trend lines of been drawn in blue.

While today’s market action does give the Wyckoff Wave an opportunity to continue the rally off point M and test the top of the trading range, the overall quality of the rally has not been strong.

The relative weakness of the demand coming into the market is seen on the O – P Index chart. On a very short-term basis the Wyckoff Wave is higher than it was at point N. The O – the Index is noticeably lower. This continues to suggest strong demand has not yet made an appearance.

If the rally continues, the Wyckoff Wave will run into resistance as it approaches the bottom of the earlier sideways movement marked by points E, C, A, Y and W. This resistance, coupled with the moderate demand levels, continue to suggest that, while the Wyckoff Wave may continue to rally, it will have a difficult time moving past a trading range highs.

Conversely, the Wyckoff Wave could certainly react and once again test the lows at point O.

While the future short-term direction is unclear, the trading range continues to look more and more like accumulation.