Lack of Demand…

Their are no short-term opportunities to the upside.

Aggressive short-term bears should maintain their positions. Today’s lack of demand reduces the probability that the Wyckoff Wave will put in a strong rally.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Down, but in an overbought position.

Short Term: Neutral.

Intermediate Term: Neutral

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 neutral condition relative to the Technometer. The price spread and volume suggest a lack of supply.

Interestingly, a review of the intra-day waves indicates that today was a lack of demand day.

After a small gap opening to the downside off point F, the Wyckoff Wave reacted to point G. The reaction was on some supply and a lack of demand. The first and third intra-day down waves were on wider price spread and lower volume then the preceding up wave. This is an indication of a lack of demand. The second wave was on good price spread and volume, which indicated the presence of supply.

Then, the Wyckoff Wave spent the next two hours and 50 min. in a poor quality rally to point H. This also suggested a lack of demand. Finally, supply came into the market during the last hour of the trading day.

The Wyckoff Wave is in an overbought position relative to its intra-day down trend channel. Today’s lack of demand and the presence of some supply suggests the Wyckoff Wave will react and return to the intra-day down trend channel.

The Optimism – Pessimism Index rallied and remains in an overbought position relative to its upward trend channel. It is also moved into a short-term negative divergence, with the Wyckoff Wave, when compared with point V.

The Force Index rallied slightly and continues to produce moderately negative readings.

Tomorrow, the Technometer will open in a slightly overbought condition.

Today, the Wyckoff Wave reacted on reduced price spread and volume. While that normally indicates a lack of supply, today’s lack of demand and the presence of some supply, suggests the reaction off point V may not be complete.

This is supported by the Technometer moving into an overbought condition for tomorrow’s opening and the developing short term negative inharmonious action with the Wyckoff Wave and its O – P Index.

The two prevailing scenarios continue. The Wyckoff Wave could put in a small rally and test the high at point V. There is a good probability the test will be successful and the Wyckoff Wave will react back into the trading range.

The second scenario simply has the Wyckoff Wave continuing its reaction back into the trading range.

It should be noted that if the Wyckoff Wave rallies to attempt to test point V, the Technometer will become overbought and there will be a negative divergence with its O – P Index. This would make it very difficult for any test to succeed.

Regardless of which scenario plays out, it appears the result is expected to be the same.