Short Positions closed…

Their are no short-term opportunities to the upside.

As good supply did not come into the market, short-term position to the downside should have been closed.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Up.

Short Term: Neutral.

Intermediate Term: Neutral

Long Term:  Neutral

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

A review of the intra-day waves indicates that, while supply was present, it did not come in until the afternoon. The morning’s market action featured a lack of demand.

After a gap opening to the upside, the Wyckoff Wave immediately encountered supply and reacted sharply to point P. Then, it put in a week rally to point Q. The overall lack of progress, coupled with the relatively narrow price spread and volume suggested a lack of demand.

Supply returned at point Q and the Wyckoff Wave reacted. However, the supply was not overpowering. This suggests the Wyckoff Wave could still rally and test the high at point Q.

The Optimism – Pessimism Index rallied slightly. It is in harmony with the Wyckoff Wave when compared with point R. It is also in a negative in harmonious action with the Wyckoff Wave when compared with points D, B, Z and X. This is less significant than a negative divergence.

The Force Index rallied and is now producing low negative readings.

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

Today, the Wyckoff Wave advanced on poor demand and appears to be in the process of establishing a higher resistance point in the developing trading range. This is scenario #4 that was discussed in yesterday’s report.

Today’s market action does not appear to be an upthrust.  Although price spread narrowed and volume increased, strong supply did not come into the market and the Wyckoff Wave closed in the middle of the trading range. Those are not the characteristics of an upthrust.

While the Wyckoff Wave did not rally strongly through the resistance into new high ground, that scenario cannot be eliminated until the Wyckoff Wave puts in a noticeable reaction.

Scenario #1 is also still in play as the Wyckoff Wave could certainly react, test and/or penetrate the lows at points S and U.

The neutral Technometer is not suggesting an immediate turnaround. In addition the O-P Index is moving back into harmony with the Wyckoff Wave. This indicates some relative strength.

Although the Wyckoff Wave could certainly put in a strong rally, the market action, to this point, has been marked by a lack of demand. It still appears the Wyckoff Wave will react back into the trading range.

Regardless, Wyckoff discipline maintains that if the market did not behave as expected, position should be closed. That was the case. It was expected that the Wyckoff Wave would test the top of the trading range and react. Instead, the Wyckoff Wave rallied slightly past the resistance. While the reaction may happen tomorrow, the possibility the Wyckoff Wave could continue to rally could put short-term bears in a difficult position.