A Little Rolling Over

Friday, October 7, 2016

What To Do?

No changes from yesterday.

Short Term:
Short term bulls, who entered the market, should maintain their positions.
There are no short-term positions to the downside.

Intermediate & Long Term:
Their are no intermediate or long term opportunities to the upside.
Long-term positions to the upside should be maintained.

There are no intermediate or long term opportunities to the downside

Market Trends:

Intra-day: Neutral
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, experienced intra-day failures to both the upside and downside. It closed, on increased volume, in the lower half of a wider price spread, in a neutral condition relative to the Technometer. The intra-day failure suggests the presence of both demand and supply.\

A review of the intra-day waves confirms the above, although supply did have the upper hand.

After a gap opening to the downside the Wyckoff Wave continued to react to point Z. There, demand came into the market and the Wyckoff Wave rallied briefly to point A.

Once again, supply returned and the Wyckoff Wave reacted for the next two hours and five minutes to point B.

Demand returned and the Wyckoff Wave rallied for the next two hours and fifteen minutes to point C.

Although this was the most significant rally of the day, but the Wyckoff Wave was unable to reach the highs at either points Y or W.

Supply returned and the Wyckoff Wave reacted for the last hour and a half of the trading day.

These intra-day rallies and reactions were definitive and a genuine effort was made to move the Wyckoff Wave both up and down.

The intra-day O-P Index is in a positive divergence with the Wyckoff Wave when compared with point X.

Most significantly, the presence of supply and the lower tops at points Y and C, coupled with the lower bottoms at points X and D suggests the Wyckoff Wave will continue to move to the downside.

The Optimism – Pessimism Index reacted. It remains in a positive inharmonious action, with the Wyckoff Wave, when compared with point D. It is also important to note that the O-P Index is relatively stronger than the Wyckoff Wave.

The Force Index reacted slightly, but continues to produce moderately negative readings.

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

Today, the Wyckoff Wave attempted twice to rally. Unfortunately for the bulls, if continued to run into supply and was unable to make any progress.

While this must sound like a broken record, nothing in today’s market action suggests the Wyckoff Wave will do anything else but rally back and test the lows at points M and D.

While the Wyckoff indicators do not provide any helpful clues to justify the expected short-term reaction, the overall lack of demand continues to make the Wyckoff Wave vulnerable to supply coming into the market.

The lower tops, over the past two days, suggests the beginning of a minor “rolling over”. This often precedes a reaction. Throughout the move from point M, the Wyckoff Wave has consistently tried to rally and has consistently failed.

The expected reaction should dry up the supply and prepare the Wyckoff Wave for a more significant move to the upside.