Again, no changes from Tuesday

Click Here For Wyckoff Wave Chart 04-20-2016

Short Term:

Their are no short-term opportunities to the upside.

There are no short-term opportunities to the downside.

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: 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 an overbought position relative to the Technometer. The price spread and volume suggest the presence of supply.

A review of the intra-day waves indicates that today was a lack of demand day, with supply coming into the market during the last hour.

After a small gap opening to the downside, the Wyckoff Wave reacted to point X. It was also testing yesterday’s intra-day low at point W. The reaction was on relatively narrow price spread and volume, which suggested a lack of supply.

This provided an excellent opportunity for demand to come into the market. Although it did appear, it was not sustained. The rally failed as all it could do was successfully test yesterday’s high at point V.

As the Wave rallied to point Y, supply began to appear, as evidenced by the reduced price spread and higher volume on the intra-day wave before point Y.

The supply was reasonably strong as the Wyckoff Wave reacted for the rest of the trading day.

On the rally off point X, the Wyckoff Wave was unable to reach the intra-day up trend channel’s supply line. Today’s late supply suggests the Wyckoff Wave can continue to react and weaken the intra-day up trend channels support line.

The Optimism – Pessimism Index reacted, but still remains in an overbought position relative to its upward trend channel. The negative inharmonious action with the Wyckoff Wave when compared with points D, B, Z and X remains in place.

The Force Index reacted slightly and is producing low negative readings. There is still a mitigating impact on the overbought Technometer.

Tomorrow, the Technometer will open in an overbought condition.

Today, the Wyckoff Wave continued to advance, but the total gain was miniscule.

Today’s lack of demand, coupled with good late supply makes the Wyckoff Wave rather vulnerable to begin the long-awaited reaction.

There are no significant changes from yesterday, except the Technometer moved from extremely overbought to simply overbought. If the Wyckoff Wave reacts tomorrow, it will most probably return to a neutral condition.

As mentioned ad nauseum, it is extremely difficult for any index or stock to move through the top of the trading range without strong demand. The relatively narrow price spread and relatively low volume is not commensurate with a continued move to the upside.

The Wyckoff Wave has probably put in a new top in the trading range and will react back into the trading range.

A reasonable scenario would have the reaction stops in the upper portion of the range. The Wyckoff Wave could then rally to test he’s highs, before reacting deeper into the trading range. This would be in line with the Force Index’s mitigating impact, that suggests any reaction will not be deep or sustained.

Again, while long-term investors should continue to hold their positions, this is not a time for short-term traders to enter the market to the downside.

Charts of the Wyckoff Wave are attached.