Aggressive bears consider new positions

Click Here For Wyckoff Wave Chart 06-09-2016

Short Term:

Their are no short-term opportunities to the upside. Despite the inability of the Wyckoff Wave to begin the expected reaction, this would be a very dangerous place to take new positions to the upside.

Aggressive short-term bears can consider new opportunities to the downside.

Intermediate & Long Term:

Intermediate and long-term bulls should maintain existing positions. However, this is a good place to close trades that have reached objectives and eliminate any underperforming positions. Cash should be held in preparation for ending action and a move to the upside.

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

Market Trends:

Intra-day: Changed to Neutral

Short Term: Neutral

Intermediate Term: Neutral

Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on slightly increased, but relatively low volume. It closed in the upper half of a narrower price spread, in a clearly overbought 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 downside, supply continued and the Wyckoff Wave reacted to point A. After a brief one intra-day wave rally to point B, the Wave reacted to point C on a lack of supply. This lack of supply stopped the reaction that began at point Z.

The Wyckoff Wave rallied for the rest of the trading day. However, while demand was present, it was not particularly strong. In addition, the last two intra-day up waves, the lasted 55 and 35 min. respectively. The high volume and moderately narrow price spread found in these waves, suggests supply was coming back into the market.

The poor quality rally off point A suggests the Wyckoff Wave will be unable to return to its intra-day up trend channel. This changes the intra-day trend from up to neutral.

It also suggests the Wyckoff Wave will continue to react.

The Optimism – Pessimism Index moved sideways. It remains in an extremely overbought position relative to its upward trend channel. The negative inharmonious action with the Wyckoff Wave, when compared with point V, continues.

The Force Index reacted and continues to produce moderate positive readings. There is a mitigating impact on the clearly overbought Technometer.

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

Today, the Wyckoff Wave began to react back towards the trading range. However, supply was not definitive, particularly strong and certainly not sustained.

More importantly, after supply dried up on the intra-day morning reaction, good demand did not come into the market and allow the Wyckoff Wave to rally.

The Wyckoff tools (O-P Index, Force Index and Technometer) continue to indicate the Wyckoff Wave will react.

This could be the time to take new short-term positions to the downside. However, if tomorrow brings a wide gap opening to the upside or strong demand, new positions should not be taken.

Finally, close attention should be paid to the Force Index. It remains relatively strong and continue to suggest that any reaction will not be particularly long or sustained.