Another Dull Trading Day

Wednesday, August 17, 2016

Click here to open the attached charts

What To Do?

Short Term:
There are no short-term opportunities to the upside.
Aggressive short-term bears should maintain their positions. Short-term traders need to decide if they want to ride out any rally, or close their positions and reenter the market if the test of point F it is successful.

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: Down
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded one point lower on slightly increased volume. It closed near the bottom of a narrower price spread, in an oversold 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 gap opening to the downside, the Wyckoff Wave continued to react until it reached the day’s low at point E. Then, demand came into the market and the Wyckoff Wave rallied to point E. It then reacted on a lack of supply, but demand returned during the last hour of the trading day.

The intra-day Optimism – Pessimism Index continues in a positive inharmonious action with the Wyckoff Wave, when compared with points X, A and C

Today’s market action confirms that there was no Spring. While some demand came into the market, it was not particularly strong and the Wyckoff Wave made little progress to the upside.

However, the Wyckoff Wave did successfully test the supply line of its intra-day down trend channel and is beginning to rally off that support. This continues to give the Wyckoff Wave the opportunity to rally and at least test the supply line of the intra-day down trend channel. It also has the potential to continue to rally and test the resistance in the area around point U.

The Optimism – Pessimism Index reacted and on an intermediate and long-term basis, remains in harmony with the Wyckoff Wave. The reactions of the last few days have placed at in the upper portion of its upward trend channel.

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

Today, in an extremely dull trading day, the Wyckoff Wave continued to test the support in the area of point G. Although it rallied off that support, the rally was not particularly spectacular or sustained.

The relatively dull market action over the past nine trading days continues to suggest the Wyckoff Wave is getting ready to rally. The primary question is when. The relatively moderate price spread and low volume suggests little supply is present and there is no distribution.

In addition, the oversold Technometer suggests the Wyckoff Wave should be ready to rally.

As there has been no strong demand and we did not see a Spring, it continues to appear this of the more of a testing rally and should conclude in the area of point F.