Back to watch and wait.

There are no short-term opportunities to the downside.

As demand did not come into the market today, the Sign of Strength was not confirmed. There are no opportunities to the upside.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Neutral.

Short Term: Neutral

Intermediate Term: Down, but in a very slight overbought position.

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on decreased volume. It closed in the middle of a wider price spread, in a high neutral condition relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves confirms the above. After a wide gap opening to the upside and a 15 min. follow-through to point S, supply came into the market and the Wyckoff Wave reacted to point T. It then moved sideways for the rest of the trading day.

After reacting to point T, the Wyckoff Wave attempted to rally and test the earlier high at point S. Demand was withdrawn. The test was successful and some minor supply returned.

Without the gap opening today’s market action would’ve a sideways move.

Today’s lack of demand continues to suggest the Wyckoff Wave can make little additional progress to the upside and should react back through the lows at point P and test points B and Z.

Based on today’s market action, it is doubtful the Wyckoff Wave will be supported at those levels and will continue to react.

The Optimism – Pessimism Index rallied. It remains in a negative divergence with the Wyckoff Wave when compared with points D, B, Z and X. It is in an overbought position relative to its upward trend channel.

The Force Index rallied slightly, but is still producing moderate negative readings.

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

Today, the Wyckoff Wave continued its rally off the support at point M. Once again the quality of the rally was poor. As mentioned above, the entire days gain was found in the gap opening.

Today’s market action does nothing to change Friday’s market letter and Sunday’s blog post. The move off point M continues to appear to be a rally within the larger trading range and not a Sign of Strength that is related to the mini trading.

It is difficult to see how the Wyckoff Wave to continue to move to the upside. It is expected to react and return to the mini trading range. It also may well test the lows at point M.