Short term bears begin to consider closing positions

Click Here For Wyckoff Wave Chart 01-12-2016

Short Term:
Short term bears should consider closing their positions. This is specially true if good demand comes into the market tomorrow.

If demand comes into the market tomorrow short-term bulls can look for new opportunities to the upside.

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

The stock market, as measured by the Wyckoff Wave, experienced and intra-day failure to the downside. It closed, on decreased volume in the upper half of a slightly wider price spread, in a slightly oversold condition relative to the Technometer. The intra-day failure suggests a lack of demand.

A review of the intra-day waves indicates today featured a lack of supply. After a gap opening to the upside and a brief 15 min. follow-through to point W, supply came into the market and the Wyckoff Wave reacted to point W. As the Wave reacted supply began to dry up and the Wyckoff Wave was unable to reach the support line of the intra-day down trend channel.

Then, the Wyckoff Wave rallied off point W and put in a strong close. The rally was primarily on a lack of supply. Little demand was present until the last 25 min. of the trading day. This would suggest there was an opportunity for supply to commander the market and, so far it has not.

Like yesterday, the Wyckoff Wave is in a position to test the supply line of the intra-day down trend channel. The fact that it was unable to reach the support line increases the probability that it will rally through and weaken the intra-day up trend channel.

The Optimism – Pessimism Index rallied slightly. It remains in a short-term positive divergence with the Wyckoff Wave when compared with points C, A and Y. The longer-term negative divergences remain in place.

The Force Index reacted and is still producing moderately negative readings. There is a slight mitigating impact on the oversold Technometer.

Tomorrow the Technometer will open in an oversold condition.

Today, the Wyckoff Wave tested yesterday’s low and rallied. This would suggest the Wave has found a new support point in the developing trading range.

If that is confirmed, this would give the Wyckoff Wave the opportunity to rally back and test the highs at points D and B.

The oversold Technometer and the positive O – P Index divergences with the Wyckoff Wave suggest this scenario has a good probability of success.

While the Force Index is producing moderate negative readings, they should not have much of an impact on the ability of the Wyckoff Wave to rally in the trading range.

Charts of the Wyckoff Wave are attached.