Short term bears maintain positions

Click Here For Wyckoff Wave Chart 01-08-2016

Short Term:
Short term bears should maintain their positions.

There are no new short-term 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, but slightly weakened and in a very slightly oversold position.
Short Term: Changed to Neutral
Intermediate Term: Down., but in a slightly oversold position.
Long Term: Neutral.

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

A review of the intra-day waves indicates that today was more of a supply day. However, like yesterday, little demand was present.

After a gap opening to the upside and a brief, five-minute, follow-through, the Wyckoff Wave reacted for the rest of the trading day.

Because there was minimal move to the upside after the gap opening, today cannot be considered an intra-day failure to the upside.

The intra-day down trend channel has been adjusted to reflect the reaction to point H and the poor quality rally to point M. This better reflects the intra-day market action.

The Wyckoff Wave continued its reaction on moderate supply. It closed in a slightly oversold position relative to its trend channel. There is nothing in today’s market action that suggests any kind of a significant turnaround. Therefore, we can continue to expect the Wyckoff Wave to react.

The Optimism – Pessimism Index reacted. It is approaching the supply line of its upward trend channel and is only in a slightly overbought position, relative to that channel.

The capital O – P Index is in a short-term negative divergence with the Wyckoff Wave when compared with points C and A.

The Force Index reacted and is producing moderate negative readings.

On Monday, the Technometer will open in a slightly oversold condition.

Today the Wyckoff Wave continued its decline off the high at point T. It has moved through the support line of the intermediate-term downtrend channel.

It is now in a position where it can put in a good support point in the developing trading range. The reaction is significant enough to change the short-term trend from up to neutral.

The Technometer is moving towards an oversold condition. The negative Force Index readings should not have any kind of a mitigating impact on the Technometer.

The O – P Index is producing short-term positive divergences. However, a further decline could eliminate them.

Most importantly is the relatively high volume that has been experienced over the last five trading days. This suggests supply was still present. The review of the intra-day waves, over the last two days, has shown that little demand is present.

It will be important to see a reduction in both price spread and volume before the Wyckoff Wave can put in that important support point. Until that happens, the Wyckoff Wave should continue to react.

Charts of the Wyckoff Wave are attached.