Bears maintain positions

Their are no short-term opportunities to the upside.

Aggressive short-term bears should maintain their existing positions. If the test of point V a successful, new positions can be considered to the downside

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Changed to Up.

Short Term: Neutral.

Intermediate Term: Neutral

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on slightly increased volume. It closed at the top of a very slightly wider price spread, in a clearly overbought condition relative to the Technometer. The price spread and volume suggest the presence of some demand.

A review of the intra-day waves confirms the above. However, while demand was certainly present, it did not dominate today’s market action.

After a fairly wide gap opening to the upside, the Wyckoff Wave continued to rally for the entire trading day. Of the 11 intra-day waves, 4 exhibited the characteristics of demand. The 3 significant intra-day up waves are marked as J, K and L.

While each of these intra-day waves were on reasonable price spread and volume, the last two lasted longer than would be normally expected, relative to their progress to the upside. After the gap opening, the follow-through to point J lasted for 20 min. The intra-day wave ending at point X lasted for 55 min. The last intra-day wave of the day, which ended at point L lasted 1 hour and 40 min.

This suggests that demand was not particularly strong and, especially in the case of the last intra-day wave, some supply was coming into the market. This would suggest today’s performance was not of particularly good quality. The Wyckoff Wave ended the day slightly above point R. Overhanging supply would be expected in the area between points R and O.

Regardless, the Wyckoff Wave rallied through point F and put in a new high. That changed the intra-day trend from neutral to up. The Wave is also in an overbought position relative to its new up trend channel.

Despite the intra-day trend change, today’s market action continues to suggest the Wyckoff Wave will have a difficult time rallying and should react and test the lows at points G and possibly C..

The Optimism – Pessimism Index rallied and remains in an overbought position relative to its upward trend channel. It is now in a short-term negative divergence with the Wyckoff Wave, when compared with point V.

The Force Index rallied slightly, but continues to produce moderately negative readings. There is no mitigating impact on the clearly overbought Technometer.

Tomorrow, the Technometer will open in an extremely overbought condition.

Today, the Wyckoff Wave continued its effort to test the high at point V. As evidenced by the relatively narrow price spread and low volume above, today’s rally was not of particularly good quality.

In addition, the Technometer has moved into a clearly overbought condition, which is not mitigated by the Force Index. This, plus the short-term negative divergence with the O – P Index, continues to suggest any test of point V will be successful and the Wyckoff Wave will react.

This expected reaction could end at point W or continue back into the trading range and find support in the area of points U and S.