Breakout to new highs

Monday, February 20, 2017
What To Do?
Short Term
Short-term bears should stand aside or stay short stocks with relative weakness.   We are continuing to hold some shorts as there is many stocks showing relative weakness.
Short-term bulls should stand aside.
Intermediate & Long Term:
Intermediate and long term positions to the upside should be maintained.
There are no intermediate or long term opportunities to the downside.
Market Trends:
Intra-day: Up
Short Term: Up
Intermediate Term: Up
Long Term: Neutral
The stock market, as measured by the Wyckoff Wave opened slightly higher, had a minor correction, then rallied to a the high of the day at the close.  Volume was as same as Thursday, but below the levels of recent days.  The price spread and volume show demand still present.
The Technometer has now reached an extreme overbought level of 55.85.   This should provide some slowing of the rally, but so far the market has preceded to continued slightly higher the last two days.
The Nasdaq and S&P 500 were both up slightly Friday.
 


A review of the intra-day waves shows the Wave opening slightly higher, and then closing higher on the day.  The O-P continues to trend higher and leading the rally to the upside as it has for the past two week.  The Wyckoff Wave has now taken out the highs at “Z”, and replaced the divergence with the O-P, with inharmonious action.
The Force Index closed higher again today and is posting a positive reading of 122.  This is allowing the Wave to continue to push higher.
On Tuesday, the Technometer will open in an extreme overbought reading, and could possibly slow the rally.
 

 
The rally of last week has surprised us, but volume has not increased dramatically nor price spread.  The divergence between the O-P and Wave has been eliminated, but there would still be inharmonious action in place.  With the extreme overbought Technometer reading in place, we still want to see how the Wyckoff Wave trades in this week.  We would like to see a few days of correction to see how our Wyckoff indicators react.
Bonds have rallied the last two days and we still expect higher prices.
 

 
Good Trading,
Todd Butterfield