Breakout to new highs

Wednesday, February 15, 2017
What To Do?
Short Term
Short-term bears should stand aside or stay short stocks with relative weakness.  We have been stopped out of a few shorts on the last two days rally in the Wyckoff Wave for our ProTraders.  We are also 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 relatively unchanged, and then marched higher the rest of the day once again. Volume was slightly higher during the last two days of rally.  The price spread and volume show demand still present.
The Technometer has now reached an extreme overbought level of 54.   This should provide some slowing of the rally, but so far the market has preceded to continue higher.
The Nasdaq and S&P 500 were both up .5% again today.
 


A review of the intra-day waves shows the Wave opening unchanged, and then rallying the rest of 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 today as well and posting a positive reading of 74.  This is allowing the Wave to continue to push higher.
On Thursday, the Technometer will open in an extreme overbought reading, and could possibly slow the rally.
 

 
The last three days of rally has surprised us to say the least.  Volume has increase to a minor extent, as well as 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 the immediate days ahead.  We would like to see a few days of correction to see how our Wyckoff indicators react.
Bonds have been much weaker than we expected as well.  We are currently still long.
 

 
Good Trading,
Todd Butterfield