Consider closing short positions

Their are no short-term opportunities to the upside.

Aggressive short-term bears should consider closing their positions as there appears to be little room left 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: Down.

Short Term: Neutral.

Intermediate Term: Neutral

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on increased volume. It closed near the bottom of a wider price spread, in a clearly oversold condition relative to the Technometer. The price spread and volume suggest the presence of supply.

A review of the intra-day waves confirms the above. After a gap opening to the downside, the Wyckoff Wave followed through to point W and then attempted to rally. The rally lasted for one intra-day up wave and ended at point X.

Then supply came into the market and the Wyckoff Wave reacted until the last 25 min. of the trading day. There the Wave met some demand, but made little progress to the upside.

The poor quality rally to point X and the fact that it held below yesterdays high at point V, opened the door for supply to commander the market. Supply did return and the Wyckoff Wave reacted back into the intra-day down trend channel.

As the supply has not shown any indication of drying up, it is expected the reaction will continue and the Wyckoff Wave will test and probably react through the low at point U.

The Optimism – Pessimism Index moved sideways. It remains in a slightly overbought position relative to its upward trend channel. The O – P Index is in harmony with the Wyckoff Wave.

The Force Index rallied, but is still producing moderate negative readings. There is no mitigating impact on the clearly oversold Technometer.

Tomorrow, the Technometer will open in a slightly oversold condition.

Today, more supply came into the market and the Wyckoff Wave reacted. Once again, it is in a position to test the resistance, now support at points X, Z, B, D, R and T.

Today supply probably eliminates a rally to replace point X as a secondary test of the high at point V. It also increases the probability that the Wyckoff Wave could continue to react and test the lows at points U and S.

This scenario is somewhat countered by the oversold Technometer, which suggests the Wave may be supported about where it is now.

This is probably much to do about not much, as the possible support levels are so close together. The important factor is that the Wyckoff Wave should put in support around the 39,000 level and begin a new phase of the trading range that began in August.