Consider new positions to the downside

Their are no short-term opportunities to the upside.

Today’s rally increases the potential room to the downside. While today was not a good day to take short positions, tomorrow could well be a different story. Short-term bears should consider new positions 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: Down and in an overbought position relative to the trend

Intermediate Term: Neutral

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on increased volume. It closed in the upper half of a wider price spread, in an overbought condition relative to the Technometer. The price spread and volume suggest the presence of demand.

A review of the intra-day waves confirms the above. That confirmation is based on the strong first intra-day wave which ended at point H. The wave’s wide price spread and high volume indicates the presence of strong demand. That intra-day wave followed a modest gap opening to the upside.

After reaching point H the Wyckoff Wave reacted for the rest of the trading day. Some supply was present and became slightly stronger as the day progressed. The slight reaction off point H was not indicative of a drying up of supply.

The intra-day trend is changed to up. So far, the Wyckoff Wave has remained in that trend.

The Wyckoff Wave has moved through the intra-day support points and is testing the top of the rally that formed the intra-day down trend channel. Today’s lack of follow-through to the upside, coupled with the presence of some supply, suggests the Wyckoff Wave will have a difficult time continuing its rally. It is expected to react and weaken its new intra-day up trend channel

The Optimism – Pessimism Index rallied and remains in an overbought position relative to its upward trend channel. The negative divergence with the Wyckoff Wave when compared with point V continues.

The Force Index rallied and is producing moderate negative readings. So far, there is no mitigating impact on the overbought Technometer.

Tomorrow, the Technometer will open in a clearly overbought condition.

Today the Wyckoff Wave continued its rally off last week’s low at point Z. The rally has been marked by relatively narrow price spread. The volume has increased as the rally progressed. However, the relatively narrow price spread suggests supply is lurking.

The Wyckoff Wave is presently testing the high at point X. The overbought Technometer and the negative divergence with the O – P Index continues to suggest the Wyckoff Wave will have a difficult time making progress to the upside.