Continue to hold short positions….

Tuesday, December 6, 2016
What To Do?
Short Term
Short-term bears should hold all short positions for the continued reaction.
Short-term bulls 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: Neutral
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral
The stock market, as measured by the Wyckoff Wave, opened slightly lower in the opening minutes,  then spent the rest of the day rallying on low volume.
The Wyckoff Wave closed higher on the day, in a neutral condition relative to the Technometer.  The price spread and volume suggest a lack of demand for the day.
The Nasdaq and S&P 500 were slightly higher once again.

A review of the intra-day waves confirms the above.  After the slightly lower opening, the Wave spent the rest of the day rallying to the days highs.  Volume was much lower than the previous weeks, and showed lack of demand on the rally.
The Intra-day Optimism-Pessimism Index was in a minor intra-day divergence with the Wyckoff Wave as the Wave opened lower, and the O-P held above yesterdays late lows.  This minor intra-day divergence helped the Wave and OP move in lockstep higher till the close.
The Optimism-Pessimism Index closed slightly higher today.
The Force Index closed higher as well and still showing moderate negative readings.
On Wednesday, the Technometer will open in a neutral condition once again.

Today, the Wyckoff Wave opened lower, then a slow consistent rally the rest of the trading day.  It is still  trying to begin a more important correction to the most recent poor quality advance from point “U” to “V”.  The lack of demand, over the last two weeks, diminishes the Sign of Strength within the trading range scenario.  Today’s action looks a little more friendly on the daily chart as we sprung the previous two days lows and closed higher.  But their was no increase in volume, so it continues to make the Wyckoff Wave vulnerable to further correction.
This suggests the Wyckoff Wave will continue to react back towards the bottom of the minor trading range.
The reduced probability of a successful Sign of Strength also indicates the Wyckoff Wave will not experience a Last Point of Support on the reaction.  This suggests the Wave is expected to react back to the bottom of the trading range and test the previous support at point “U”, and the more important lows at point “S” in a normal correction.
The negative divergence with the O-P Index and the neutral Technometer still supports this scenario.  This weeks action suggest that it will be difficult for the Wyckoff Wave to move past the resistance at the top of the trading range.

Good Trading,
Todd Butterfield