Continue to take new short positions

Their are no short-term opportunities to the upside.

Today’s market action continues to indicate that  this is a good place to take 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: Neutral

Short Term: Neutral.

Intermediate Term: Down and in an overbought position, relative to the trend.

Long Term:  Neutral

.The stock market, as measured by the Wyckoff Wave, experienced and intra-day failure to the downside. It closed, on increased volume, near the top of a wider price spread, in a very overbought position relative to the Technometer. The price spread and volume suggest the presence of demand.

A review of the intra-day waves confirms the above. After a wide gap opening to the downside and a brief follow-through to point G, the Wyckoff Wave rallied for the rest of the trading day. However, demand was not noticeably strong or increasing as the day progressed.

After demand returned at point G, the Wyckoff Wave made little progress to the upside until noon. Then there was one reasonable intra-day up wave to point H.

Demand was withdrawn at point H and the Wyckoff Wave briefly reacted. Demand returned and the Wyckoff Wave rallied to point I. There, it reached the support line of the intra-day up trend channel.  Notice the reduction in the price spread of the positive intra-day waves after the high at point H.

The Wyckoff Wave’s lack of relative strength as it approached the trend line suggests it will have a difficult time continuing to rally. It is expected to react and test the lows at point M and below.

The Optimism – Pessimism Index rallied and remained in its overbought position relative to its upward trend channel. It also remains in a short-term negative divergence with the Wyckoff Wave when compared with point R. The longer-term negative divergences with points D, B, Z and X remain in place.

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

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

Today, the Wyckoff Wave rallied and is testing last week’s high at point R. Its very overbought Technometer and negative divergences with the O-P Index continue to suggest the test will be successful.

While today’s wider price spread and increased volume does indicate the presence of demand, the intra-day review indicates the amount of demand present in the market should not be sufficient to rally the Wyckoff Wave through the resistance and into new high ground.

Yesterday’s prediction continues to have the highest probability of success. It suggests the Wyckoff Wave will react back into the trading range and provide short-term opportunities to the downside.