Correction trying to get started…

Tuesday, November 29, 2016
What To Do?
Short Term:
Short-term bears should continue to identify candidates to the downside.  Previous short positions should be held for the expected reaction.
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, traded slightly lower on slightly lower volume as well.   Everything to the right of the blue line is today’s market action.  The Wyckoff Wave closed down slightly, in a high neutral condition relative to the Technometer.  The price spread and volume suggest a lack of supply.

A review of the intra-day waves confirms the above.  After an unchanged opening, supply came in to drive the Wave to its low of the day in the first 30 minutes of trading.  Then we tried to rally on low volume for the next four hours.  The Wave then began to rollover once again, and in the last hour we had some minor selling come in to close us down slightly on the day.
The Intra-day Optimism-Pessimism Index is in relative harmony with the Wyckoff Wave.
The Optimism-Pessimism Index closed slightly higher today.
The Force Index also closed slightly higher and is producing moderate negative readings.
On Wednesday, the Technometer will open in a high neutral condition.

 
Today, the Wyckoff Wave traded sideways and is still  trying to correct the most recent poor quality advance from point “U” to “V”.  The lack of demand, over the last 8-9 trading days, diminishes the Sign of Strength within the trading range scenario.  Today’s action continues to make the Wyckoff Wave vulnerable to further correction.
This suggests the Wyckoff Wave will react back towards the bottom of the trading range.
The reduced probability of a successful Sign of Strength also indicates the Wyckoff Wave will not experience a Lack 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 low at point “S” in a normal correction.
The negative divergence with the O-P Index and the overbought Technometer still supports this scenario.  The last two days 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