Correction In Progress
Monday, March 27, 2017
What To Do?
Short Term
Short-term bears should stay short stocks with relative weakness. We are continuing to hold shorts looking for lower prices.
Short-term bulls should stand aside. You can begin preparing a list of stocks showing out-performance to the upside for possible purchase.
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: Down
Short Term: Down
Intermediate Term: Up
Long Term: Neutral
The stock market, as measured by the Wyckoff Wave opened sharply lower, and then reversed the decline to close unchanged. Volume was lackluster and gave no real clues.
The Technometer is nearing an oversold/neutral reading.
The Nasdaq and S&P 500 were both basically unchanged today as well.
A review of the intra-day waves shows the Wave gaping sharply lower at the opening, then rally back to unchanged on the day. On the charts it appears we had a spring, but be careful with springs in downtrends. Today’s rally back from the spring level, did not have volume expand on the rally, and could not get it back to closing nicely higher on the day.
The O-P continues to trade heavy as we had been mentioning on these daily updates.
The Force Index closed unchanged as well, and continues to apply downside pull on the Wyckoff Wave as well. A reading of -281 will continue to favor more downside price action.
On Tuesday, the Technometer will open near an oversold/neutral reading.
Today’s early decline took the Wave to a new low for this correction. We then experienced a rally off of the low, but it currently appears to be more short covering, then strong buying. The O-P and Force are giving no new clues, and continues to favor more downside. The Technometer is back to oversold/neutral and could allow more downside in the days ahead as well.
Bonds traded higher once again today, and we are on the sidelines.
Good Trading,
Todd Butterfield
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