Correction scenario still in play…

Wednesday, November 30, 2016
What To Do?
Short Term:
Short-term bears should continue to identify candidates to the downside and use stops near todays highs to protect new positions.  All 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, opened higher off of the OPEC agreement news, then traded the better part of the day trying to extend those gains.  But late in the day strong volume came into the downside and the majority of the days gains were erased.  The Wyckoff Wave closed up slightly, in a neutral condition relative to the Technometer.  The price spread and volume suggest supply coming into the market.
The Nasdaq came under considerable pressure today, as well as the S&P 500.

A review of the intra-day waves confirms the above.  After a positive opening, the Wave spent the next three hours trying to extend its gains to new highs on relative low volume.  This could not bring any new buying and then it came off those highs on wider spread and much higher volume.  You can see the strong red bars at the end of the trading session.,
The Intra-day Optimism-Pessimism Index is now leading the Wyckoff Wave lower after todays late selling.
The Optimism-Pessimism Index closed lower today.
The Force Index also closed lower today and is showing moderate negative readings.
On Thursday, the Technometer will open in a neutral condition.

 
Today, the Wyckoff Wave opened higher tried to extend its gains and was met with selling at the close.  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 9-10 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 few 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