Demand Is Still Weak

What To Do?

Same as yesterday.

Short Term:
Short term bulls, who entered the market, should maintain their positions.
There are no short-term positions to the downside.

Intermediate & Long Term:
Their are no intermediate or long term opportunities to the upside.
Long-term positions to the upside should be maintained.

There are no intermediate or long term opportunities to the downside

Market Trends:

Intra-day: First changed to Up and then to Neutral
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on slightly decreased volume. It closed in the upper half of a narrower price spread, in a slightly oversold condition relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves confirms the above. While the Wyckoff Wave did rally for much of the trading day, it was on relatively narrowing price spread and decreasing volume.

After a gap opening to the upside, the Wyckoff Wave rallied for most of the trading day to point V. There, it encountered supply and reacted for the last hour of trading.

During the morning hours, a new intra-day up trend channel was drawn and it appears in blue on the intra-day chart.

A corrective reaction to point V, during the intra-day rally, caused the Wyckoff Wave to weaken the new trend channel. While the rally continued to point W, it was unable to return to the trend channel. This inability caused a second trend change to neutral.

The Wyckoff Wave is also testing yesterday’s highs at points T and R. The relatively reduced price spread and volume suggest that point W is also a successful test of yesterday’s highs.

This suggests the Wyckoff Wave will react and at least test the lows at point U.

The Optimism – Pessimism Index rallied slightly. It has returned to short-term harmony with the Wyckoff Wave. The longer-term positive divergence with the Wave when compared with point D remains in place.

The Force Index is producing moderately negative readings.

Tomorrow, the Technometer will open in a slightly oversold condition.

Today, the Wyckoff Wave made another attempt to rally. Once again, the rally suggested a lack of demand. This makes the Wyckoff Wave vulnerable to a slight reaction.

The market action continues to suggest that the Wyckoff Wave needs to dry up more supply before it will be able to rally back to test the highs at point E.

However, the market action also suggests that the expected reaction will continue to a end in the area of point M and the supply line drawn from point D. This scenario is supported by a slightly oversold Technometer and a relatively strong O-P Index.

If the Technometer moves into an oversold condition, it will be important to watch the Force Index readings. While the readings are moderately negative, if the Force Index continues to react there could be a mitigating impact on the oversold Technometer. This could reduce the strength of any rally back towards the top of the trading range. This is not of concern today, but something to pay attention to.

Look for the Wyckoff Wave to react and successfully test the support in the area of points M and P.