Downtrend In Place

Wednesday, April 5, 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: Sideways
Short Term: Down
Intermediate Term: Up
Long Term: Neutral
The stock market, as measured by the Wyckoff Wave opened sharply higher, and stayed firm into the noon hour.  After which waves of selling came in and drove the wave to a lower close.  Today is a key reversal on the charts and establishes a downtrend that we show in the red dash lines on the daily chart. Volume was slightly higher today, but nothing dramatic.  After the early rally, supply came in to the downside.
The O-P and Force are in downtrends.
The Technometer is registering a neutral reading.
The Nasdaq and S&P 500 were both down .25-.50% today.
 


A review of the intra-day waves shows the Wave opening sharply higher, and then reversing to sharply lower. We feel that we are in the midst of a correction, and today’s action confirms those thoughts.
The O-P closed lower today and in harmony with the selloff.  The Wave rallied to three new highs since March 22nd (on the above chart), and you can see that on each one of these successive highs, the O-P failed to confirm.  It appears there is no major interest in the upside, and we can continue to correct from here.
The Force Index closed lower today as well after a strong rally yesterday.  The Force should continue to apply downside pull on the Wyckoff Wave and favors more downside price action.  The Force closed at -212 today.
On Thursday, the Technometer will open in a neutral reading.
 

 
We look for continued correction in the days ahead.  Today’s high should contain any further rallies, and we feel this correction will take out the lows at “M”, and test the lows at “G” and “E”.  The O-P and Force continue in downtrends, and favors more downside.  The Technometer is neutral and allows more downside in the days ahead as well.
 

 
Bonds traded higher today after being lower early in the day, and we are on the sidelines.
Good Trading,
Todd Butterfield