Dull at the top of the range…

This past week the Wyckoff Wave was fractionally higher for the week.  Early in the week the Wyckoff Wave tried to break through the resistance at the top of the range and failed.  Then it tried to break through the most recent support at the 44,950 level and held once again.  Friday saw the Wave close out on a positive note for the week.  For the week, price and volume showed we had slight supply present.

The Technometer is near oversold levels at Friday’s close.

The S&P  and Nasdaq was both fractionally higher for the week.

The Wave began the week with a rally on Monday and Wednesday on holiday volume.  Then it traded down on Thursday on somewhat higher volume.  Friday saw a test of the recent lows at the top of the range and closed higher for the day.  The Wave is still holding near the top of the range which is encouraging, and the Technometer is still registering an oversold condition.  This tells us the Wave is continuing to be vulnerable to a rally here.

The O-P spent the week continuing in its downtrend and made a new low on Thursday before rallying on Friday.

The Force Index closed the week at -341, which is still considerable downside pressure.  This pressure is what kept the Wyckoff Wave from rallying the last two weeks, even in face of an oversold condition on the Technometer.  It is trying to turn up so we must watch closely.

We still have a few shorts on and expected more of a pullback here.   We are probably looking to cover our shorts here and stand aside.

We continue to hold a few longs as well and still monitoring stocks outperforming to the upside.

 
The Wyckoff Wave Growth Index (WWG) chart continued making new lows up until Friday’s rally.  Us being concerned about the weakness here kept us on the sidelines for the last two weeks with the Wyckoff Wave.   The Force Index has been in a strong downtrend and the Technometer is trading neutral already.  We also  just bounced off of the longer term trend line as we mentioned last week could happen.  Volume was not strong on Fridays rally so we want to still stand aside here.
 

 
The bond market continued to experience losses last week.  We have quickly returned to the recent uptrend support line, and the action does not look positive.  The O-P and Force traded higher last week but prices continue to fall.  And you can see the Technometer is very overbought still.  We still would like to see a short term rally this week to establish short positions.
 

 
Good Trading,

Todd Butterfield