A Dull Day, With No Changes

Thursday, October 6, 2016

What To Do?

No changes from 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: Neutral
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

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

A review of the intra-day waves confirms the above. After a gap opening to the downside the Wyckoff Wave reacted for the next 15 minutes to point X. There, it encountered demand and rallied to point Y.

Then, the Wyckoff Wave reacted for 3 1/2 hours, on relatively reduced price spread and to point Z.

The Wyckoff Wave made a final attempt to rally, during the last 35 min. of the trading day. The rally made little progress and the relatively high volume suggested supply was returning.

More importantly, throughout the afternoon reaction, the Wyckoff Wave made two attempts to rally. Both these attempts were on poor quality, as demand was quickly withdrawn, and the intra-day reaction continued.

On the rally to point Y, the Wyckoff Wave encountered resistance in the same area as points W, R and P. This continues to suggest there is enough overhanging supply to keep the Wyckoff Wave from a significant move to the upside. Despite today’s lack of supply does not appear supply has totally dried up.

This continues to suggest the Wyckoff Wave will react and test the lows at point U.

The Optimism – Pessimism Index reacted slightly and remains in short-term harmony with the Wyckoff Wave. A longer-term positive inharmonious action, when compared with point D, is still in place.

The Force Index moved sideways and is still producing moderately negative readings.

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

Today, although early supply did come into the market, the Wyckoff Wave attempted to rally. Once again the attempt failed. This continues to make the Wyckoff Wave vulnerable to react and test the lows at points M and D.

The Wyckoff Wave is in the same position it was yesterday. The readings from the Wyckoff tools have not changed. The most important of these is the nearly oversold Technometer. This suggests that when the reaction does happen, it will be relatively mild as the Wyckoff Wave will quickly move into an oversold condition. This supports the testing the support scenario described above.

The lack of interest in moving the market upward should eventually give way to supply, which should dry up relatively quickly. Then the Wyckoff Wave would have an opportunity to rally back towards the highs at point E.