The Dullness Continues, But The Reaction Scenario Stays The Same

Friday, November 18, 2016

What To Do?

No changes from yesterday

Short Term:

Short-term bulls should continue to maintain their positions. The expected minor reaction would create a difficult risk/reward ratio for any new positions to the downside. Short-term short positions are not recommended.

There are no short-term positions to the downside.

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, traded very slightly higher on decreased volume. It closed in the middle of a narrower price spread, in a low neutral condition relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves confirm the above. After a small gap opening to the downside and a brief 10 minutes follow-through, some demand returned and the Wyckoff Wave rallied for the next 25 minutes. Then supply returned and the Wyckoff Wave reacted to point P. This all took place within the first hour of the trading day.

As it has, during the past few days, the Wyckoff Wave began a long slow rally that lasted for four hours and 45 minutes. The rally was on relatively narrow price spread and low volume. Once again, this suggested a lack of demand.

Some supply returned during the last 45 min. of the trading day. However the days hallmark was a lack of demand.

The intra-day Optimism – Pessimism Index is in harmony with the Wyckoff Wave.

Today’s a lack of demand rally lasted longer and therefore made slightly more progress than the previous lack of demand moves to the upside. The Wyckoff Wave also encountered supply as it tested Wednesdays high at point L.

This relative weakness continues to suggest the Wyckoff Wave will react during the coming week.

The Optimism – Pessimism Index rallied. It is in a very short-term negative divergence with the Wyckoff Wave when compared with point T. The longer-term negative divergences with points and, J and H remain in place.

The Force Index rallied and is producing moderately negative readings. The readings on today’s vertical line chart are not correct.

Tomorrow, the Technometer will open in a low neutral condition.

Today, the Wyckoff Wave continued to roll over after reaching the high at point T. While this sounds like a broken record, the continued market weakness strongly suggests the Wyckoff Wave will react and test the resistance now support levels at points R and P.

For most of the week, the Wyckoff Wave has first reacted and then put in a poor quality rally. Each time it is putting in a lower high for the day. This is another sign that it will be extremely difficult for the Wyckoff Wave to advance past the highs at point T and will react during the coming week.