Is The Expected Reaction Beginning?

Wednesday, November 16, 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 lower on decreased volume. It closed in the lower half of a narrower price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest a lack of supply.

A review of the intra-day waves indicates that the morning featured a lack of supply. The afternoon intra-day rally was on a lack of demand.

After a gap opening to the downside, supply remained and the Wyckoff Wave reacted to point J. However, while supply was fairly strong during the first half hour of trading, it began to dry up as the Wyckoff Wave continued its reaction to point J.

At point J supply dried up and the Wyckoff Wave put in a long, slow rally to point L. The rally was on a lack of demand.

Supply returned at point L and the Wyckoff Wave reacted for the rest of the trading day.

Today’s market action suggests that while supply is still present, it is not particularly strong. In addition demand continues to be withdrawn. As mentioned previously, this helps confirms the scenario that the Wyckoff Wave will react and test the lows at point W.

The Optimism – Pessimism Index reacted. The Optimism – Pessimism Index rallied slightly. It continues in a negative divergence with the Wyckoff Wave when compared with points N, J and H.

The Force Index reacted slightly and continues to produce moderately negative readings.

Tomorrow, the Technometer will open in a neutral condition.

Today, it appears the Wyckoff Wave has begun its reaction off the high at point T. There is not much change from yesterday, so yesterdays observations continue to apply.

The Technometer has moved into a neutral condition. It will be important to watch the reaction to see if the Technometer becomes oversold. If it becomes more oversold than it was at point S and if the Wyckoff Wave holds above point S, this would be a very bullish indication.

Look for the Wyckoff Wave to continue to rally and test the area around points R and P.