Hold short positions….

Friday, December 2, 2016
What To Do?
Short Term:
Short-term bears should continue to hold all short positions for the continued reaction.
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, opened lower on the day in the first five minues, then volume came in to lift the Wyckoff Wave off the lows of the day.  The Wave tried to get back to unchanged on the day, but failed and then experienced a late afternoon drift on light volume.  Volume was considerably lower today as it drifted the last half of the day.
The Wyckoff Wave closed slightly lower on the day, in a neutral condition relative to the Technometer.  The price spread and volume suggest a lack of supply for the day.
The Nasdaq and S&P 500 were basically unchanged today on light volume as well.

A review of the intra-day waves confirms the above.  After the lower opening, the Wave tried to get back to positive on the day, but failed. Volume dried up considerably the rest of the day as we drifted back to the lows of the day at the close.
The Intra-day Optimism-Pessimism Index is in harmony with the Wyckoff Wave .
The Optimism-Pessimism Index closed slightly higher today.
The Force Index closed slightly higher as well and still showing moderate negative readings.
On Monday, the Technometer will open in a neutral condition.

 
Today, the Wyckoff Wave opened lower, tried to rally, then drifted back to the lows of the day.  It is still  trying to begin a more important correction to the most recent poor quality advance from point “U” to “V”.  The lack of demand, over the last two weeks, diminishes the Sign of Strength within the trading range scenario.  Today’s action continues to make the Wyckoff Wave vulnerable to further correction.
This suggests the Wyckoff Wave will react back towards the bottom of the trading range.
The reduced probability of a successful Sign of Strength also indicates the Wyckoff Wave will not experience a Last Point of Support on the reaction.  This suggests the Wave is expected to react back to the bottom of the trading range and test the low at point “S” in a normal correction.
The negative divergence with the O-P Index and the neutral Technometer still supports this scenario.  This weeks action suggest that it will be difficult for the Wyckoff Wave to move past the resistance at the top of the trading range.

Good Trading,
Todd Butterfield