Intra-day Last Point Of Support: Out Of Jeopardy

Monday, October 31, 2016

What To Do?

Short Term:
Short-term bulls should continue to maintain their positions. In addition, new positions can be considered to the upside.

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: Down
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 low neutral 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 small gap opening to the upside, the Wyckoff Wave put in a brief, 15 minute, rally to point J. Then it reacted, on reduced price spread and volume, for the rest of the trading day.

The intra-day O-P Index is in a positive divergence with the Wyckoff Wave when compared with point A.

Although the Wyckoff Wave remains in its intra-day down trend channel, it has been unable to reach the channels support line since the reaction to point I.

More significantly, on today’s long, slow reaction, the Wyckoff Wave was able to hold above the low at point I. In addition, the price spread and volume on the reaction from point J to today’s close, is noticeably decreased from the reaction from points H to I.

This suggests a significant drying up of supply and there is a high probability the Wyckoff Wave is at, or just above, an intra-day Last Point of Support.

This would suggest the Wyckoff Wave will rally tomorrow and take out the highs at points I and probably H.

The Optimism – Pessimism Index reacted. It continues in a short-term positive divergence with the Wyckoff Wave, when compared with point K.

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

Tomorrow, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave had an opportunity to react through Friday’s low and test the support identified by the green line drawn from point D.

Instead, supply dried up and the Wyckoff Wave reacted on reduced price spread and volume.

Today’s market action suggests that the seemingly, never ending, amount of supply may have been finally taken in.

This gives the Wyckoff Wave an excellent opportunity to begin to rally back towards the top of the trading range.