An Intra-day Spring

Wednesday, October 26, 2016

What To Do?

No changes from yesterday

Short Term:
Short-term bulls should continue to maintain their positions. There are also new short-term opportunities 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: Changed from Neutral to Up
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, experienced an intra-day failure to the downside. It closed, on decreased volume, in the upper half of a wider price spread, in a low neutral condition relative to the Technometer. The intra-day failure suggests a lack of supply.

A review of the intra-day waves indicates today was driven by demand. After a gap opening to the downside, supply remained and the Wyckoff Wave reacted to point A.

There it encountered demand and rallied strongly to point B. The subsequent reaction to point C suggested a lack of supply. Demand returned and the Wyckoff Wave rallied to point D, which was its high for the day.

On the reaction to point A, the Wyckoff Wave was unable to return to its intra-day down trend channel. This confirmed the intra-day down trend was broken. The higher highs at points B and D and higher lows at points A and C suggest a change in trend to up.

Today’s reaction to point A appears to be an intra-day Spring. Good demand came into the market on the rally to point D and supply dried up on the reaction to point C. This suggests a successful Intra-day Secondary Test and gives the Wyckoff Wave an opportunity to continue to rally.

A resistance line marking the top of the intra-day trading range has been drawn in green. The Wyckoff Wave tested that resistance line on the rally to point D and encountered some supply. The reaction off point D is testing the new intra-day up trend channel support line.

Tomorrow, today’s demand needs to be sustained. Continuing demand will allow the Wyckoff Wave to put in an intra-day Creek Jump (Sign of Strength) and begin to put in a nice rally.

Tomorrow is a critical day. If today’s demand is not sustained, the Wyckoff Wave could react through the trend channels support line and test the earlier lows at points C and even A.

If the demand is sustained and the Sign of Strength is confirmed, this gives the Wyckoff Wave the impetus to put in a significant rally.

The Optimism – Pessimism Index reacted slightly. It is now in a positive inharmonious action with the Wyckoff Wave when compared with point D.

The Force Index advanced slightly, but continues to produce moderate negative readings.

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

Today, once again the Wyckoff Wave attempted to react, but this time encountered better demand.

Today’s market action is best described on the intra-day commentary as the Wyckoff Wave experienced the intra-day Spring described above. Today’s demand gives the Wyckoff Wave chance to rally and move past the earlier highs at points P and, more importantly N.

The intra-day Sign of Strength scenario has a good probability of success.