An Intra-day Trading Range

Tuesday, July 19, 2016

Click here to open the attached chart

What To Do?

No Changes – Watch and Wait

Short Term:
There are no short-term opportunities to the upside.
There are no short-term opportunities to the downside.
Intermediate & Long Term:
Their are no intermediate or long term opportunities to the upside.
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 middle of a very slightly wider 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 indicates today was a supply day, but supply did begin to dry up during the afternoon hours. After a gap opening to the downside at point M, the Wyckoff Wave rallied to point N. While the rally began on good price spread and volume, demand dried up as the Wyckoff Wave reached point N.

Supply returned and the Wyckoff Wave reacted to point O. Then, as supply began to dry up, the Wyckoff Wave moved sideways for the rest of the trading day.

The Wyckoff Wave has entered a trading range that began with a Buying Climax at point D. There was an automatic reaction to point E and a secondary test at point F. The Wyckoff Wave is now moving sideways as we wait for ending action.

The relatively wide price spreads on the reactions, compared to the rallies, suggest this trading range has more characteristics of distribution, then accumulation.

The Optimism – Pessimism Index rallied slightly. It continues to test the supply line of its upward trend channel. It remains in harmony with the Wyckoff Wave.

The Force Index rallied and is producing positive readings.

Tomorrow, the Technometer will open in a neutral condition.

Today the Wyckoff Wave continued its sideways move as it “rolls over” after reaching last Thursday’s high. The inability of demand to come into the market continues to suggest the Wyckoff Wave is vulnerable to react and is expected to return to test the top of the trading range (line drawn from point C) and quite possibly point D.

It will be helpful to watch the intra-day trading range to see if the Wyckoff Wave experiences any ending action.