A Look Back “Poised To React” (Wednesday September 7th)

Todd Butterfield Blog 0 Comments

This is a report that was delivered to our Charting Members on Wednesday September 7th, 2016 before the major losses on September 8th & 9th.

Wednesday, September 7, 2016

Click here to open the attached charts
What To Do?

Short Term:
There are no short-term opportunities to the upside.

Short-term bears who hold positions to the downside should maintain them. In addition, new short positions can be considered.

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: Changed to 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 narrower price spread, in an overbought condition relative to the Technometer. The price spread and volume suggest a lack of supply.

A review of the intra-day waves indicates that today was a lack of demand day.

After a small gap opening to the upside, the Wyckoff Wave rallied to point R. The relatively low price spread and volume suggested a drying up of demand.

Supply returned and the Wyckoff Wave reacted to point S. The reaction lasted two hours and 20 min. and was on reasonable price spread and volume.

On the reaction to point S, once again, the Wyckoff Wave weakened the intra-day up trend channel. Because point S is lower than point Q, this indicates a breaking of the uptrend channel and changes the intra-day trend from up to neutral.

The Wyckoff Wave spent the last two hours and 35 min. of the trading day in a very poor quality rally. Supply returned during the last hour.

There is an intra-day negative divergence with the O-P Index when the Wyckoff Wave is compared to point R

All this suggests the Wyckoff Wave is in a position to react and, at least, test the lows at point F on the intra-day line chart.

The Optimism – Pessimism Index rallied. It continues in its negative divergence with the Wyckoff Wave when compared with point E. The O-P Index is testing the supply line of its upward trend channel.

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

Today, the Wyckoff Wave attempted to rally. Demand was withdrawn and, late in the trading day, some supply returned. This lack of demand makes the Wyckoff Wave extremely vulnerable to react on Thursday.

This scenario is supported by an overbought Technometer and a significant negative divergence with point P on the vertical line charts.

Since the reaction to point G, while the Wyckoff Wave has moved basically sideways, it has put in a series of lower highs and lower lows. This is a result of the inability of any strong demand to come into the market and be sustained over a few trading days.

The Wyckoff Wave looks extremely weak and beginning tomorrow, it should react back into the trading range and at least test the lows at point D.

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