Market is sending mixed signals

No change from yesterday. The watch and wait continues. The market is sending mixed signals as if works its way through the trading range.

There are no short-term opportunities in either direction. The Wyckoff Wave is in the middle of a significant trading range. Any new positions, at this juncture, would have a relatively high risk/reward ratio.

Intermediate and long-term bulls should maintain existing positions.

There are no intermediate or long term opportunities to the downside.

Intra-day: Changed to Up

Short Term: Up.

Intermediate Term: Down and in an overbought position relative to the trend.

Long Term:  Neutral

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

A review of the intra-day waves confirms the above. After a gap opening to the downside and a minor follow-through, supply was withdrawn as the Wyckoff Wave reached point L. After a brief rally to point M, the Wyckoff Wave reacted to point N. Point N was an intra-day test of point L and the test was successful.

This allowed the Wyckoff Wave to rally for the rest of the trading day.

The Wyckoff Wave’s continued rally has required me to do something I rarely do, move the intra-day up trend channel. However, the continued up move required the adjustment. This changes the intra-day trend back to up.

The week intra-day rally is continuing. So far the Wyckoff Wave is but unable to reach the supply line of the new intra-day up trend channel. Unless strong demand comes in to the market tomorrow, it will be difficult for the Wyckoff Wave to continue this advance.

The Optimism – Pessimism Index rallied slightly. It remains in a negative divergence with the Wyckoff Wave when compared with points D, B, Z and X.

The Force Index also rallied slightly and is producing moderate negative readings.

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

Today, the Wyckoff Wave continued its poor quality rally off point O. It made little progress in attempting to test the supply line of the short-term uptrend channel. It is also just below an important resistance level form by points E, C, Y and W.

There are other negative indications. If the rally continues the Wyckoff Wave’s Technometer will move into an overbought condition.

There is a negative divergence with the Force Index, at points N and L, when compared with the Wyckoff Wave.

The O – P Index while in short-term harmony with the Wave is at the same level as point N, but the Wyckoff Wave is higher. This is a very short-term indication that the effort necessary to move the Wyckoff Wave higher is being withdrawn.

Sometime, during the next few days, the Wyckoff Wave will test the resistance and the support line. It is expected the test will be successful and the Wyckoff Wave will react.

It will be important to note if the reaction is able to weaken the short-term uptrend channel. There is a very good chance this will happen, as well.