More Drying Up Of Supply

Monday, September 26, 2016

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What To Do?

Short Term:
Short term bulls, who entered the market, should maintain their positions. These positions can be added to or new positions can be taken.
There are no short-term positions 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: Changed to Neutral
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on increased volume. It closed in the lower quarter of a slightly narrower price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest the presence of demand.

A review of the intra-day waves indicates today was a lack of supply day. After a gap opening to the downside and a brief 10 min. follow-through, the Wyckoff Wave moved sideways for the rest of the trading day. In fact, the end of the first intra-day wave at 9:40 AM was only 37 points higher than where the Wyckoff Wave closed.

The Wyckoff Wave did attempt to put in intra-day rallies on four different occasions,, but, each time, demand quickly dried up. The subsequent reactions were long and slow and consistent with a drying up of supply.

The Wyckoff Wave is testing the resistance, now support line that forms the top of the first phase of the intra-day trading range. If it is able to maintain its present position, relative to that line, there is a good probability we are seeing a successful intra-day Last Point of Support.

This would give the Wyckoff Wave an opportunity to rally and take out the earlier intra-day high at point X.

The Optimism – Pessimism Index rallied. It continues in a positive inharmonious action with the Wyckoff Wave, when compared with point D.

The Force Index continues to produce moderately negative readings.

Tomorrow, the Technometer will open in a low neutral condition.

Today, the Wyckoff Wave reacted back into the top of the sideways movement that began at point K. Once again, it is easier to see today’s market action on the intra-day line chart.

As today’s market action indicated a drying up of supply, the intra-day Last Point of Support scenario continues to have the highest probability of success.

Tomorrow will be an important day. If the Wave continues to react, it will fall back into the intra-day Creek and move into a position to retest the support line drawn from point D. That would eliminate the intra-day Sign of Strength and S Point of Support scenarios. The Wyckoff Wave can then continue to move sideways.

While that is certainly a possibility, today’s market action, coupled with the positive inharmonious action with the O – P Index, continues to suggest the Wyckoff Wave will put in a successful Last Point of Support and rally back towards the top of the trading range.