New Opportunities To the Downside

Tuesday, July 6, 2016

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What To Do?

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

Aggressive short-term bears should consider new opportunities to the downside..

Intermediate & Long Term:
Their are no intermediate or long term opportunities to the upside.

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

Market Trends:

Intra-day: Up, but weakened and in an oversold position
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

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

A review of the intra-day waves confirms the above. After a wide gap opening to the downside, supply remained and the Wyckoff Wave reacted to point T. It then spent the rest of the day rallying back to its strong close.

After the low at point T, little demand came into the market and the Wyckoff Wave rallied. The rally was primarily due to a lack of pressure, in the form of supply.

The morning reaction, which lasted 55 min., drove the Wyckoff Wave into a significantly oversold position relative to its intra-day up trend channel. While the rally moved the Wave back towards the trend channel, the lack of demand suggests the trend channel will be broken and the Wyckoff Wave will react.

If this happens, point M was the successful test of the high at point X. This also suggests the reaction will test the lows at points G and E.

The Optimism – Pessimism Index reacted and remains in its upward trend channel. The negative divergence with the Wyckoff Wave, when compared with point V, continues.

The Force Index rallied and is producing positive readings.

Tomorrow, the Technometer will open in a neutral condition.

Today’s intra-day failure to the downside, resulted in a poor quality rally that appears to have confirmed that Friday’s market action resulted in a successful test of the high at point C.

This gives the Wyckoff Wave an opportunity to react off the top of the trading range.