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Click Here For Wyckoff Wave Chart 05-05-2016

Short Term:

Their are no short-term opportunities to the upside.

Aggressive short-term bears should maintain their positions. They should also begin to study their selections for appropriate exit points, should the reaction bottom out.

Intermediate & Long Term:

Intermediate and long-term bulls should maintain existing positions.

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

Market Trends:

Intra-day: Down..

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 upside. It closed, on decreased volume, in the lower half of a narrower price spread, in a nearly oversold condition relative to the Technometer. The intra-day failure suggests a lack of demand.

A review of the intra-day waves confirms the above. After a gap opening to the upside, the Wyckoff Wave rallied for 45 min. to point B. Demand, which was not at all strong, dried up and supply came into the market.

That supply drove the Wyckoff Wave down to point C. There, it was withdrawn, and the Wyckoff Wave spent the last hour and 40 min. of the trading day in a poor quality rally.

Once again the Wyckoff Wave was unable to reach the supply line of its intra-day up trend channel. It was also unable to reach its support line on the reaction to point C.

The fact that little demand is coming to the market, continues to suggest the Wyckoff Wave has more room to move to the downside.

The Optimism – Pessimism Index rallied slightly. It remains in harmony with the Wyckoff Wave.

The Force Index reacted and continues to produce moderate positive readings.

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

Today, the Wyckoff Wave continued its reaction off point V. The fact that the reaction was on reduced price spread and volume is an indication the reaction is nearing its bottom.

Today’s lack of demand at the beginning and end of the trading day, with supply still present during the middle of the day, suggests that supply is not quite yet ready to dry up and there is more room to the downside.

The Wyckoff Wave could also rally and test the high at point V. As mentioned yesterday, due to the lack of demand we have seen so far, there is a strong probability the test will be successful. This scenario should be kept in the back of our minds.