No changes from Friday

Click Here For Wyckoff Wave Chart 05-31-2016

Short Term:

Their are no short-term opportunities to the upside.

Short-term traders should consider new positions to the downside. If positions have already been taken, they should be maintained.

Intermediate & Long Term:

Intermediate and long-term bulls should maintain existing positions. However, this is a good place to close trades that have reached objectives and eliminate any underperforming positions. Cash should be held in preparation for ending action and a move to the upside.

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

Market Trends:

Intra-day: Neutral..

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

Intermediate Term: Neutral

Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, experienced an intra-day failure to the upside. It closed, on increased volume, in the lower half of a wider price spread, in an overbought condition relative to the Technometer. The intra-day failure suggests the presence of supply.

A review of the intra-day waves confirms the above. After a small gap opening to the upside and a 5 min. reaction, demand came into the market and the Wyckoff Wave rallied to point L.

There demand was withdrawn and the Wyckoff Wave reacted, on moderate supply, to point M.

Demand returned during the last hour of the trading day. The intra-day wave off point M lasted 55 min. It had relatively low volume for a 55 min. intra-day wave. This would suggest strong demand was not coming into the market.

During the trading day, the Wyckoff Wave made one, possibly final, attempt to return to its intra-day up trend channel. It failed. The reaction to point M was lower than point K. The inability of demand to be sustained and the lower low at point M, strongly suggests the intra-day up trend has ended and the Wyckoff Wave will react.

The Optimism – Pessimism Index reacted. It remains in an overbought position relative to its upward trend channel. The negative divergences with points X and V, when compared to the Wyckoff Wave, remain in place.

The Force Index reacted, but is still producing low positive readings. There is a mitigating impact on the overbought Technometer.

Tomorrow, the Technometer will open in an overbought condition.

Today, the Wyckoff Wave appears to have successfully tested point X and is ready to react back towards its short-term down trend channel.

This scenario continues to be supported by the overbought Technometer and the negative divergences with the O – the Index.

As mentioned last week, the relatively strong Force Index will probably shorten the reaction, but the Wyckoff Wave should return to its trend channel.

Notice a new resistance line has been drawn on the vertical line chart. The line extends the top of the trading range to point V. The horizontal line from point T is temporary. This is a reasonable support point and it will be helpful to watch how the Wyckoff Wave behaves as it reaches that support area.