No changes from Friday

Short term bears who took positions to the downside should maintain them. Today’s poor market action offers another opportunity for new or additional positions to the downside.

There are no short-term opportunities to the upside.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Neutral

Short Term: Up, but slightly weakened.

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

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on decreased volume. It closed in the middle of a wider price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves confirms the above. After a gap opening to the downside, supply came into the market and the Wyckoff Wave reacted to point E. Then it put in a poor quality rally for the rest of the trading day.

Some supply did return during the last 10 min., but the focus of the days market action was a lack of demand.

So far, today’s poor quality rally appears to be a successful test of Friday’s high at point D. This is significant because, for the second time, the Wyckoff Wave has been unable to reenter the intra-day up trend channel.

While this is sounding like a broken record, despite the five days of moving sideways, it continues to appear that the Wyckoff Wave will react and test the lows at points B and H.

The Optimism – Pessimism Index moved sideways.  It is in a very short-term negative divergence with the Wyckoff Wave when compared with point P.  It remains in an overbought position relative to its upward trend channel. The negative divergence with the Wyckoff Wave when compared with points D, B, Z and X remains in place.

The Force Index rallied and is producing low negative readings.

Tomorrow, the Technometer will open in a very slightly overbought condition.

Today, the Wyckoff Wave moved sideways in unimpressive trading. It also slightly weakened the support line of its short-term uptrend channel.

Today’s lack of demand continues to support the short-term reaction scenario. It is expected the Wyckoff Wave will react this week. It will be helpful for the bears, if the Wyckoff Wave can take out last Thursday’s low. This would confirm the beginning of the reaction.

If the reaction proceeds is expected, it will be important to watch both the Force Index and the Wyckoff Wave’s price spread and volume.

The Force Index is producing low negative readings and is moving towards positive territory. While it continues to present negative divergences with the Wyckoff Wave, a strong Force Index could have a mitigating impact on the expected short-term reaction.

If the market reacts, it will be important to watch the price spread and volume. Reduced price spread and volume will indicate that good overhanging supply is not coming into the market. This could also reduce the length and strength of the expected reaction.

These are items to pay attention to. However, this still present a good opportunity to take short term positions to the downside.