No Changes From Yesterday

Thursday, August 4, 2016
What To Do?

Click here to open the attached charts

Short Term:
There are no short-term opportunities to the upside.
Aggressive short-term bears who took positions should maintain them. In addition new positions can also be considered. These should be closely watched as the expected reaction may not be particularly long or deep.

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: Down
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded slightly higher on decreased volume. It closed in the middle of a slightly narrower price spread, in an oversold 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 an extremely small gap opening to the upside the Wyckoff Wave put in a 10 min. rally to point S. There it encountered supply and reacted to point T.

The Wyckoff Wave spent the next two hours in a poor quality rally to point U. Then it moved sideways for the rest of the trading day.

The intra-day Optimism – Pessimism Index helps confirm today’s lack of demand. Despite the initial spike to point S, the O – P Index was in a negative divergence with the Wyckoff Wave, when compared with point P, for the entire trading day. Very little effort is supporting the poor quality move to the upside.

The Wyckoff Wave is testing the supply line of its intra-day down trend channel. Today’s lack of demand suggests it will be unable to move through that supply line. Instead, look for a reaction back to test the low at point M and the intra-day down trend channel’s support line.

The Optimism – Pessimism Index rallied and remains in harmony with the Wyckoff Wave. It continues to the supply line of its upward trend channel.

The Force Index also reacted and is producing positive readings.

Tomorrow, the Technometer will open in an oversold condition.

Today, the Wyckoff Wave was at best, uninspiring. While it tried to rally, there was little effort behind the attempt and it appears the Wyckoff Wave will be unable to make much, if any additional progress to the upside.

This continues to suggest the Wyckoff Wave will react and move through the resistance, now support line drawn from point C, which forms the top of the original trading range.

Little demand is present. Conversely, even though the Wyckoff Wave is vulnerable, supply has yet to come into the market. However, supply is not drying up. It simply hasn’t been present during the extremely mild reaction from point E.

Today’s market action does nothing to change the reaction back into the trading range scenario.