No Intra-day Spring

Friday, July 29, 2016

Click here to open the attached charts

What To Do?

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

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

The stock market, as measured by the Wyckoff Wave, traded unchanged on decreased volume. It closed in the upper half of a narrower price spread, in a neutral condition relative to the Technometer. Because the Wyckoff Wave was unchanged, we must rely on the intra-day analysis to determine the degree of demand or supply.

A review of the intra-day waves indicates that while there was some morning supply, today was primarily a lack of demand day.

After a gap opening to the downside, supply remained and the Wyckoff Wave to point H. Then, supply was withdrawn and the Wyckoff Wave rallied for the rest of the trading day. Some supply did return during the last 15 min.

The rally’s first hour and 25 minutes was on reasonable, but reducing, price spread and volume. After reaching point G, demand was withdrawn and the Wyckoff Wave moved sideways for the rest of the trading day.

While the reaction to point H penetrated the trading range’s support line, not enough demand came into the market’s to justify calling the move Spring. This still gives the Wave an opportunity to react on Monday and test the lows at point H.

The Optimism – Pessimism Index reacted and is at the supply line of its upward trend channel. It continues in a short-term negative divergence with the Wyckoff Wave when compared with point E.

The Force Index reacted, but is still producing positive numbers.

On Monday, the Technometer will open in a high neutral condition.

Today, the Wyckoff Wave tried to continue its reaction to the downside, but supply was withdrawn. As mentioned above the rally was of relatively poor quality. Today’s market action makes the Wyckoff Wave vulnerable continue its reaction and not only test the resistance, now support line at the top of the trading range, but even the lows at point D.

While the Technometer is no longer in an overbought condition, it will not become quickly oversold. This coupled with the O P Index’s is negative divergence with the Wyckoff Wave, are all indications that the Wyckoff Wave will react back into its almost year-old trading range.

This has been a long and rather boring sideways move. It is important to be patient and maintain good market discipline. Often boring can result in a nice move to the upside.