An Opportunity To Test Last Weeks High

Monday, July 5, 2016

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What To Do?

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

There are no short-term opportunities to the downside. If the Wyckoff Wave rallies, close attention should be paid to the Technometer readings.

Intermediate & Long Term:
Their are no intermediate or long term opportunities to the upside.

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

Market Trends:

Intra-day: Up, but weakened and in a very slightly oversold position
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on decreased volume. It closed in the lower half 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 indicates that, despite the reduced volume, today was more of a supply driven day.

After a small gap opening to the upside, the Wyckoff Wave reacted on a combination of supply and a lack of demand. The Wyckoff Wave returned to its intra-day up trend channel and tested the channel’s support line at point R. The attempted rally off point R was on a lack of demand. This made the Wyckoff Wave vulnerable to returning supply.

That’s what happened and the Wyckoff Wave reacted, on good supply, for the last 20 min. of the trading day.

The rally to point S, was unable to drive the Wyckoff Wave back into its intra-day up trend channel. So far, there is only been a minor weakening of that channel.

Because supply, while present, was not dominant, the Wyckoff Wave has an opportunity to rally and test the highs at point M.

The Optimism – Pessimism Index reacted and has returned to its upward trend channel. It remains in a negative divergence with the Wyckoff Wave, when compared with point V. It has returned to harmony with the Wave when compared to point A and C.

The Force Index reacted and is now producing moderate negative readings. The Force Index software was tweaked over the weekend and earlier Force Index readings have been adjusted.

Tomorrow, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave is testing last week’s high at point C. While supply was present, it was not strong enough to indicate the test was completed.

If the Wyckoff Wave does attempt to rally tomorrow, there is a very small probability it will move past the highs at points A and C, into new high ground.

The O – P Index continues to send negative signals. The corrected Force Index readings are also somewhat negative.

Most importantly the Wyckoff Wave is testing the top of the trading range and we are not seeing strong demand coming into the market. This gives the Wave a good opportunity to react and retest the lows at points D and Z.