Pay attention to shorts

While they can relax a bit, short-term bears who took positions to the downside should continue to pay attention if strong demand comes into the market.  Unless there is a strong gap opening to the downside tomorrow morning, new and additional positions to the downside can be considered

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: Up, but noticeably weakened and in an oversold position, relative to the trend

Short Term: Up.

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

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 a high neutral 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 brief follow-through to point Y, supply returned and the Wyckoff Wave reacted.

The reaction to point Z was on good price spread and volume. The Wyckoff Wave then rallied to point A, but did so on a lack of demand. Supply returned and the Wyckoff Wave reacted to point B. While supply was certainly present, it was not as strong as on the reaction to point Z.

The Wyckoff Wave then spent the rest of the day in a poor quality rally. After the first intra-day wave, demand was being withdrawn.

Some supply did return during the last 30 min. of the trading day.

The Wyckoff Wave noticeably weakened the intra-day up trend channel. The poor quality rally off point B appears to be an attempt to return to that channel. Unless stronger demand comes into the market tomorrow, which is doubtful, the Wyckoff Wave will react and break the channel to the downside. This will change the intra-day trend to down.

The Optimism – Pessimism Index moved sideways. It remains in a slightly overbought position relative to its upward trend channel. The negative divergences with the Wyckoff Wave when compared with points D, B, Z and X remain in place.

The Force Index reacted and continues to produce moderate negative readings.

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

Today, the Wyckoff Wave reacted and briefly weakened the short term uptrend channel. The wave closed right at the channel’s support line. This relative weakness is a further indication that the up trend channel is in jeopardy.

It is also important to note that on the rally to point P, the Wyckoff Wave was unable to reach the channel’s supply line. This is another example of relative weakness.

This continue to suggest that the Wyckoff Wave will react, weaken and ultimately break the short-term trend.

The Technometer will open tomorrow in a slightly overbought condition which should make any attempt to the upside relatively weak and short-lived.

The Wyckoff Wave was unable to move through the resistance formed by the sideways movement beginning at point V. It appears to be unable to do so until the existing supply dries up, allowing demand to return to the market.