If the rally off Monday’s low is of poor quality, there could be new opportunities to the downside.

Click Here For Wyckoff Wave Charts 06-28-2016

Short Term:

Their are no short-term opportunities to the upside. While the Wyckoff Wave may rally, there is no indication that strong demand is coming into the market.

There are no short-term opportunities to the downside. However, if the rally off Monday’s low is of poor quality, there could be new opportunities to the downside.

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: Neutral

Short Term: Neutral

Intermediate Term: Neutral

Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on decreased volume. It closed in the upper half of a narrower price spread, in a low neutral condition relative to the Technometer. The price spread and volume suggest a lack of demand.

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

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

Tomorrow, the Technometer will open in a low neutral condition.

A review of the intra-day waves suggests that today featured a lack of supply, with some demand coming into the market

After a nice gap opening to the upside demand drove the Wyckoff Wave to point E. There it was withdrawn and the Wyckoff Wave reacted to point F. The reaction was on relatively reduced price spread and volume and suggested a lack of supply.

Demand returned and the Wyckoff Wave rallied sharply to point G. It reacted to point H. Again, the reaction was on relatively reduced price spread and volume, which suggested a lack of supply. Then, the Wyckoff Wave rallied on good demand to a strong close.

Today’s lack of supply suggests the Wyckoff Wave has successfully tested the low at point D and is prepared to rally. It is also had two consecutive higher lows (points F and H) and three consecutive higher highs (point E, G and the day’s close).

This would indicate the Wyckoff Wave will continue to rally and, at least, test the high at point B.

Today, the Wyckoff Wave appears to have confirmed yesterday’s low. Today’s lack of supply suggests the Wyckoff Wave will begin a rally back towards the top of the trading range. The quality of the rally will be extremely important. If the rally is on a lack of demand, the Wyckoff Wave is vulnerable to react father back into the trading range.

If the rally is on good price spread and volume and is able to test the high at point C, it would be a more bullish situation.

Presently, the Force Index’s strong negative readings suggest the rally will not be particularly strong or sustained. As the rally continues it will be important to watch the Technometer to see if it moves into an overbought condition. If it does, especially in the early stages of any rally, it would be a rather negative indicator. This would read through especially when the overbought Technometer is combined with the strong negative Force Index readings.

This would identify the area from points A and C as a distribution trading range. That would make the reaction from point C a Sign of Weakness and an unsuccessful rally a S Point of Support. If that happens and it is only one possible scenario, the Wyckoff Wave would have the potential to react and test the lows at points G and M.

If the Wyckoff Wave rallied strongly back towards the top of the trading range, we probably have simply identified another support area and the Wyckoff Wave will continue its sideways move.

These are two possibilities. As the expected rally develops, it will provide additional clues.