Reaction reaching final stages…

Their are no short-term opportunities to the upside.

Aggressive short-term bears should maintain their existing positions. As it appears the reaction is in its final stages, strategies should be established to exit these positions, when appropriate.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Changed to Down and in an oversold position relative to the trend.

Short Term: Neutral.

Intermediate Term: Neutral

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on slightly increased volume. It closed at the bottom of a wider price spread, in a slightly oversold condition relative to the Technometer. The price spread and volume suggest the presence of supply.

A review of the intra-day waves confirms the above. After a wide gap opening to the downside, supply remained and the Wyckoff Wave reacted to point S. There was a brief rally to point T, but supply was too strong, and the Wyckoff Wave reacted for the rest the trading day.

The last intra-day wave was interesting. It lasted for 55 min., but the Wyckoff Wave only lost 45 points on extremely high volume. This could be a preliminary indication that some demand is coming into the market.

The intra-day trend is changed from neutral to down. Supply was strong enough to drive the Wyckoff Wave into an oversold position relative to the trend.

While the Wyckoff Wave may rally and attempt to return to its new trend channel, today’s supply was strong enough to suggest there is more room to the downside.

The Optimism – Pessimism Index reacted and is approaching the supply line of its upward trend channel. It is in harmony with the Wyckoff Wave.

The Force Index reacted. It continues to produce moderately negative readings. There is no mitigating impact on the slightly oversold Technometer.

On Monday, the Technometer will open in an oversold condition.

While Friday the 13th was a bad day for the market, it was a good day for the short term bears. The Wyckoff Wave confirmed that point X was a successful test of point V and it reacted on good price spread and volume. The Wave is now testing the support line drawn through points R and T.

There appears to be enough supply in the market that will allow the Wyckoff Wave to continue its reaction and test the lows at points U and S.

However, the Technometer has moved into an oversold condition. This would suggest the reaction will not progress deep into the trading range. If the Wyckoff Wave finds support between the resistance line drawn from point T and point U, it will probably attempt to rally and retest the high at point V. This would create a new phase of the trading range and possibly pave the way for ending action, perhaps in the form of a Spring.