Ready To Rally

Friday, September 23, 2016

Click here to open the attached charts

My apologies for misstating the intra-day Last Point of Support as a Last Point of Supply in yesterday’s first mailing. In the interest of full disclosure, I must admit that was not the first time that has happened.

What To Do?

Short Term:
Short term bulls, who entered the market, should maintain their positions. These positions can be added to or new positions can be taken.
There are no short-term positions 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: Changed to Up
Short Term: Changed to Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on decreased volume. It closed near the bottom of a slightly narrower price spread, in a nearly oversold condition relative to the Technometer.

A review of the intra-day waves confirms the above. After a very small gap opening to the upside the Wyckoff Wave put in a poor quality, 30 min., rally to point Z. Then it reacted on relatively reduced price spread and volume for the rest of the trading day.

The Wyckoff Wave is in an intra-day positive divergence with its Optimism – Pessimism Index, when today’s market close is compared with points W and U on the intra-day chart.

The Wyckoff Wave appears to be putting in a classic reaction to an intra-day Last Point of Support. It is holding well above the resistance, now support, line drawn from point M on the intra-day chart. This gives the Wyckoff Wave an excellent opportunity to complete the Last Point of Support and then rally.

The Optimism – Pessimism Index rallied. It remains in a positive inharmonious action with the Wyckoff Wave when compared with point D.

The Force Index is producing moderately negative numbers, but beginning to advance.

On Monday, the Technometer will open in a nearly oversold condition.

Today, the Wyckoff Wave reacted back towards the support line drawn from point D. Presently, it is holding above the top of the sideways move that began at point K. This is shown as a reaction towards a potential Last Point of Support on the intra-day line chart.

As the Technometer has retreated back towards a nearly oversold condition. It will become oversold if the Wyckoff Wave continues to react. This would make it difficult for the Wyckoff Wave to react through the support line drawn from point D.

The successful test scenario is also supported by the Wyckoff Wave’s positive divergence with its Optimism – Pessimism Index.

The successful test or intra-day Last Point of Support scenario has the highest probability of success and the Wyckoff Wave should rally next week.