Ready To Rumble?

Tuesday, July 26, 2016

Click here to open the attached charts

What To Do?

Short Term:
There are no short-term opportunities to the upside.
Short-term positions to the downside should be maintained.

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: Neutral
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, experienced intra-day failures to both the upside and the downside. It closed, on slightly increased volume, in the middle of a wider price spread, in a neutral condition relative to the Technometer. The intra-day failure suggests the presence of demand.

A review of the intra-day waves indicates that despite both failures, today was a lack of demand day.

After a small gap opening to the upside, the Wyckoff Wave quickly rallied to point Y. There it encountered supply and reacted, on good price spread and volume to point Z.

The rally off point Z to point A was on a lack of demand. While some supply was present on the reaction to point B, it dried up, as price spread and volume decreased.

During the last hour and 20 min. of the trading day the Wyckoff Wave rallied and is presently testing earlier highs at points Y and W. As the Wyckoff Wave approach point Y, as expected, some supply did come into the market.

Today’s market action suggests the support line drawn from point G through point Q is the bottom of the intra-day trading range. Each time the Wyckoff Wave has rallied back towards the line it has encountered supply.

As today’s rally back to the bottom of the trading range was on a lack of demand there is a good possibility the Wyckoff Wave will react back towards the low at point V.

The Optimism – Pessimism Index rallied and continues at the supply line of its upward trend channel. It is in a short-term negative divergence with the Wyckoff Wave, when compared with point E.

The Force Index rallied and is producing positive readings.

Tomorrow, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave tried to go up, tried to go down and closed in the middle on increased volume. When this event occurs, it usually suggests a noticeable move is in the near future. After a long wait, the Wyckoff Wave could be preparing for a more definitive move.

In this case it appears that the move will be to the downside. The O – P Index ‘s short-term negative divergence with the Wyckoff Wave suggests the effort put into moving the Wave to the upside is not being matched by results.

In addition, demand has not been particularly strong and, as mentioned above, the Wyckoff Wave has encountered supply as it attempts to reenter the intra-day trading range.

The only concern is that whenever supply has come into the market, it has not been sustained. However, that concern is overshadowed by the overall lack of demand and the inability of the Wyckoff Wave to continue the reaction off point D.