Resistance At Top Of Trading Range

Friday, December 9, 2016
What To Do?
Short Term
Short-term bears should stay short if you have not been stopped out.  Otherwise identify possible shorts and be prepared to enter shorts again, if we find resistance at top of trading range as expected.
Short-term bulls stand aside.
Intermediate & Long Term:
Intermediate and long term positions to the upside should be maintained.
There are no intermediate or long term opportunities to the downside.
Market Trends:
Intra-day: Up
Short Term: Up
Intermediate Term: Up
Long Term: Neutral
The stock market, as measured by the Wyckoff Wave, opened slightly higher, and then continued that rally for the rest of the day.  Volume was somewhat lower than the previous days, with some selling volume coming in on the last waves of the day.
The Wyckoff Wave closed higher once again on the day, in an overbought condition relative to the Technometer.  The price spread and volume suggest a lack of supply day.
The Nasdaq and S&P 500 was higher once again today as well.
Over the last few days we have been stopped out of short postions with scratches or small losses.  We personally have found this market as trying as we can remember from recent memory.

A review of the intra-day waves confirms the above.  After the slightly higher opening, the Wave spent the rest of the day continuing its slow methodical rally.  Volume was slightly lower today, and showed lack of supply on the rally.
The Intra-day Optimism-Pessimism Index continues to show a slight divergence with the high of the Wyckoff Wave the last two days.  Price has went to a new high both days, while the O-P is sideways.
The Optimism-Pessimism Index closed unchanged as well today.
The Force Index closed lower today again and still showing moderate negative readings.
On Monday, the Technometer will open in an overbought condition.

Today, the Wyckoff Wave traded higher all day.  It was a slow consistent rally on lower volume.  The reaction we have been expecting over the last week has failed to materialize.  Todays rally did not show that large spread and increase in volume we would like to see for a Jump Across The Creek.  It is once again still lacking on the volume.  We feel that the top of the trading range will prove resistance for this rally and the Wyckoff Wave is vulnerable to some type of correction.
This suggests the Wyckoff Wave will react back towards the middle/bottom of the minor trading range.
The reduced probability of a successful Sign of Strength also indicates the Wyckoff Wave will not experience a Last Point of Support on the reaction.  This suggests the Wave is expected to react back to the bottom of the trading range and test the previous support at point “U”, and the more important lows at point “S” in a normal correction.
This weeks action suggest that it will still be difficult for the Wyckoff Wave to move past the resistance at the top of the trading range.   The overbought Technometer still supports this scenario.

Good Trading,
Todd Butterfield