Sharp selloff to the bottom of the recent range…

Wednesday, May 17, 2017
What To Do?
Short Term
Short-term bears should stay short stocks with relative weakness.
Short-term bulls should stand aside but have your buy list ready for purchase.
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: Down
Short Term: Neutral
Intermediate Term: Up
Long Term: Neutral
The stock market, as measured by the Wyckoff Wave opened sharply lower, and selling continued for the rest of they session.  Volume was much higher on today’s selloff.  Supply is present.
The O-P finally broke its shelf of support from the last four weeks.   The Force also broke sharply to the downside and is now at -308.
The Technometer is registering an oversold reading of 37.96.
The S&P 500 was down 1.82% today with the Nasdaq down 2.547%.  The VIX was up a huge 46% today to 15.59.
 


A review of the intra-day waves shows the Wave opening sharply lower and supply coming in all day to drive it to its low for the day at the close.
The O-P continues with its weak performance with today’s sharp selloff.
The Force Index closed sharply lower today.
On Thursday, the Technometer will open in an oversold reading.
 

 
Today the Wyckoff Wave had a sharp selloff to the bottom of its recent trading range.  The Technometer is oversold so it could allow us to “Spring” the support level.  Tomorrows action should be watched closely.  Because of the week performance of the O-P over the last few weeks/months we are inclined to believe there is still more downside ahead.  But the oversold Technometer tells us we are vulnerable to a rally here so the Spring scenario is definitely on the table.
 

 
Bonds had a big day up today because of the risk-off environment.  We are on the sidelines but believe this market will be topping out on a short term basis soon.
Good Trading,
Todd Butterfield