Short positions closed…

Supply did not come into the market early in the trading day. Therefore, short positions should have been closed. There are no new opportunities to the downside.

There are no short-term opportunities to the upside.

Intermediate and long-term bulls should maintain existing positions. However, positions that had reached objective areas and those that have under performed, can be liquidated as the Wyckoff Wave reached the top the top of its trading range.

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

Intra-day: Up and in an overbought position relative to the trend

Short Term: Up.

Intermediate Term: Down and in an overbought position, relative to the trend.

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on increased volume. It closed in the upper half of a narrower price spread, in a low neutral 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 gap opening to the upside, demand remained, for the first 45 min. of the trading day, as the Wyckoff Wave rallied to point H.

Demand was withdrawn and light supply returned. The Wyckoff Wave reacted slightly and then moved sideways to point I. There, the Wyckoff Wave attempted to rally, but ran into supply at point J.

There supply returned for the last 30 min. of the trading day. While supply was present, the last intra-day waves price spread was not commensurate with the volume. This would suggest that, despite the relatively wide price spread and high volume, some demand was present.

The Optimism – Pessimism Index reacted and is testing the supply line of its upward trend channel. The short-term negative divergence with point P, when compared with the Wyckoff Wave, has returned. The longer-term negative divergences with the Wave, when compared with points D, B, Z and X remain in place.

The Force Index reacted and continues to produce moderate negative readings.

On Monday, the Technometer will open in a low neutral condition.

Today, the Wyckoff Wave continued to advance towards the top of the trading range. The expected good supply did not materialize and short-term positions to the downside should have been closed.

Still, the Wyckoff Wave is running into overhanging supply coming from the top of the trading range. This is reflected in the short and longer term negative divergences with the O-P Index.

Despite the late day supply, today’s market action gives the Wyckoff Wave an opportunity to test the top of the trading range.

While the reaction from point P scenario did not play out, it is still difficult to see the Wyckoff Wave being able to move through the top of the trading range. The reaction is still expected, just at a higher level.

The relative weakness of the rally from point M it is shown in the inability of the Wyckoff Wave to reach the short-term uptrend channels supply line at point P.

Even though the subsequent reaction was not nearly as deep as expected, it did weaken the short-term uptrend channel. Today, the Wyckoff Wave closed at the channel’s supply line.

The relative strength of the Wyckoff Wave presents an opportunity to intermediate and long-term investors to close positions that have reached objectives or have underperformed.

If the Wyckoff Wave reacts as expected, closing these positions will provide cash to take new positions, to the upside, at the bottom of the expected reaction.