Still A Lack Of Demand

Tuesday, August 23, 2016

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What To Do?

Short Term:
There are no short-term opportunities to the upside.
Aggressive short-term bears should maintain their positions. They should be closed if strong demand returns.

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: Down, but in an overbought position
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded slightly higher on increased volume. It closed in the lower half of a wider price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest the presence of demand.

A review of the intra-day waves indicates today was a lack of demand day.

After a fairly wide gap opening to the upside, the Wyckoff Wave rallied, for the next 15 min., to point L. Then, the Wave spent the next 3 hours and 5 min. on a slow reaction back to point M. The reaction was on reduced price spread and low volume. This portion of the day featured a lack of supply.

Once again, the withdrawal of supply gave demand an opportunity to come into the market. Instead, the Wyckoff Wave put in a long, slow rally to point N. The rally successfully tested the earlier high at point L.

Supply returned and the Wyckoff Wave reacted for the rest of the trading day.

Today’s gap opening to the upside placed the Wyckoff Wave in an overbought position relative to its upward trend channel. The fact that it could only put in a poor quality rally, that ended below point L, continues to suggest the Wyckoff Wave will react back into the intra-day trading range and test the range’s supply line.

The Optimism – Pessimism Index rallied. It remains in the upper portion of its upward trend channel. It continues to be in harmony with the Wyckoff Wave.

Tomorrow, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave made another attempt to leave the sideways movement, that began at point G, to the upside. The day’s two attempts to rally were on the gap opening and the long slow afternoon rally that was on a lack of demand.

The Wyckoff Wave continues to move laterally in the sideways movement. At some point there will be some sort of ending action and the Wyckoff Wave is expected to rally.

Again, the relatively moderate price spread and volume and length of the sideways movement suggests this is a bit of accumulation rather than distribution. The Wyckoff Wave is still expected to rally and test the area around point F.