Still Sideways at Top of Range….

Wednesday, December 21, 2016
What To Do?
Short Term
Short-term bears should stay short and use stops at recent highs.  New short positions could be taken at these levels if volume expands on the downside.
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: Neutral
Short Term: Up
Intermediate Term: Up
Long Term: Neutral
The stock market, as measured by the Wyckoff Wave, opened slighlty lower in the opening minutes, then rallied back to another slight new high for the move, before beginning a correction that lasted the rest of the day.  Volume was slightly lower today then yesterday.
The Wyckoff Wave closed slightly lower on the day with volume at the continued low levels of recent days.  The price spread and volume showed lack of supply today.
The Technometer is nearing an overbought with a reading of 48.
The Nasdaq and S&P 500 was both slightly lower as well today.


A review of the intra-day waves confirms the above.  After opening slightly lower on the day, the Wave made a new high for the move, before correcting into the close.   Volume was at the same low levels as Monday-Tuesday.
The Wave today continued higher from the apex again today, but then experienced an upthrust on the day.  Volume did not expand much during the day, but down volume did come in to the downside on the last 10 minutes of the day.  If volume continues tomorrow on the downside, we will have had a short-term upthrust on the daily chart.
The Intra-day Optimism-Pessimism Index was sideways for the majority of the day, until the selling came into the close as the Wave made new lows for the day.
The Optimism-Pessimism Index closed slightly lower.
The Force Index closed slightly sharply lower today.
On Thursday, the Technometer will open in a low overbought condition.

Today, the Wyckoff Wave traded slightly lower on a decrease in volume.  The reaction we have been expecting over the last few weeks has not materialized, but todays action could be the start of at least a minor pullback.  The recent rally to “X” has not had a dramatic increase in spread or volume, and does not appear we had a Jump Across The Creek, but more so a test of the upper end of the trading range. Todays rally still did not change these observations.
This suggests the Wyckoff Wave will react back into the 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 into the trading range and test the previous support at point “W”, “U”, and the more important lows at point “S” in a normal correction.

Good Trading,
Todd Butterfield