Wyckoff Wave Taking A Breather At The Highs

Friday, February 24, 2017
What To Do?
Short Term
Short-term bears should stand aside or stay short stocks with relative weakness.   We are continuing to hold some shorts as there is many stocks showing relative weakness.
Short-term bulls should 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 Friday unchanged then rallied the rest of the day and closed higher.  Volume has been slow this past week.  The price spread and volume still show slight demand present.
The Technometer is at an overbought level of 51.   This should continue to stall the rally, or provide some selling pressure to the downside.
The Nasdaq and S&P 500 were both up fractionally Friday as well.
 



A review of the intra-day waves shows the Wave opening unchanged and then a slow rally to the close.  The O-P continues to trend higher and leading the rally to the upside.  This keeps the bull trend alive.
The Force Index closed unchanged today as well and is posting a positive reading of 120.  This is allowing the Wave to continue to push higher.
On Monday, the Technometer will open once again in an overbought reading.
 

 
The rally of the last two weeks has surprised us, but volume has not increased dramatically nor price spread.  The divergence between the O-P and Wave has been eliminated, but there would still be inharmonious action in place.  With the overbought Technometer reading in place, we still want to see how the Wyckoff Wave trades in the coming days.  So far it has been a sideways affair which is encouraging for the bulls.
 

 
Bonds had a strong day to the upside Friday, and we think have further to go to the upside.  Our Wyckoff indicators got us long at the blue circle, and we do not want to see the recent low at 118.65 violated for the bull case to stay alive.
 

 
Good Trading,
Todd Butterfield