Successfully Testing Support

Monday, September 12, 2016

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What To Do?

Short Term:
There are no short-term opportunities to the upside.

Short-term bears who hold positions to the downside should maintain them.

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
Short Term: Down and in an overbought position
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, experienced and intra-day failure to the downside. It closed, on decreased volume in the upper quarter of a sustained price spread, in a slightly oversold condition relative to the Technometer. The intra-day failure suggests a lack of supply.

A review of the intra-day waves indicates the presence of demand. After a gap opening to the downside and a brief, five-minute follow-through to point X, the Wyckoff Wave rallied for the next five hours and 5 min. to point Y. There, demand was withdrawn and some supply returned.

The Wyckoff Wave is in an intra-day negative inharmonious action with its O-P Index when compared with point W.

Today’s intra-day rally took the Wyckoff Wave back to the halfway point of the reaction from points W to X. The withdrawal of demand suggests the Wave may be putting in a corrective intra-day rally and could react again to test the lows at point X.

If that happens and the Wyckoff Wave moves below point X the intra-day trend would change to down.

That scenario is supported by the intra-day negative inharmonious action described above.

A second scenario has the Wyckoff Wave continuing to rally and testing the highs in the area of point W. This scenario is supported by the Technometer’s oversold condition.

The withdrawal of demand in the area of the halfway point is a negative indication. However, today was more of a demand driven day. The Wyckoff Wave can certainly rally tomorrow. Tomorrow’s market action will provide an indication of this relative strength of the demand and if the halfway point of the honored.

The Optimism – Pessimism Index rallied. It continues in a negative divergence with the Wyckoff Wave when compared with point E. It continues to test the supply line of its upward trend channel.

Tomorrow, the Technometer will open in an oversold condition.

Today the Wyckoff Wave attempted to continue Friday’s strong move to the downside. However, demand came into the market and the Wyckoff Wave rallied.

The Wyckoff Wave tested the support line drawn from point D and rallied off that support. This gives it a chance to continue to rally and test the highs at points J and H.

That the Wyckoff Wave did not reach the short-term down trend channel’s support line at either points I and K is a positive indication.

However, if the Wyckoff Wave runs out of demand or if supply comes into the market, it can react again and retest the support. The retest could result in a Spring. The positive indications at points I and K could be a precursor to a more important move to the upside. There are no specific indications that this will happen, however it is a scenario that should be kept in mind.