The Summer Doldrums Continue
Thursday, August 11, 2016
What To Do?
Short Term:
There are no short-term opportunities to the upside.
Aggressive short-term bears should maintain their positions. However, they should be closed if strong demand returns. The probability for strong demand coming into the market continues to decrease.
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 a slightly oversold position
Short Term: Neutral
Intermediate Term: Neutral
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 neutral condition relative to the Technometer. The price spread and volume suggest the presence of supply.
A review of the intra-day waves indicates that the morning featured a lack of demand and the afternoon supply.
After a gap opening to the upside, the Wyckoff Wave put in a poor quality rally to point B. The rally was on relatively reduced price spread and volume and suggested a lack of demand.
Despite the gap opening to the upside, there was little follow-through and the Wyckoff Wave was unable to return to its intra-day down trend channel. It remains in an oversold position relative to that channel.
This opened the door for supply, which returned and the Wyckoff Wave reacted for the rest of the trading day.
Today’s late supply suggests the Wyckoff Wave will, at least, react through the lows at points A and X.
The presence of supply is not a significant as the continued lack of demand. The Wyckoff Wave has simply been unable to put together any kind of a strong rally since it began its reaction off point E. Wyckoff Wave should continue to drift to the downside until demand returned.
The Optimism – Pessimism Index reacted and remains at the top of its upward trend channel. On an intra-day, short, intermediate and long-term basis it is in harmony with the Wyckoff Wave.
The Force Index rallied and is producing positive readings.
Tomorrow, the Technometer will open in a neutral condition.
Today, the Wyckoff Wave continued its summer doldrums. The lack of demand has prevented the expected testing rally to the area of the resistance line drawn from point C.
While today’s market action does not eliminate this scenario, it opens the door for a continued reaction.
Nothing in the Wyckoff tools suggest a short-range turning point. This all suggests that while the testing rally may certainly occur, it will be successful and the Wyckoff Wave will continue to react back into the trading.
Responses