Supply And More Supply

Friday, September 9, 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: Changed to Down
Short Term: Changed to Down
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on increased volume. It closed near the bottom of a wider price spread, in an oversold condition relative to the Technometer. The price spread and volume suggest the presence of supply.

A review of the intra-day waves confirms the above. After a wide gap opening to the downside, supply continued as the Wyckoff Wave reacted strongly during the entire trading day.

The Wyckoff Wave is an intra-day harmony with its O-P Index.

Today’s long awaited supply came into the market with a vengeance and the Wyckoff Wave easily took out the intra-day low at point E.

The intra-day trend is changed to down. Because the decline was so steep a new intra-day trend channel cannot be drawn. If the Wyckoff Wave puts in a corrective rally after the strong supply, this will provide the opportunity to draw in a new intra-day short-term down trend channel.

The Optimism – Pessimism Index reacted. It is still in the upper portion of its long-term uptrend channel. It is back in harmony with the Wyckoff Wave. It is in a positive inharmonious action with the Wyckoff Wave when compared with point D.

On Monday, the Technometer will open in a low neutral condition.

Today, the Wyckoff Wave reacted through last week’s low at point I. It is now in the process of testing the June low at point D.

Today’s reaction changes the short-term trend from neutral to down. A new trend lines have been drawn in red from points E and F on the vertical line chart.

Today’s reaction placed the Wyckoff Wave in a slightly oversold condition, relative to its new short-term down trend channel.

This oversold condition may cause the Wyckoff Wave to put in a small corrective rally, but it will be more important to watch how the Wyckoff Wave behaves as it approaches the lows at points D and Z. These could be importance support areas in the trading range phase that begins at point V on the yearly vertical line chart.