Testing Last Friday’s Lows

Thursday, July 28, 2016

Click here to open the attached charts

What To Do?

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

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: Although an intra-day chart is not available, today’s market action changes the intra-day trend back to Neutral
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, experienced and intra-day failure to the upside. It closed in the lower half of a slightly narrower price spread, in a nearly overbought condition relative to the Technometer. The intra-day failure suggests the presence of supply.

Unfortunately, due to a glitch in the intra-day charts, we will be unable to present an intra-day chart of the developing trading range. However, a review of the intra-day wave data confirms the above.

The Optimism – Pessimism Index rallied and is in an overbought position relative to its upward trend channel.

The Force Index also rallied and is producing positive readings.

Tomorrow, the Technometer will open in a high neutral condition.

After a gap opening to the downside, the Wyckoff Wave attempted to rally and ran into supply. The subsequent reaction drove the Wyckoff Wave down to test last Friday’s lows. The Wyckoff Wave has reacted off the lows on a lack of demand.

The nearly overbought Technometer suggests the Wyckoff Wave will continue to react and decline through Friday’s lows. As the original intra-day sign of weakness was eliminated, when the Wyckoff Wave returned to the intra-day trading range, the support lines marking the bottom of the trading range have been changed to include last Friday’s low.

This gives the Wyckoff Wave an opportunity to put in a second attempt at an intra-day sign of weakness. If it is successful and there is a poor quality rally back for a Last Point of Supply, it will open the door for new short-term positions to the downside.

Even though the reaction back into the trading range scenario has an increased probability of success, intermediate and long-term Bulls should continue to maintain their positions