Testing Support

Wednesday, September 14, 2016

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What To Do?

Short Term:
Short term bulls should continue to look for new opportunities to the upside.
There are no short-term positions 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: Down
Short Term: Down
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on slightly decreased volume. It closed in the lower half of a narrower price spread, in a clearly oversold condition relative to the Technometer. The price spread and volume suggest a lack of supply.

A review of the intra-day waves indicates the presence of some supply.

After a small gap opening to the upside and a brief, five-minute follow-through, supply returned and the Wyckoff Wave reacted. The reaction only lasted five minutes. Demand returned and the Wyckoff Wave rallied to the high for the day at point C.

Supply returned and the Wyckoff Wave reacted to point D. The reaction lasted for five hours and the Wave did not make noticeable progress to the downside. This suggests that while supply was certainly present, some demand was coming back into the market. That demand helped the Wyckoff Wave rally for the last 35 min. of the trading day.

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

Once again, the Wyckoff Wave was unable to react strongly and reach the support line of its intra-day up trend channel. This continues to make the Wyckoff Wave vulnerable to rally and weaken that trend channel.

While the Wyckoff Wave may react slightly tomorrow, demand is expected to return and the Wyckoff Wave to rally.

The Optimism – Pessimism Index reacted. It continues in a positive inharmonious action with the Wyckoff Wave when compared with point D. The O-P Index remains in the upper portion of its upward trend channel.

Tomorrow, the Technometer will open in an oversold condition.

Today, the Wyckoff Wave reacted and continues to test the support line drawn from point D. While supply was certainly present, it was not overpowering.

Like the intra-day down trend channel, the Wyckoff Wave has also been unable to reach the support line of its short-term down trend channel. In fact, since the rally to point H, the Wyckoff Wave has been constantly weakening its short-term down trend channel.

This, coupled with the clearly oversold Technometer and the positive inharmonious action with its O-P Index, continues to suggest the Wyckof him him f Wave is prepared to rally.

While the rally off support scenario has the highest probability of success, Wyckoff traders should watch for a possible Spring. This could probably happen either tomorrow or on Friday.