Testing Thursday’s High

Monday, November 14, 2016

What To Do?

No changes from Friday

Short Term:

Short-term bulls should continue to maintain their positions.

There are no short-term positions to the downside.

Intermediate & Long Term:

Intermediate and long term positions to the upside should be maintained.

There are no intermediate or long term opportunities to the downside

Market Trends:

Intra-day: Up.
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 middle of a wider price spread, in a nearly overbought condition relative to the Technometer. The price spread and volume suggest the presence of demand.

A review of the intra-day waves indicates today was a supply day. After a gap opening to the upside, demand remained and the Wyckoff Wave rallied to point F. There the Wave ran into supply and reacted to point G. This all happened during the first two hours of the trading day.

For the rest of the day the Wyckoff Wave attempted to rally, but made little progress. The narrow price spread and relatively high volume suggests supply remained and did not allow the rally to gather much momentum.

This intra-day rally is probably a test of the mornings high at point F. So far the presence of supply suggests the test will be successful and the Wyckoff Wave will react and weaken the intra-day up trend channel.

The Optimism – Pessimism Index reacted. It remains in a negative divergence with the Wyckoff Wave when compared to points N, J and H.

The Force Index moved sideways and continues to produce moderate negative readings.

Tomorrow, the Technometer will open in a slightly overbought condition.

Today, the Wyckoff Wave attempted to rally and test Thursday’s high. The appearance of supply for the rest of the trading day suggests the test will be successful.

A successful test gives the Wyckoff Wave an opportunity to react and put in a Last Point of Support in the trading range.

There are no changes in the Wyckoff tools that suggest the reaction scenario will not play out.

As mentioned Friday, look for the Wyckoff Wave to react and test the support areas at points T and R. If the test is successful and the Wyckoff Wave puts in a Last Point of Support, this will be an excellent entry point to the upside.