Testing The Top of the Trading Range

Friday, July 1, 2016

Click Here to View the Wyckoff-Wave-07-01-2016

What To Do?

Short Term:
Their 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.

There are no intermediate or long term opportunities to the downside.

Market Trends:

Intra-day: Up and in a overbought position
Short Term: Neutral
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded slightly higher on decreased volume. It closed in the middle of a narrower price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves confirms the above. After a very small gap opening to the upside, the Wyckoff Wave put in a poor quality rally to point M. There, demand was withdrawn and the Wyckoff Wave moved sideways for the rest of the trading day.

The Wave attempted to rally three times during the trading day. All three rallies, from points N, O and P quickly ran out of demand and the Wyckoff Wave was unable to make any progress to the upside.

In addition, the Wyckoff Wave was unable to reach the support line of its intra-day up trend channel (reverse use of trend lines) at point M. It reacted and weakened that channel at point O. It is now in a position to return to the normal intra-day up trend channel.

Despite today being the beginning of a holiday weekend, the Wyckoff Wave’s lack of demand suggests it is putting in a successful intra-day test of point X and will react. The reaction should at least test the support line of the normal intra-day up trend channel and quite possibly weaken and break that channel, as well.

The Optimism – Pessimism Index reacted slightly. It remains in the upper portion of its upward trend channel. The negative divergences with the Wyckoff Wave, when compared with points V, A and C remain in place.

The Force Index rallied and is producing positive readings.

On Tuesday, the Technometer will open in a neutral condition.

Today the Wyckoff Wave needed to “go and go now” if it was going to move through the top of the trading range into new high ground. So far, that attempt has failed. This makes the Wyckoff Wave vulnerable to react and test the low at point D.

While we are seeing a lack of demand as the Wyckoff Wave approaches the top of the trading range, the Technometer remains in a neutral condition and the Force Index is strengthening. The O – P Index is the only Wyckoff tool sending a negative signal.

This suggests it may be a bit premature to consider new short-term positions to the downside. While I suspect the Wyckoff Wave will react, I would like to see more negative signals before considering entering the market to the downside.

This weekend we will be transitioning to our new website and Pulse of the Market charting service. This week we have used the charts from the new charting service as part of our pulse of the market report. I will also use them for Sunday’s Week in Review letter.

To access the new charting service you can still go to
https://wyckoffstockmarketinstitute.com/Stock/index.php
You will be automatically transferred to the new charting service. Just enter your username and password for access. If you would like to have your username and password remembered and not have to login every time, just check the Remember Me box.

You can also login by going to https://wyckoffstockmarketinstitute.com. You’ll be taken directly to the new website and can login by clicking on Charting Members on the menu on the left side of the homepage.

Please feel free to e-mail me at jim@wyckoggstockmarketinstitute.com if you have any questions or problems accessing the new Pulse of the Market Charting Service.

Best wishes for a safe and restful Fourth of July weekend.