Testing the Top of the Trading Range

Click Here For Wyckoff Wave Chart 06-30-2016

Short Term:

Their are no short-term opportunities to the upside.

There are no short-term opportunities to the downside. Today’s good demand suggests the Wyckoff Wave needs to successfully test the highs at points C, before any new positions to the downside can be taken.

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 an oversold position relative to the trend

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 near the top of a wider price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest the presence of demand.

A review of the intra-day waves confirms the above. After a small gap opening to the upside, the Wyckoff Wave rallied for the rest of the trading day. Demand was especially strong as the Wyckoff Wave rallied to point K. Then, it appeared to encounter some resistance and moved sideways for the last hour and 40 min. of the trading day.

Some demand returned on the last intra-day wave of the trading day, as the Wyckoff Wave rallied off point L.

The Wyckoff Wave has moved into a severely overbought position relative to its intra-day up trend channel. The relative strength allows the drawing of a new up trend channel.

The new up trend channel, using the reverse use of trend lines is marked by the green trend lines. The supply line is drawn first and runs through points H and J. Then the parallel support line is drawn from point I.

Despite its relative strength, it should be noted that the Wyckoff Wave was unable to reach its new supply line at point K. Unless the Wyckoff Wave is able to rally strongly tomorrow morning, it is vulnerable to react back into the original intra-day up trend channel.

The Optimism – Pessimism Index rallied. It is in an overbought position relative to its upward trend channel. It is also in a negative divergence with the Wyckoff Wave when compared with points V, A and C.

The Force Index rallied and is producing positive readings.

Tomorrow, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave put in another strong move to the upside and is in a position to test last week’s high at point C.

Despite today’s good demand, we are beginning to see indications that the test of point C has a good chance of being successful. This is shown primarily with the O – P Index’s developing negative divergences with the Wyckoff Wave.

In addition, on the intra-day chart, the Wyckoff Wave is beginning to encounter resistance.

If the Wyckoff Wave is going to rally past point C into new high ground, it needs to “go and go now”. That means that strong demand needs to come in to the market tomorrow morning. If that doesn’t happen the Wyckoff Wave could react and test the lows at point D.