The watch and wait situation continues.

There are no short-term opportunities to the downside.

As the Wyckoff Wave continued to rally, there are no short-term opportunities to the upside.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Up, but in an overbought position.

Short Term: Neutral

Intermediate Term: Down

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on slightly increased volume. It closed near the top of a narrower price spread, in a slightly overbought condition relative to the Technometer. The price spread and volume suggest the presence of some supply.

A review of the intra-day waves indicates today featured a withdrawal of demand.

After a wide gap opening to the upside, marked by point L, the Wyckoff Wave reached the top of the trading range marked by point K. After a 20 min. sideways move, it broke through the resistance on a strong intra-day up wave to point M. This intra-day up wave ended at 10:55 AM.

The Wyckoff Wave was only able to gain an additional 99 points during the rest of the trading day. The intra-day waves narrowed. This suggested demand was being withdrawn and some supply was coming back into the market.

The Wyckoff Wave is in an overbought position relative to its intra-day up trend channel.

The Wyckoff Wave moved through the lower level resistance, marked by points B and C, on the gap opening. There was no follow-through after the strong move to point M.

Despite today’s surprising move to the upside, the Wyckoff Wave continues to send signs that the rally off point E is continuing on borrowed time. As most of the days progress was made on the gap opening and one intra-day up wave, the overall view of the days market action suggests the Wyckoff Wave will not make much additional progress to the upside and should react react.

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

The Technometer reacted slightly and is producing moderately negative readings. There is no mitigating impact on the slightly overbought Technometer.

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

Today the Wyckoff Wave rallied through the top of the mini trading range. It did so despite the withdrawal of demand, an overbought Technometer and the negative divergences with the O – P Index.

Today’s move was not an upthrust. Although the price spread was a bit narrower and volume a bit higher than yesterday, the strong close and the lack of any strong supply coming into the market is eliminates this scenario.

At the present time, it is also difficult to justify a Creek jump scenario. As mentioned above, the demand was limited to one intra-day up waves and there was no follow-through.

This would suggest the Wyckoff Wave could be putting in a new resistance level in the mini trading range or, simply moving within the more significant trading range, that began in August at point Q.

The watch and wait scenario continues. It is difficult to justify taking any new positions to the upside, this far off the low at point M. It is also difficult to identify, even in hindsight, where new positions could have been taken.

When the market doesn’t behave as expected, it is best to stand the sidelines until the situation becomes clearer.