The Wyckoff Wave Begins A Correction

This past week the Wyckoff Wave traded lower breaking its accelerated uptrend.  Volume was average but with an increase on Friday’s sharp selloff.

The Technometer is trading oversold.

For the week the S&P was down 3.83%, and the Nasdaq 3.53%.

The Wave spent the week correcting its gains of 2018.

The O-P has returned to trading in correlation to the Wyckoff Wave and spent the week correcting as well.

The Force Index continues to show relative weakness to the Wave and continues to apply pressure to the downside.

The Technometer began the week trading slightly above neutral, and finished the week oversold.
 

 
The one year daily chart shows the Wyckoff Wave meeting a little resistance at the overbought line of the accelerated uptrend, and then breaking the support line of the uptrend.   It should continue lower working out the minor downside count of the last three weeks of distribution.
We have been looking for a correction as many sentiment readings are at 30+ year extremes.  Last week we finally felt the curse of widespread bullishness.  We have now broken the recent uptrend and must consider the markets in correction mode.  We quickly have returned to oversold on the Technometer so we might need some sideways trading before we can continue lower.
 

 
The Wyckoff Wave Growth Index (WWG) traded lower for the week and also broke its accelerated uptrend channel.  Volume was heavy on the selloff.   The Technometer is trading near neutral and leaves room for this market to continue its correction.
 

 
The bond market traded sharply lower for the week as we expected.  The OP and Force have hit new lows with the TLT index and continue to provide downside pressure.  The Technometer is oversold and we are below the oversold line of the downtrend in purple.  So we could see some consolidation and sideways action before we continue lower in this market.  Stay short for further weakness…
 

 
IMPORTANT ANNOUNCEMENT:  This week we will be launching our “Pulse of The Market” for Cryptocurrrencies.  This software will have consolidated volume for the Crypto’s which will be most important when applying Technical Analysis.
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Good Trading,

Todd Butterfield