Trying to find support?

Click Here For Wyckoff Wave Chart 01-21-2016

Short Term:

Short-term positions to the downside should be closed. There are no new opportunities.

Short-term bulls could continue to consider new opportunities to the upside if the support at the bottom of the trading range or Spring scenarios play out. Until then, candidates can be identified, but new positions should not be taken.

Intermediate & Long Term:

Intermediate and long-term bulls should maintain existing positions.

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

Market Trends:

Intra-day: Down, but weakened, in an overbought position. It is also in danger of being broken.

Short Term: Down

Intermediate Term: Down, but weakened and in an oversold position.

Long Term: Neutral.

The stock market, as measured by the Wyckoff Wave, experienced and intra-day failure to the downside. It closed, on decreased volume, in the upper half of a narrower price spread, in a low neutral condition relative to the Technometer. The intra-day failure suggests a lack of demand.

A review of the intra-day waves confirms the above.

After a gap opening to the downside, supply came into the market and the Wyckoff Wave reacted to point J. It then put in a long three hour and 20 min. rally to point K. The rally was of poor quality and some supply returned at point K.

The Wyckoff Wave reacted to point L. Supply was withdrawn and the Wyckoff Wave made another poor quality attempt to rally. Again, the rally was on a lack of demand.

Once again the Wyckoff Wave left the intra-day down trend channel to the upside. It also was unable to reach the channels support line on the reaction to point J.

However, today’s poor quality performance suggests the Wyckoff Wave is vulnerable to react and test the lows at point H. If the reaction holds above the channels supply line, the intra-day down trend will be broken and the trend will be changed to either neutral or up.

The Optimism – Pessimism Index reacted. It is now in a slightly oversold position relative to its upward trend channel. The positive divergence with the Wyckoff Wave when compared U remains in place. However, it is a slight divergence and will be eliminated if the Wyckoff Wave continues its move to the upside.

The Force Index reacted and is producing extremely high negative readings. It is in a positive divergence with the Wyckoff Wave when compared at points U and Q.

Tomorrow, the Technometer will open in an oversold condition.

Today, the Wyckoff Wave tried to react, but then put in a poor quality rally. This suggests the Wave could react again and test yesterday’s lows or the bottom of the trading range at point Q.

The Wyckoff Wave returned to the short-term down trend channel and closed right at the channel’s supply line.

Yesterday’s positive indications remain in place. The most important is the lack of effort to the downside by the O – P Index when compared with the Wyckoff Wave. Even if the divergence is removed, there will be a significant positive inharmonious action.

In addition, the Technometer will open on Friday in an oversold condition. If the Wyckoff Wave reacts, the Technometer will become clearly oversold or extremely oversold. Regardless of the high negative readings and the Force Index, it is difficult for a reaction to continue when the Technometer is clearly or extremely oversold.

Today’s lack of demand strongly suggests the Wyckoff Wave did not spring the low at point U. The other scenarios remain in place.

The Wyckoff Wave could establish support between here and the bottom of the trading range and a rally. The Wyckoff Wave could Spring the bottom of the trading range that is marked by point Q. These two scenarios have the highest probability of success.

The reaction from point D could be a Sign of Weakness. This longshot scenario is even more diminished by today’s market action.

Charts of the Wyckoff Wave are attached.