Tuesday Could Be Important

Monday, October 10, 2016

What To Do?

Short Term:
Short term bulls, who entered the market, should maintain their positions.
New positions can be taken if the Wyckoff Wave either successfully tests the support line drawn from point D or on a Spring of that support.
If I am incorrect and the Wyckoff Wave reacts sharply through the support, position should be closed.
There are no short-term positions to the downside.

Intermediate & Long Term:
Their are no intermediate or long term opportunities to the upside.
Long-term positions to the upside should be maintained.
New positions to the upside can be taken on a successful Spring.

There are no intermediate or long term opportunities to the downside

Market Trends:

Intra-day: Changed to Down
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on increased volume. It closed in the lower half of a wider price spread, in a slightly oversold condition relative to the Technometer. The price spread and volume suggest the presence of supply.

A review of the intra-day waves confirms the above. After a wide gap opening to the downside, supply continued and the Wyckoff Wave reacted for the entire trading day.

The Wave attempted a brief, end of day rally, that lasted for ten minutes. It gained little ground on high volume. This suggests a continued presence of supply.

The intra-day trend is changed from neutral to down. The Wyckoff Wave is already in an oversold position relative to that trend channel.

Today’s supply suggests the Wyckoff Wave will continue to react and test the support shown on the daily vertical line chart.

The Optimism – Pessimism Index reacted, but remains in a short-term harmony with the Wyckoff Wave. It remains in a longer-term, positive inharmonious action, with the Wyckoff Wave, when compared with point B.

The Force Index continues to produce moderately negative readings. At this time, there is no mitigating impact on the slightly oversold Technometer.

Tomorrow, the Technometer will open in an oversold condition.

Today, the Wyckoff Wave reacted sharply and moved into a position to test the support line drawn from point D.

The Wyckoff Wave is now in a position where it will either test the support and rally back towards the highs at point E, or Spring the support and begin a more important move to the upside.

Tuesday could be an important day. If the rally off support occurs, Tuesday will bring narrower price spread and reduced volume. If the Wyckoff Wave is going to Spring this phase of the trading range, there will be early supply. The Wyckoff Wave will react through the support encounter strong demand and rally.

While it is always possible the Wyckoff Wave will react through the support and continue back into the trading range, the oversold Technometer and the relatively strong Optimism – Pessimism Index suggests that scenario has a low probability of success.