Watch and wait continues.

As the Wyckoff Wave is sending mixed signals, there are no new opportunities in either direction.

Intermediate & Long Term:  No change from Monday.

Intermediate and long-term bulls should maintain existing positions. However, positions that had reached objective areas and those that have under performed, can be liquidated as the Wyckoff Wave reached the top the top of its trading range.

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

Intra-day: Up

Short Term: Up, but weakened and in an oversold position relative to the trend..

Intermediate Term: Down and in an overbought position, relative to the trend.

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on decreased volume. It closed near the bottom of a narrower price spread, in a nearly oversold condition relative to the Technometer. The price spread and volume suggest a lack of supply.

A review of the intra-day waves indicated that the day was divided into three sections: lack of supply, lack of demand and supply.

After a gap opening to the downside, the Wyckoff Wave reacted to point N on a lack of supply. The reaction lasted for 2 hours and 25 min. Then, the Wyckoff Wave attempted to rally, but demand was withdrawn at point O. This poor quality rally lasted for an hour and 25 min.

Finally, the Wyckoff Wave ran into supply, at point O, and reacted for the rest of the trading day.

As the Wyckoff Wave reached to, point N, there was an opportunity for strong demand to return and provide the impetus for a strong rally. That didn’t happen. Instead, the Wave appears to have successfully tested yesterday’s high at point M.

The Wyckoff Wave has returned to its intra-day up trend channel. The successful test and the introduction of afternoon supply gives the Wyckoff Wave an excellent opportunity to react and test the intra-day trading range’s support line.

The Optimism – Pessimism Index rallied slightly and remains at the supply line of its upward trend channel. It is still in a short-term negative divergence with the Wyckoff Wave when compared with point P and a longer-term negative divergence when compared with points D, B, Z and X.

The Force Index rallied, but is still producing moderate negative readings.

Tomorrow, the Technometer will open in a nearly oversold condition.

Today, the Wyckoff Wave was given an opportunity to rally through the top of the trading range. Instead, it encountered supply and reacted slightly.

The Wyckoff Wave was also in a “need to go and go now” situation and it did not “go now”. Instead, today’s reaction weakened its position relative to the short-term uptrend channel.

While this suggests the Wave may have successfully tested the top of the trading range, today’s lack of supply may have provided an another opportunity to continue the rally.

The negative relationship between the O-P Index and the Wyckoff Wave supports the reaction scenario. However, that is somewhat balanced by the nearly oversold Technometer.

Tomorrow, is a critical day. The Wyckoff Wave has one more chance to rally into new high ground. If that fails, the reaction back into the trading range scenario has a strong probability of success.