Watch and wait continues.

Their are no short-term opportunities to the upside.

As mentioned below, after completing its reaction off point R, the Wyckoff Wave may attempt to rally and test the high. If the test is successful, it may be a good entry point for short-term positions to the downside.

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, but weakened and in an oversold position relative to the trend

Short Term: Changed to Neutral.

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 increased volume. It closed near the bottom of a wider price spread, in an 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 gap opening to the downside, supply remained and the Wyckoff Wave reacted for the rest of the trading day.

The Wyckoff Wave reacted through the intra-day up trend channel’s supply line and is now in an oversold position relative to the trend channel. It also moved slightly through the old top of the intra-day trading range.

Today’s supply was sustained, but not overpowering. As there was little demand present, there is a good probability the Wyckoff Wave will continue to react on Thursday. This could give it an opportunity to test the low at point B.

The Optimism – Pessimism Index reacted and is at the supply line of its upward trend channel. The short-term negative divergence with point B has been eliminated. The longer-term negative divergences with the top of the trading range remain in place.

The Force Index reacted and is producing moderate to high negative readings. There is a mitigating impact on the oversold Technometer.

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

Today, the Wyckoff Wave reacted off Monday’s high at point R. The short-term up trend channel was broken at point R, as the Wyckoff Wave could not penetrate the channel’s supply line. This changes the short-term trend to neutral.

While today was a positive day to the downside, the moderate volume, and the intra-day review, suggests that supply, while sustained, was not overpowering.

In addition, the Technometer has moved into an oversold condition and a potential rally would be medicated by a weakening Force Index.

These suggest that after the reaction off point R, the Wyckoff Wave may make an effort to rally and test the high at point R.

If the rally is on reduced price spread and volume and the test is confirmed, this would validate the reaction back into the trading range scenario. It would also be a good place to take short-term positions to the downside.