Watch and Wait.

Their are no short-term opportunities to the upside.

Aggressive short-term bears should maintain their existing positions. If the Wyckoff Wave rallies, the quality of the demand needs to be strong and sustained before positions should be closed. The successful test of point V still has a strong probability of success.

Intermediate and long-term bulls should maintain existing positions.

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

Intra-day: Up and in an oversold position.

Short Term: Neutral.

Intermediate Term: Neutral

Long Term:  Neutral

The stock market, as measured by the Wyckoff Wave, traded lower on decreased volume. It closed at the bottom of a wider price spread, in an overbought position relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves indicates that today was a supply day. After a gap opening to the downside, supply remained and the Wyckoff Wave reacted for the rest of the trading day.

Supply was relatively strong during the intra-day wave that began at point N and ended at point M. There, the Wyckoff Wave attempted to rally, but supply prevented that effort and the Wyckoff Wave continued its reaction.

However, beginning at point N, supply began to moderate. It was still present, but not overpowering. An example of this is the intra-day wave marked #1. While it reacted on wide price spread and high volume, the intra-day waves lasted for 2 hours and 40 min.

Then, after completing that intra-day wave, supply began to dry up and the Wyckoff Wave made little progress to the downside.

The Wyckoff Wave also moved into an oversold position relative to its intra-day up trend channel.

The oversold position and the moderate supply level offer two scenarios. The Wyckoff Wave could attempt to rally and test the high at point L, or the reaction off point L could continue.

Tomorrow, the Wyckoff Wave will probably attempt to return to the trend channel. How it does so will be the key to which scenario prevails.

The Optimism – Pessimism Index reacted. It remains in an overbought position relative to its upward trend channel. The short-term negative divergence with the Wyckoff Wave, when compared with point V, has been changed to a short-term negative inharmonious action.

The Force Index reacted and is producing moderate negative readings. There is no mitigating impact on the overbought Technometer.

Tomorrow, the Technometer will open in an overbought condition.

Today the Wyckoff Wave reacted on moderate supply. However, the supply was not strong enough to guarantee the reaction will continue and the Wyckoff Wave will move through point W and test the lows at points S and U.

The overbought Technometer will make it extremely difficult for any rally to be sustained. It is supported by the negative inharmonious action with the O – P Index and the moderately negative Force Index readings.

However, the question is whether yesterday was the test of point V or it is still to come.

Today’s moderate supply and the decreasing volume over the past several trading days, suggests the Wyckoff Wave may still rally to test point V, before reacting.

If the Wyckoff Wave continues to react, it will quickly encounter some support at the resistance now support line drawn through points B and D and the sideways base formed by points U and S.

The Wyckoff Wave needs to give us a bit more information before positive conclusions can be drawn.