We are in a watch and wait situation

Click Here For Wyckoff Wave- Chart 06-17-2016

Short Term:

Their are no short-term opportunities to the upside.

There are no short-term opportunities to the downside

Intermediate & Long Term:

Their are no intermediate or long term opportunities to the upside.

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

Market Trends:

Intra-day: Neutral.

Short Term: Neutral

Intermediate Term: Neutral

Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, experienced an intra-day failure to the downside. It closed, on increased volume, in the upper half of a narrower price spread, in a clearly oversold condition relative to the Technometer. The intra-day failure suggests the presence of demand.

A review of the intra-day waves indicates today was more of a supply driven day.

After a small gap opening to the downside and a 10 min. follow-through, on good supply, the Wyckoff Wave rallied to point O. There, demand dried up, supply returned and the Wyckoff Wave reacted to point P. This all happened within the first two hours of the trading day.

Then the Wyckoff Wave put in a long slow rally to point Q. After the first intra-day wave, the rally was on relatively narrow price spread and low volume. The last intra-day wave that ended at point Q lasted for an hour and 15 min. on relatively light volume. Then, the Wyckoff Wave reacted slightly to end the trading day.

The last intra-day wave only lasted 5 min., but was on extraordinarily high volume. The fact that it made little progress to the downside on that volume, is an indication that some demand was coming into the market.

The inability of demand to come in and take over the market suggests the Wyckoff Wave will have a difficult time rallying past the most recent high at point I. There is a good possibility that the Wyckoff Wave will react on Monday and test the lows at point L.

The Optimism – Pessimism Index reacted, but continues in an overbought position relative to its upward trend channel. The negative divergence with the Wyckoff Wave, when compared with point the remains in place.

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

On Monday, the Technometer will open in an oversold condition.

Today, the Wyckoff Wave attempted to react and test yesterday’s low. So far, the test has been successful. However, the intra-day analysis suggest the test may not be complete.

While the Technometer is in a clearly oversold condition, the weak Force Index suggests that any rally will run into resistance. This is what happened today. Demand had an opportunity to take over the market, but failed.

We are now in a watch and wait situation. The Wyckoff Wave could certainly continue to rally and test the high at point A. It could also react and retest the low at the halfway point marked on the chart.