We Had An Oops

Tuesday, November 1, 2016

What To Do?

No changes from yesterday

Short Term:
Short-term bulls should continue to maintain their positions. In addition, new positions can be considered to the upside.

There are no short-term positions to the downside.

Intermediate & Long Term:

Intermediate and long term positions to the upside should be maintained.

There are no intermediate or long term opportunities to the downside

Market Trends:

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

The stock market, as measured by the Wyckoff Wave, traded lower on slightly increased volume. It closed in the lower half 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 indicates today was a lack of demand day.

After a gap opening to the upside and a brief, five-minute, follow-through, the Wyckoff Wave reacted to point K. The reaction was on wider price spread than yesterday and relatively low volume. This suggested a lack of demand.

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

Demand came into the market at point K and the Wyckoff Wave rallied for the rest of the trading day. It also returned to its intra-day up trend channel.

Today’s reaction placed the intra-day O-P Index back in harmony with the Wyckoff Wave.

It also eliminated the Last Point of Supply scenario from consideration. As the Wyckoff Wave reacted back into the trading range. This changes both the support and resistance lines.

On the move to point K, the Wyckoff Wave reacted slightly below the low at point A. This is a potential Spring. While demand did come into the market at point K, it was not particularly strong. In this case it might be wise to wait until a successful Secondary Test before confirming the Spring scenario.

Regardless, look for the Wyckoff Wave to rally back towards the resistance at point F.

The Optimism – Pessimism Index reacted. It has returned to harmony with the Wyckoff Wave when compared with point K. Today’s reaction produced a longer-term positive divergence with the Wave when compared with point D.

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

Tomorrow, the Technometer will open in an oversold condition.

Yesterday’s market action certainly appeared to be at or extremely close to a successful intra-day Last Point of Support. Instead, the Wyckoff Wave reacted and tested the support line drawn from point D.

While the oops was certainly is a blow to my ego, today’s market action continues to suggest the Wyckoff Wave will rally off the support and make an attempt to return to test the resistance in the area of point E.

Although this scenario is supported by an oversold Technometer, the strong negative readings from the Force Index suggest any move to test point E will not be quick or in a straight line.

There is a good probability the Wyckoff Wave will rally off the support, but then retests it before making a definitive move to the upside.

Regardless, the oversold Technometer and the positive divergence with the O – P Index suggest that a continued reaction back into the trading range continues to have a low probability of success.

Look for the Wyckoff Wave to rally and test last weeks high at point R.