Weakening Demand

Thursday, November 10, 2016

What To Do?

No changes from yesterday.

Short Term:
Short-term bulls should continue to maintain their positions. Stops can be moved to protect early profits
.
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: Up and in an overbought position.
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on relatively high, but slightly decreased volume. It closed in the middle of a narrower price spread, in an overbought condition relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves indicates the presence of supply. After a gap opening to the upside, good demand helped the Wyckoff Wave rally to point Z. There it encountered supply and put in a minor reaction back to point A. This consumed the first 90 minutes of the trading day.

Then, like yesterday, the Wyckoff Wave began a long slow rally. Today’s move lasted for two hours and 45 minutes. The market action was on relatively narrow price spread and reducing volume. This suggested that demand was weakening and the rally was stalling.

At point B, demand was withdrawn and supply returned to the market. The Wyckoff Wave reacted for the last two hours and 15 minutes of the trading day. The reaction was on increasing price spread and volume. However, the lack of progress suggests demand was still present.

The Wyckoff Wave remains in an overbought position relative to its intra-day up trend channel. Today’s withdrawal of demand and appearance of supply suggests the Wyckoff Wave will react and return to its intra-day trend channel.

The Optimism – Pessimism Index rallied. It remains in a negative divergence with the Wyckoff Wave when compared with points N, J and H.

The Force Index rallied and is producing moderate negative readings. This supports an overbought Technometer.

Tomorrow, the Technometer will open in an overbought condition.

Today, the Wyckoff Wave continued its rally off the support line drawn from point D. The relatively high volume and narrowing price spread suggests the Wyckoff Wave is beginning to encounter supply and could put in a corrective reaction, within the trading range.

Yesterdays comments still prevail.

However, the market is looking increasingly bullish. There is a reasonable probability that the Wyckoff Wave will, after a corrective reaction, be able to rally through the top of the trading range and continue into new high ground.

The overbought Technometer and the moderately negative readings of the Force Index support the normal corrective reaction, within a trading range, scenario.

If the Wyckoff Wave reacts, as expected, it will be important to watch both the Technometer and the Force Index. If the Technometer becomes more oversold on the reaction, then it was at point S and the reaction stops in the area of point R, it would be a positive indication.

A normal corrective reaction would also allow the placement of a new short-term uptrend channel.

Look for the Wyckoff Wave to react, but hold above the halfway point of the move from point S.