Weakness To The Upside Continues

Tuesday, November 22, 2016

What To Do?

No changes from Monday

Short Term:

Short-term bulls should continue to maintain their positions. The expected minor reaction would create a difficult risk/reward ratio for any new positions to the downside. Short-term short positions are not recommended.

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
Short Term: Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on slightly increased volume. It closed in the upper half of a narrower price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest the presence of supply.

A review of the intra-day waves indicates today featured a lack of demand. After a gap opening to the upside, the Wyckoff Wave rallied to point S. The rally was on narrowing price spread and decreasing volume. This suggested a lack of demand.

Demand was withdrawn at point S and the Wyckoff Wave reacted to point T. The reaction was on a lack of supply.

Then, the Wyckoff Wave began a long, slow, two hour and 35 min. rally to point U. Once again, the rally was on a lack of demand.

After a brief reaction the Wyckoff Wave made one final attempt to rally. After a good start, the rally stalled as supply came into the market. The Wyckoff Wave reacted for the last 10 min. of the trading day.

The intra-day O-P Index is in harmony with the Wyckoff Wave.

A new intra-day up trend channel has been drawn in blue. Today, the Wyckoff Wave weakened that channel on the reaction to point T and was unable to reenter the channel on the subsequent intra-day rallies. If the Wyckoff Wave reacts tomorrow, the trend has a reasonable chance of being broken.

Today’s lack of demand suggests it will be extremely difficult for the Wyckoff Wave to continue its rally to the upside. This scenario is supported by a weakening of the intra-day up trend channel. The reaction scenario still remains in place.

The Optimism – Pessimism Index rallied slightly. It has returned to short-term harmony with the Wyckoff Wave when compared with point T. The longer-term negative divergences with points N, J and H remain in place.

The Force Index reacted and is producing lower negative readings.

Tomorrow, the Technometer will open in a low neutral condition.

Today, the Wyckoff Wave put in another poor quality rally and is testing the high at point T. The relatively reduced volume, over the last three trading days, continues to suggest weakness as the Wave attempts to rally past point T and test the top of the trading range.

There are no indications from the Wyckoff tools that suggest the rally will continue. More importantly, the analysis of price spread and volume continues to show relative weakness.

Nothing over the last several days has changed the expectations that the Wyckoff Wave will react and test the halfway point of the rally from point S to point T.