Working On A Last Point Of Support

Thursday, September 22, 2016

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What To Do?

Short Term:
Short term bulls, who entered the market, should maintain their positions. Watch any intra-day reaction tomorrow. If it is on reduced price spread and volume new positions can be taken to the upside.
There are no short-term positions to the downside.

Intermediate & Long Term:
Their are no intermediate or long term opportunities to the upside.
Long-term positions to the upside should be maintained.

There are no intermediate or long term opportunities to the downside

Market Trends:

Intra-day: Changed to Up
Short Term: Changed to Neutral.
Intermediate Term: Neutral
Long Term: Neutral

The stock market, as measured by the Wyckoff Wave, traded higher on decreased volume. It closed in the lower half of a narrower price spread, in a neutral condition relative to the Technometer. The price spread and volume suggest a lack of demand.

A review of the intra-day waves confirms the above. After a nice gap opening to the upside and a brief 10 min. follow-through to point X, the Wyckoff Wave reacted slightly. Then it moved sideways for the next 4 hours. During that time it was unable to make any progress to the upside as demand was being withdrawn.

Some supply came into the market and the Wyckoff Wave reacted to point Y. Then it spent the last hour and 20 min. of the trading day attempting to rally. The lack of progress in increased volume suggested supply was coming into the market. This makes the Wyckoff Wave vulnerable to react back towards the resistance, now support, line drawn from point M. If the Wyckoff Wave holds above this line there will be a successful Last Point of Support as the Wyckoff Wave will have Backed Up to the Creek.

While the intra-day O – P Index has reacted back to test the highs at point V, the Wyckoff Wave is held above those highs. This positive divergence helps support the successful Last Point of Support scenario.

The Optimism – Pessimism Index reacted slightly and is in a very slight positive inharmonious action with the Wyckoff Wave when compared with point D.

After some programming adjustments, the Force Index has returned. It is producing moderate negative readings.

Tomorrow, the Technometer will open in a neutral condition.

Today, the Wyckoff Wave appears to be coming to the end of the intra-day Sign of Strength and should attempt to put in an intra-day Last Point of Support. If that is successful, the Wyckoff Wave should continue its rally and test the high at point E.

There are no significant signals from the Wyckoff indicators, but it will be important to watch the Technometer and the O-P Index if the reaction continues.

Two consecutive up days have changed the short-term trend from neutral to up.

As mentioned yesterday, it will be helpful to watch the intra-day market action to see if the Wyckoff Wave can put in an LPS and then rally.