Wyckoff Wave at the top of the range…

The Wyckoff Wave began the week strongly higher Monday/Tuesday, then spent the rest of the week trading sideways in a narrow range. Volume was slightly higher on the rally, then trailed off the last three days on the pullback.  Our indicators show slight demand present, then supply came back in again.

The Technometer spent the week trading near neutral.

The S&P was up approximately 1.5% for the week and the Nasdaq up over 2.0% for the week.

The Wyckoff Wave spent the week continuing its rally from the week before.  The downtrend line off of supply line “N” gave away on Tuesday’s gap higher.  We have been in the correction camp for weeks, and still feel we are in the midst of a correction.  At the very least, it could be a sideways affair.

The Optimism – Pessimism Index has continued to show no strong desire to rally the last few weeks.  The divergence we spoke of at least weeks close, lead to the pop higher last week.  The divergence had the O-P exerting downside pressure, while the Wyckoff Wave was holding its ground.  These are the most reliable divergences, where there is effort, and no result.  We expected a rally off of the divergence, but not as much as we have seen.  With the O-P still showing no strong desire to rally, we now have a divergence of the Wyckoff Wave putting in higher highs, while the O-P lags considerably.  You can in the chart below, that the O-P was almost flat for the week while the Wyckoff Wave was higher.

The Force Index closed higher for the week but is still reading a negative -258.  This reading is still exerting downside pressure on stocks.

The O-P and Force continue to show relative weakness, with the Technometer is registering a neutral condition.

We are still holding short positions and look to cover on a deeper correction.  If we get an overbought Technometer early in the week we will probably implement some new short positions looking for at least a move back to point “O”.

We are also continuing to look for stocks that are outperforming to the upside, and could lead us higher after this correction has run its course.  Stocks that are having normal reactions, or preferably back up to the creeks.

 
The bond market was lower for the week as investors sold bonds to buy stocks.  We are standing aside.
Last week we raised the price of the Wyckoff Unleashed Online Course to $1,100.  We will raise another $100 at some point in the near future to get back to the original $1,200.  We are trying to keep the course at an affordable level, as well as adding numerous free items regularly.  We are wanting to continue building the Wyckoff family!!
For those of you who signed up for the Free Trading Techniques Course, we have added three more videos this week, for a total of 11 thus far.  Enjoy!!  
Good Trading,

Todd Butterfield