Wyckoff Wave Met Resistance As Expected.
The Wyckoff Wave closed the week down sharply, on low volume.
For the last week and a half, the Wave had met resistance at its previous support on an overbought Technometer. We warned of lower prices ahead, which we got Thursday/Friday.
We now expect at minimum a little lower this week to test the previous low, with hopefully low volume.
If volume comes in and the test fails, then we should have much more downside price action to come.
The Technometer is slightly below neutral at a reading of 43.4.
You can see that leading up to Thursday’s highs, that the OP was leading the Wave considerably. This was showing buying coming in, but not able to advance price. Once buying stopped, the Wave turned sharply lower.
WWN – The Wyckoff Wave New Index was also down sharply on low volume.
We had mentioned here as well about the Index rallying into resistance on low volume and an overbought Technometer. Those conditions also brought in sharp selling to end the week here.
With volume low and the Technometer nearing oversold, we could see a successful test of last months low. We will be on the look out for such.
The Technometer is nearing oversold with a reading of 39.74.
The Wyckoff Wave Growth Index also succumbed to selling late in the week as expected.
The last three times we have become overbought this market has turned lower.
Here we was expecting at least a test of last months low.
The Techometer is nearing oversold at 41.6.
The SPY closed the week sharply lower, with a little higher volume coming in on Friday’s selling.
The Technometer was extreme overbought a week and a half ago as shown by the red dot.
Last week’s analysis I will repeat so you can understand the concept of last week’s prediction of lower prices.
“As you can see at the blue arrow/dot, this is where the OP bottomed, which means this is where volume decided to turn higher. This is shown by the blue line. So as plus volume returned to the SPY, it took price only up to where it was when volume turned higher at the blue dot. Which is at the same level, so no price gains while plus volume came into the market.
Volume also increased on the decline as marked by the red line, while declining as prices rose as shown by the green line. All of the above, appears will usher in more selling next week”.
The above conditions lead to last weeks abrupt selloff. With the Technometer nearing oversold, we will be on the lookout for a successful test of last months lows.
We are nearing oversold on the Technometer at 39.8.
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The bond market closed lower last week on lower volume as well.
The Technometer was overbought last week and we was looking for this market to continue to move lower. We now have the Technometer oversold and could get extreme oversold if this market would touch a new low for the move. We look to be buyer early in the week if conditions warrant.
The Technometer is oversold with a reading of 36.5.
The GDX closed the week flat on low volume.
We had an overbought Technometer last week so we thought the upside was limited. We mentioned on our video update that we could see the GDX revisit $31-31.50, and this could give a good entry level.
Friday’s early action saw us trade down to $30.50, then strong buy volume came into close us sharply higher for the day. We like this action for further strength ahead.
The Technometer is neutral at a reading of 43.6.
The long dollar ETF, UUP closed the week nicely higher on low volume.
We had mentioned on our video update that we lean bearish, but could see a possible slight rally this past week. Friday was a strong day higher, but we are watching for a test of the highs, and a turn lower.
The Technometer is near neutral/overbought with a reading of 46.4
Bitcoin traded lower last week on low volume, in sympathy with the Nasdaq as continues to be the case.
The Technometer has once again came back to an oversold reading below 38.
We will be looking for stocks to test the previous low, and will do the same for Bitcoin.
Our Technometer for Bitcoin is oversold with a reading of 37.6.
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Good Trading,
Todd Butterfield
