Trying to break out of the range…

This past week the Wyckoff Wave was higher for the week.  Early in the week the Wyckoff Wave was quietly trading sideways, then it spent the last portion of the week trying to extend its rally above the recent resistance.  Friday saw the Wave close out on a positive note for the week.  For the week, price and volume gave no clues.

The Technometer is trading below neutral at Friday’s close.

The S&P was up 1.5% for the week and the Nasdaq over 1% .

The Wave began the week with quiet sideways action, then firmed up late in the week.  Price ended the weak on a firm note but volume was only average.  Our indicators were oversold last week and told us to be open to a rally to relieve the oversold condition last week.  This is what we got.

The O-P actually traded lower for the week, and is troublesome for the rally to continue.

We mentioned the Force Index was trying to turn up and it did just that.  It is still registering a reading of -262, but is trending higher.  The Force Index is much weaker than the Wave on a daily basis, and registering a divergence.

We still have a few shorts on such as GE which has been performing horribly.  We added a short in QQQ late in the week and expect this market to turn lower once again.

The Wyckoff Wave Growth Index (WWG) did rally off the support line of the uptrend.  The rally has now returned the Technometer to overbought at a reading of 52.61, so we think this rally is ending here, and subject to a reaction.  That is why we are short QQQ here.

 
The bond market continued to experience losses last week.  The action here does not look positive, but the Technometer has came off of overbought without any further price weakness last week.  We would like to see a rally off of this level, and if the Technometer would return to overbought, we would like to enter a short position in TLT.
 

 
Good Trading,

Todd Butterfield