Timing the Trade the Wyckoff Way Message Board

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Strategies & Market Trends : Timing the Trade the Wyckoff Way

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To: coferspeculator who started this subject	5/10/2004 5:37:58 PM
From: coferspeculator	of 14340

Today, the market traded down on a wide spread with increasing volume closing off the lows in the bottom third of its range in a nearly oversold condition. The wide spread and increasing volume indicates that supply is still in control of the market. The market closed below its previous low of the year, entering a potential spring condition. With the nearly oversold condition of the market and the current spring condition a rally is possible. Wyckoff, however, advises that the wide spread on high volume to the downside as a spring condition is entered isn't likely to have the result that the bulls would wish for. The market and the other major indexes have all entered new lows for the year in harmony. The likely result of this condition may well be the establishment of a new downtrend that is a result of a distributive trading range. There is a divergence, however, within the market that can't be dismissed. While the pressure of supply has had control of the market remains in force, the pressure of supply within the tech stock area is significantly less than would be expected. In fact, it's much less then was the case when the techs were making new lows in March. This situation provides potential for the short term if a rally takes place. Emphasis for the short term on tech related issues is suggested for those deciding to take long positions due to the nearly oversold condition and the spring position of the market. Close monitoring of this area is advised since rotation back into this area would offer upside potential for the market. Should this rally fail, which at this point is likely, existing short positions could be added to or new short positions could be taken. This should only be done on the bulges in the stocks that are now demonstrating a strong SOW.

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