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Strategies & Market Trends : Timing the Trade the Wyckoff Way
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To: coferspeculator who started this subject4/23/2004 4:47:46 PM
From: coferspeculator   of 14340
 
Today the market experienced an intra-day failure to the downside and closed near its highs on a narrower spread with lower volume ending the day in a nearly overbought condition. The intra-day failure was a result of the meeting of supply by demand.

The ability of demand to meet supply was a positive action by the market. While the narrowing of the spread indicates that supply is still significant, the close near the highs is positive.

There are several obstacles that need to be overcome for the bulls to keep this move going. First, the short term supply line that exists from Aprils highs as well as the resistance at that level needs to be overcome. Secondly, the intermediate supply line that exists from the highs earlier this year will offer resistance. The nearly overbought condition of the market needs to be watched since the move into an overbought condition will make substantial upside progress very difficult. Demand will need to be seen with increasing spreads on higher volume to overcome these obstacles.

If these obstacles can be overcome in the coming week then a test of the highs of the year is possible. If supply continues to be present then a test of the lows of Tuesday and Wednesday is likely. A successful test of this level with decreased spread on lower volume would set the stage for a test of the years highs.

Increasing spreads and higher volume to the downside from this level would set the stage for a failure of this weeks lows and provide strong evidence that a test of the lows for this year would be likely.
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