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	4/26/2004 4:57:16 PM
From: coferspeculator	of 14340

Today, the market experienced an intra-day failure to the upside and went on to a poorer close in the bottom third of a wider spread on lower volume ending the day in a neutral condition. The intra-day failure was the result of a lack of demand. Taking a quick glance at the day there is a tendency to dismiss the actions as not important. A closer look seems necessary as the character and timing of the actions may be important. When demand had the opportunity to make the attempt to progress through the short term supply line off the April high and attempt to weaken the supply line off this years highs, it was a no show. These obstacles, as well as the resistance highs of April and the brief intra-day overbought condition of the market added up to a somewhat disappointing day for those bulls hoping that demand would continue its effort to push to new highs. On the other hand, the bears have to wonder what might have occurred had supply entered the market. For the bulls a successful test of the lows of April would provide for the opportunity for enough cause to be built up to allow for the testing of the highs of the year. As mentioned over the weekend, its important that the the test of the recent lows come with decreasing spreads and lower volume. A test of the recent lows would provide a more objective determination of how much supply is still available. This is important since only last week supply was in control of the market. While it is premature to call todays intra-day high the potential end of the rally off the April lows it is important to note that when it did occur, intra-day, the market was in an overbought condition. Having entered an overbought condition at a lower high then was the case in March, this is the second time that the market has become overbought at lower peaks. This assumes that today's high holds and the market tests the lows of the month. It's important to note that the intra-day oversold condition was brief but it shouldn't be totally ignored. Should this be the case we would have two conflicting indications. We'd have a market that has become overbought at a lower level on its last rally and a market that has become oversold at a higher level on its last reaction. There a several scenarios that could play out if this is the case and we'll be keeping an eye on them.

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