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	5/15/2004 7:50:47 AM
From: coferspeculator	Read Replies (1) of 14340

The Market and What To Do Now Today the market traded lower in the morning to the downside as supply entered the market but was met by demand. It ended near the previous days close as demand was withdrawn after a rally during the day with an increased spread on lower volume and ended the day in a NEUTRAL position. This has been an important week but one in which no conclusion can be drawn. Several positive events took place but are offset by several negatives. On the plus side (for the bulls) the market has tested its years lows and entered a spring condition. While the spring hasn't progressed as hoped for, the volume that occurred during the spring indicates that a test on lower volume is likely. The low volume in the past several days provides hope that this test will occur in the next few days which would help to substantiate the spring position. Pressure that has been on the market from the supply side has diminished. The inability of supply to break the resistance (ice)level has allowed the trading range to remain in place. Cause is being built up that could provide the necessary element for a move back up through the trading range. There is a positive divergence that is being built up between price and volume actions. On the negative side (the bears) there is not any reason to believe that the possible SOW that took place during this past short term down move is going to be proven false. There has been no rally of any consequence. The spring has made no progress and the move over the past few days is lateral at best. The market having entered an nearly oversold condition has made no progress to the mid-point of the short term trading range. It hasn't been able to penetrate the oversold line off the trading channel established from the LPSY in early April. There is a larger count for lower targets (a second phase) that is likely to be achieved if the ice is broken. What to do? Wyckoff recommends that when in doubt stay out. OK, what happens if the spring occurs? You might consider going with it, as long as the market is not overbought, buying the stocks that have been identified as the best ones and look to close all short term short positions that haven't already been closed. This will be a short term trade so make sure you are getting 3-1 and your stops can be placed so that losses (exits) fit your position sizing goals. OK, what if the ice is broken? Aggressive traders might consider going short assuming they can get in intra-day as long as they have been identified the best stocks for that purpose. Those holding short positions for the intermediate term probably should SMILE and hold their positions. Those that are long should consider getting out or taking defensive positions on their long positions. All others looking to establish short positions might consider waiting for the rally back to the ice to judge the character of its action. It just might be a terminal shakeout. The time to plan the trade is now so it's a good idea to be prepared beforehand.

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