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Strategies & Market Trends : Timing the Trade the Wyckoff Way
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To: coferspeculator who wrote (132)6/14/2004 5:03:24 PM
From: coferspeculator  Read Replies (1) of 14340
 
Today the market traded down on sustained volume and closed in the lower third of of a wider spread in a NEUTRAL position. For the second day in the last three supply, while limited, has controlled the market. The withdrawal of demand and the limited response offers little clue as to what the action in the coming days offers.

What is important is that the recent high occurred at a lower high when the market entered an overbought situation. The last time that the market approached a similar overbought condition was during the weeks of April 5th and April 23. We now have four periods starting with early February in which the market has entered an overbought condition and the respective highs for the market are trending down.

While this is not a positive situation it is offset to some degree by the degree of downside pressure that has been occurring at these points. If pressure to the downside increases in the coming days, then the possibility of a re-test of the lows of last month is much greater.

At this moment the lack of pressure and the lack of potential for such a move offers support to the idea that this will only be a reaction but close attention needs to be paid for those still holding long positions.

For those that took short positions when the market entered the overbought area several days ago, similar attention needs to be made. If this is only a reaction then exiting positions is in order.
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