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 wrote (159)	7/1/2004 5:04:15 PM
From: coferspeculator	Read Replies (1) of 14340

Today the market traded lower with an increased spread on sustained volume, ending the day in the bottom third of it's spread in an oversold condition. Today's action was the result of sustained supply entering the market which was met by demand during the afternoon. For nearly three weeks there has been increasing pressure to the downside that has been absorbed by the market. The action of the previous two days suggested that demand might offer the opportunity to take out the recent highs. Today's action suggests otherwise. Today's wide spread to the downside finds the market positioned at several interesting and important points. First, the market bounced off the former intermediate supply line. Second, it penetrated the short term support line but finished back in the short term trading range that has existed for several weeks. While the spread and volume indicates weakness, the meeting of demand finds the markets finish suggesting a potential #2 spring. Additionally, the market finds itself near the short term demand line off the May lows. Add to this that the market is in an oversold condition. First, it's important to recognize what the trend and position of the market is at this point. From the short term perspective, the market is near the short term demand line off the lows in May. It is also at the support line framing the recent trading range that has existed during most of June. This position and the oversold condition of the market is good for potential short term speculators. From a longer term perspective, the market is nearly dead center between the highs and lows of the year. This is not a good position for taking a position. With two conflicting situations the actions that the speculator takes will depend on their trading style. Short term speculators are potentially positioned for a long position but the pressure to the downside suggests waiting. The impact of today's action indicates that there is a possibility that the demand and support areas could be penetrated to the downside. With that potential it would be best to wait. If demand meets supply and the pressure to the downside subsides, then an entry is merited. A test of today's lows in the coming weeks on reduced volume and spread would be interesting. Longer term or intermediate term speculators don't really have a good position for making new speculations at this moment. Those intermediate term speculators that took positions off the lows in May need to keep an eye on how the mid-point position is resolved. If the market offers evidence that it is going to re-test the lows, then exiting current positions or at least a portion of them is worth considering. If the market starts to move back up then any stocks in which positions are already in place might be added to if the stocks are positioned correctly.

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