posted 8.53 a.m. est
pre-open comment Friday 28th December
On Thursday ES tested the 1/2R Support (basis March contract) at 1397. There was a sharp rally late in the day to test 1413 (3mn poc) but pre-open today ES prints below the maj poc at 1406. This is very much a news driven market and the market could be volatile over the next few sessions. Emphasis should be on price location and this has weakened (see below).
First Level Resistance = 1413 (3mn poc).
Potential Support/Resistance today = 1406 (maj poc)
First Level Support = 1397 (1/2R basis March and prev poc)
Breadth: %Stocks>50dyma numbers: Nyse 64% and Nasdaq 57%. Numbers >50 are supportive.
Price location: major equity ETF 1/2R levels: SPY 141.40; IWM 81.55; DIA 130.45. Pre-open today weakness is indicated. SPY and DIA print below their 1/2R. IWM is printing above its level and QQQ is printing below its Key level which is 64.84 (15mn poc).
Sentiment: My version of the Rydex Assets Ratio was lower at 3.42 (from 3.56). Last week saw a 30 day high for the ratio at 3.80. This week’s NAAIM number (a measurement of average current equity exposure among active money managers) spiked higher to 88.1 which is the highest since 2007. This is a contrarian indicator and this reading is therefore a warning signal.
Supporting Charts (+ or – or ? for equities). Momentum = daily PriceOsc
+ EURUSD: Last week printed its highest level since April. Currently printing above 1.3117, the 24mn poc which is strong price location.
? Dollar Index: The 2year poc migrated to 79.80. Chart currently prints at that level but below the 80.15 major level. Price above 80.15 would be much stronger price location and imo a clear negative for equities.
? TLT: Hit a 40day low last week. Off that low and currently printing back above 122.62 (1/2R of September low).
imo these charts are mixed but have a slight positive bias for equities.
