posted 07.42 a.m. est
pre-open comment Monday 31st December
On Friday I marked Responsive (red-at-top) and Aggressive (red-at-bottom) Selling. This was not Effective Selling as the session generated an “inside Value Area”. Never-the-less the sharp sell-off to the Close emphasises the fragility in the market. With ES printing below its major poc (1406) the market is subject to further weakness. A news driven market. Emphasis should be on price location and this has weakened (see below). SPY Closed below Mon-Wed Hi-Lo Range which indicates Sellers Active (and effective) on the weekly timeframe. Breadth deteriorated. New long trades have been eliminated for me since Open on 20th December and only Buyers marked above ES 1406 would have me considering the long side at current levels.
First Level Resistance = 1406 (maj poc)
Difficult to find reliable Support around current levels. The six month VAL comes in at ES 1375 with the 12 month VAL much lower.
Breadth: Chartprofit Market Timing System turned neutral for Nyse (from positive); turned negative for Nasdaq (from positive) and remained positive for UK. %Stocks>50dyma numbers: Nyse 59% and Nasdaq 53%. UK 77%. US numbers fell but held above 50%. Numbers >50 are supportive.
Price location: Weaker. Of the four major stock index ETFs only IWM finished the week in a strong price location highlighting its current “relative” strength. Last week’s decline brings the 1/2R off November low into play for SPY and DIA (see eBook). QQQ is relatively the weakest.
Sentiment: My version of the Rydex Assets Ratio ended the week at 3.55. This is not a useful number at the moment. See eBook for more.
Supporting Charts (+ or – or ? for equities). Momentum = daily PriceOsc
+ EURUSD: Currently printing above 1.3117, the 24mn poc which is strong price location.
? Dollar Index: Two hours pre-open the Dollar Index was printing at 79.80, the 2year poc 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: Closed last week above 122.62 (1/2R of September low) but still in LT weak position below the 9mn poc at 125.50
imo these charts are mixed but have a slight positive bias for equities.
