posted 09.15 a.m. est
Pre-open comment Monday 6th January
SPY closed on Friday below the Mon-Fri Hi-Lo range indicating Sellers Active. The weekly bar was overlapping/higher so this is Ineffective Selling on this timeframe.
Stock Index ETFs: Momentum for SPY, IWM and DIA is positive and up. QQQ is positive but turned down on Friday.
ES analysis: Last week I marked Significant Buying once and no Significant Selling. Support is at the 4mn poc at 1803.50 and as long as ES holds above that level it is in a strong price location. There is minor Resistance at 1835.50, the 20dy poc but if ES prints time back above that level the distribution pattern would suggest a target of 1865.
First Level Resistance = 1835.50 (20dy poc)
First Level Support = 1803.50 (4mn poc)
Breadth: The CP Market Timing system remained positive for Nyse, Nasdaq and R2000 and remained neutral for UK.
Stocks>50dyma numbers: Nyse 64%, Nasdaq 72%, R2000 70%, UK 74%. Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 4.77, down sharply from Thursday’s ratio at 6.09. The ratio reached 6.65 the previous week which is the highest ratio in my database and registered extreme optimism which has historically been a warning for the market.
Supporting Charts
Bonds TLT: The 10mn poc recently migrated down to 102.85. Chart currently prints below this poc which is very weak price location. Last week the chart hit its lowest level since Aug 2011.
Gold GLD: Tested the June low early last week and has rallied from there but remains in a very weak price location.
Oil USO: Sharply lower last week breaking back below 34.13 (3yr poc) which puts it in a weak price location. Momentum is down.
Dollar Index: For three months has been oscillating around 80.15, the maj poc. Looking for a clear higher low above, or lower high below this level.
EURUSD: Recently broke out to a two year high but this was rejected and chart printed a 19day low on FFriday. Momentum is negative and down.
