posted 05.52 a.m. est
Pre-open comment Thursday 9th January
In the last six days we have had an Aggressive Buying imbalance and a Responsive Selling imbalance, both of which did not see follow-on Buying/Selling. This usually indicates a poc of some importance (i.e. currently most important) is emerging somewhere in the current range of activity. I note that yesterday the 25day poc migrated down slightly to 1832 which is the exact 1/2R off December’s high, i.e. middle of recent activity. This is therefore an important level to monitor. Four hours pre-open ES is printing above this level which puts it in a strong price location. Only Significant Selling marked below 1803.50 (4mn poc) would be a concern in the LT
First Level S/R = 1832.00 (25dy poc)
First Level Support = 1803.50 (4mn poc)
Stocks>50dyma numbers: Nyse 61% (from 64%), Nasdaq 72% (from 74%), R2000 67% (from 70%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was slightly higher again at 5.41. The ratio reached 6.65 on 12/27 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: This week chart has probed up into 102.85, the 10mn poc but has not yet overcome that Resistance. If time were to be printed above that poc it would put the chart in a much stronger price location.
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 negative and 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. Printed a 29day high on Wednesday above 80.15.
EURUSD: Recently broke out to a two year high but this was rejected and chart printed a 22day low on Wednesday. Momentum is negative and down. Support a little lower at 1.3524, the 8mn poc
