Pre-open comment Friday 3rd January
Tueday’s green-at-top high was not tested which is unusual and Thursday’s Value Area was printed lower than Tuesday’s low which negates any ST positive implications of Tuesday’s Buying imbalance. 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 and 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)
Stocks>50dyma numbers: Nyse 61% (from 71%), Nasdaq 70% (from 73%), R2000 66% (from 72%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was slightly higher at 6.01. Last week the ratio reacheds 6.65 which is the highest ratio in my database. This indicator is registering 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. On Tuesday chart hit its lowest level since Aug 2011.
Gold GLD: Tested the June low on Tuesday and remains in a very weak price location.
Oil USO: Sharply lower on Thursday the low being the Support at 34.13, the 3yr poc. Price below this level would put the chart back in a weak price location. Momentum (although positive) 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: Printed a two year high last week but close to an eighteen day low today. Momentum (although positive) is down.
