Pre-open comment Friday 9th December
Thursday’s session high came in 1256.25, just below First Level Resistance at 1257. Later in the day the 50day poc Support at 1244 was broken as Significant Selling was marked for the first time since the November low. Long Trades eliminated for me at least until Significant Selling is marked again.
This week’s Hi-Lo Range at 43.5 points is the lowest for 20 weeks which suggests range extension higher or lower. Odds favour the downside (red-at-bottom lows are usually tested) but in this market nothing can be assumed. Also ES currently “likes” the 50dy poc at 1244 – we may not see a directional move until the minor (17day) poc migrates; possibly to 1244.
If there is further weakness to end the week I think we could expect the daily breadth indicators to look negative. e.g. %Stocks>50dyma would most likely end the week below the 50% level.
First Level Resistance = 1257 (minpoc) SPY = 126.14
First Level S/R = ES 1244 (50dy poc) SPY = 125.44
Second Level Support = ES 1214.50 (1/2R off May high) SPY =122.30
Sentiment: My version of the Rydex Assets Ratio was higher at 2.4 )from 2.0).
Supporting Charts (+ or – or ? for equities). (Momentum = PriceOsc)
? EURUSD: Still in a weak position below the 1.3635 poc and today below the 1/2R off June 2010 low. But, Momentum has been up for ten days.
? Dollar Index: Still in a strong position above the 77.05 poc but Momentum has been down for ten days.
? TLT: currently holding above the 116.34 poc. Momentum has been down for ten days.
Bias for equities based on these Supporting Charts is unclear imo, but this could clear today if Dollar shows strength – i.e. Momentum could turn.
