Pre-open comment Thursday 5th December
Wednesday generated an “outside” Value Area on increased Volume. The most recent Significant activity was the Aggressive Selling on Monday so Buyers would need to marked again before I will consider new longs on any timeframe. Sentiment is a concern, see below.
Dayframe: The minor (20day) poc migrated to 1792 and this level gives ST traders a local reference level.
First Level S/R = 1792.00 (20dy poc)
First Level LT Support = 1758.50 poc
Stocks>50dyma numbers: Nyse 57% (from 59%), Nasdaq 59% (from 61%), R2000 60% (from 63%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 5.64 which is equal to the ratio on 3rd April 2012 and is the highest in my database. This indicator is registering extreme optimism which has historically been a warning for the market.
Supporting Charts
Bonds TLT: Yesterday probed down again towards the August low. Remain in a weak price location below 106.31, the 8mn poc.
Gold GLD: Up on Wednesaday but still in a very weak price location.
Oil USO: Back in a stronger price location back above 34.13, (3yr poc).
Dollar Index: The last four weeks have been spent consolidating in a stronger price location back above the important level at 80.15.
EURUSD: Strong LT price location above 1.3416 (1/2R off 2010 low). ST price location is stronger if chart can hold above 1.3564, (minor 1/2R off October high).
