posted 07.05 a.m. est
Pre-open comment Tuesday 24th December
Monday’s session generated a higher, narrower Value Area on low Volume. ES is in a strong price location as long as it holds above 1792.
Time: In light of the current Sentiment indications, see below, we should look at potential termination dates. Seasonally the market is strong into early January which is also (around 7th Jan) 91days from the October low – a typical move for SPX. The decade cycle also suggests the market may turn lower around this time. More in webcast later in the week.
1st Level Support = 1792.00 poc
2nd Level Support = 1758.50 poc
Stocks>50dyma numbers: Nyse 65% (from 61%), Nasdaq 70% (from 66%), R2000 72% (from 68%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 6.37. This is the highest in my database; the ratio has not been above 6 before. This indicator is registering extreme optimism which has historically been a warning for the market.
Supporting Charts
Bonds TLT: Last week the 10mn poc migrated down to 102.85. Chart closed above this level but price below this poc would be very weak location and suggest further weakness.
Gold GLD: Last week tested the June low and remains in a very weak price location.
Oil USO: Has printed a higher low above 34.13, (3yr poc). Strong price location.
Dollar Index: Printing back above 80.15, the maj poc in a stronger price location.
EURUSD: Holding a strong price location above 1.3564, the 1/2R off October high but Momentum (although positive) is down.
