S&P 500 emini pre-open Tuesday 2nd December

posted 08.50 a.m. est

ES gapped lower on Monday. There was no obvious Reaction from the Buyers and no Significant Selling was marked. The session Value Area was generated just above 2050 with most time spent printing 1953. This is most likely Buyers resting looking to discover if Sellers can make an Effective mark following the recent red-at-top Reaction which stalled the rally on 11/21. Once again we can assume that if Sellers are not marked soon Buyers will step back in.

First sign of LT weakness would be price printing below 2035.00. Negatives are divergences between price and daily breadth indicators and the extreme bulls seen in the Sentiment data, below.

ES First Level S/R = 2035.00 (2mn poc)
ES Second Level Support = 1962.00 (6mn poc)

Breadth: CP Market Timing System turned neutral for Nyse, stayed positive for Nasdaq, stayed neutral for R2000 and stayed positive for UK.
Stocks>50dyma numbers: Nyse 65% (from 70%), Nasdaq 55% (from 63%), R2000 60% (from 67%). Numbers >50 are supportive.

Sentiment: My version of the Rydex Assets Ratio was higher at 13.73. which is the highest in the database. Historically this has been a warning for the market. Bear fund assets that I follwo are now extremely close to the low set back in January this year.

Supporting Charts:
Bonds TLT: chart remains in a strong price location above 117.14 (maj poc) reaching a 30day high last Friday.
Dollar Index: printed a four year high on Monday remains close to that level.
Gold GLD: Still in a weak price location below the 119.87 maj poc.
Oil USO: on Monday printed its lowest level since March 2009.
EURUSD: printing close to the two year low set earlier in the month. There is Support at 1.2300