Pre-open Tuesday 5th January
All highlighted previous comments on graphic are relevant.
First Level S/R was 1118 on Monday and remains there today. Monday day session opened just above that level and drove higher.
As discussed in this week’s webcast the SP500 index and the Nyse comp both broke above their BearMarket1/2 levels. If these charts can hold above these levels then price location is strong and higher prices should be expected despite the overheated sentiment.
The best short term sentiment indicators I follow are the Rydex Assets Ratio and the ISE (equity only) index.
Looks like the Rydex traders do not trust the break out. On a day when the market was sharply higher the Rydex Bull fund assets that I follow were down and Bear fund assets increased slightly which meant my version of the Rydex Assets Ratio was down from 2.76 to 2.43. This would be contrarian bullish short term but the ISE number came in high at 219 suggesting the option traders are bullish. Mixed signals.
