Note: I have shown the ES Dec contract through Friday. In Tuesday’s pre-open I will switch to the ES Mar contract.
Sellers were active again on Friday and generated a lower Value Area which means (unlike Buyers last week) their activity was Effective. See previous highlighted comments. I marked Significant Selling (red) three times last week and no Significant Buying. In Friday’s pre-open I mentioned the distribution that began in October and said I was “interested to see “how Buyers react if the VAL of that distribution at 2025 is tested”. Friday’s VA was generated below that level and pre-open ES has been printing close to Friday’s low. Breadth deteriorated again, see below.
Two Key Charts/Levels to watch this week:
IWM: 1/2R (off Sep low) Resistance at 113.53.
SPY: 1/2R (off this year’s high) Support at 198.10.
Resistance 2087.00 (5mn poc) to 2094.00 (maj poc)
First Level Support on Mar Contract= 1965.25 (1/R off this year’s high)
Market Charts: All major Market Charts are now negative.
Stocks>50dyma numbers: Nyse 21%, Nasdaq 32%, R2000 26%, UK 34%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 8.21. On 12/01 the ratio reached 9.00 which was a 70day high.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: closed the week above 106.60 (18mn poc). The next level of Resistance is 107.19 (1/2R off this year’s high). Price above that level would be strong price location.
Dollar Index: earlier in the month probed above the March high but this was rejeceted. Momentum is negative and down.
Gold GLD: cash Gold recently printed a new five year low. Very weak price location.
Oil: recently broke to a six year low and futures have printed a new low today. Looks set to test the 2008 low.
EURUSD: rallied since 12/03 following the ECB announcement and is currently printing close to the high of this move. First Level Resistance at 1.1080, 1/2R off March low.
