You will notice today that the planning charts do not have the Santa Claus Channel anymore. We have drifted out of the channel with the current battle here at the1150 top of SPX.
Checking out with the world:
Asia
China continues to slide while Japan moves in the opposite direction. China released a close to 11% GDP number yesterday which when added to the recent bank story of slowing down loans has triggered profit taking here as fear that the growth is unsustainable.
Europe
FTSE, CAC and DAX are all barely green up from their lows. There was a lot of economic numbers out overnight in Europe and they were all "just right". Not too hot, not too cold, no real surprises.
United States
Initial Jobless clams and Philly Manufacturing numbers will headline today. Because of MLK day on Monday the Nat Gas and Crude oil inventories will be both staggered release today. I guess we need the half hour to digest each report?
Futures as I sit are up 2.75 after having been back down to 1132 (down about 6 points at one time) area overnight.
Breadth Charts from Yesterday
40 DMA % Index
Another weak day today and we should have a second closing below the 20 DMA. This would trigger this chart as a sell-bearish. Yesterday's weakness sent all three indicators into the bear area fro the first time since November 26th. This chart scores a -6.
10 Day High - Low
The 10 day high - low chart also shows weakness. It scores a -6 today and the indicator is close to getting a zero crossing on the 5 DMA. This will be the first zero crossing also since the end of November. We had been cycle about every 10 to 17 days between positive and negative. This cycle has been almost 40 days.
52 Week new highs:
This chart also scores a -6. A positive opening today could reverse the bearish trend and will be worth watching in the room. NYSE needs 80 new highs in the first 30 minutes to move from bearish to neutral and about 100 in the first 30 minutes to turn the charts bullish.
Conclusion
The Charts have swung once again bearish with a perfect -18 score. The 40 DMA % Index would like a second day to confirm. There is still a lot of money and buyers out there who believe much higher for the markets so every dip will be seen as a reason to buy.
I posted this chart last night which is a simple line on close chart and clearly shows the choppy top or sideways we are currently having. I am sure the pattern has a real name like 3 peaks or something but for the lack of doing research I have called it an XYZ top. You can see that since July we have had 3 of these previously that led to a correction. We are on the Z leg now so we will see if this pattern repeats with a continual downside leg.
The charts are pretty simple today. The bulls need to drive up and over the 1150 area and start a breakout here and the bears need to push lower and below that 1131.50 SPX cash. Below 1131.50 I have marked a few support areas.
For you ESH10 traders:
Three simple lines to watch. 1135.85 is the pivot point and 1146.05 on the topside for a breakout up to 1155-1156 area. On the downside a breakdown below 1125.50 look for 1120 and then 1115.
Happy trading today. Hope to see you in the room or in the markets.
Marlin aka RedlionTrader
