Good morning, a fresh new rally for the dollar to new highs today has sent our overnight futures down, oil down and the dollar up.
Here is how the markets around the world are looking:
Asia
Happy new year to our Chinese friends. We hope they enjoy their weeklong celebration. The United States should do something like this to spur spending. The Hang Seng will be shut down now for a week so we only have the Nikkei to report on next week. Japan in response has closed strong and China has closed slightly in the red after a positive week.
Europe
Europe printed a slightly worse than expected GDP quarter over quarter number last night. Their markets are mixed with Germany showing green this morning.
United States
Economic news
Earnings
Breadth Charts
40 DMA % Index
Nice to see us picking up off the bottom here and heading back up to the 20 DMA. The chart scores a 0 today still with the direction being bullish on the Index but still under the 20 DMA.
10 Day High - Low
It is a perfect +6 for these charts today, all three sisters putting in both a higher day and sending the 5 DMA into the positive direction. All three (NYSE, NAZ, RUT) put in positive days something the RUT and NAZ have not done for 18 trading days.
52 Week New Highs
Like our 10 day high - low the 52 Week new highs put in a +6 from yesterday also. Look at the RUT now 5 days of green bars. Watch the RUT for weakness and the the NYSE for strength today.
Conclusion
| Chart | Score |
| 40 DMA % Index | 0 |
| 10 Day High - Low | +6 |
| 52 Week New Highs | +6 |
| Total | +12 |
The charts have started showing some breadth strength today. With today's gap developing I would expect it to be bought up and the markets to close higher, perhaps ignoring the strong dollar or sending the strong dollar lower today. The 40 DMA % Index is a slower chart to turn and adds confirmation to the the signals showing on the other charts.
$SPX
The bulls held off the head and shoulders failure from yesterday and bellied up to our 1080 bar unable to get enough strength to get up and over. I still think a rally up to 1085 is in the cards before we might head down. This morning's gap down opening will reveal a lot about this market and its underlying strength as the bears have a head start this am.
Bulls Game Plan: Close the gap quickly back to the highs. If they do go down at the opening defend the 1070 area until the dollar selling is over and then rally up and over the 1080 area.
Bears Game Plan: Take advantage of the Bulls, let them try to close the gap and then pounce breaking through first the 1070 area and eventually fail that 1060 area.
Today I will root for the bulls.
Marlin
