It's Brainteaser Month.........
--------------------------------------------------------------------------------------------------------------------------------------------------------------------- Good Morning and Welcome to the XJO January Thread
--------------------------------------------------------------------------------------------------------------------------------------------------------------------- I debated the pro's and con's of putting together a series of weekly threads or just a monthly thread while I am away, and decided that a simple single monthly thread is easier for everyone (and it works well for the XSO, XEC & XMD forums, so there is no reason it won't work well here as well). I will be back during the last week of January, and all things being equal, I will start daily threads again for February.
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The XJO closed lower on Friday, where spread narrowed, volume reduced again, and the close was at the day's low.
The Index turned down soon after the open, and pretty much ground slowly lower throughout the (shortened) day.
Similar to what happened just prior to the Christmas break, it appears some traders did not want to hold positions over the New Year's break, and either reduced or flattened their holdings until after the holiday period is complete.
The Index has made decent gains recently, and shorter term traders in particular couldn't help but consider price to be a little stretched in the near term. That said, the overall trend remains up, and there is ongoing strength in the background of the chart.
This strength will not 'just go away', it will continue to exert its influence on future trading until there is some sort of serious supply event strong enough to change the direction.
Finally it should be noted that - last year, the Christmas rally was pretty much counter trend, where the Index had some serious weakness in the background of the chart (both behind and above the current price at the time), and only had a brief surge higher quite late in December (which was mostly wiped out early in January, as trading resumed and the overall trend continued again).
This year is quite different, the Index has potential strength behind the current price (the Trump shakeout in particular, and ongoing supportive actions in both late November, and in mid December). So while it would not surprise if the Index came back a little early in the new year to test for supply (down to ~5600). However, unless or until there is a serious supply event of some form, or price actually breaks down and the overall trend changes, the expectation is for the 'sideways to up' bias to continue........until something happens to change the influence currently affecting the chart.
Good Trading and Investing See ya back in February (I might be in internet contact from time to time while I am away, and may post if something of interest occurs)
(20min delay)