US Indices on Monday's close: SPX: (+0.18%), IXIC: (+0.74%), Dow: (+0.14%) and RUT: (-0.34%)
ESZ8 players came into Monday's session mostly short, and if they had persisted beyond the spontaneous short covering at the open of 2630.75, they were rewarded with a fairly rapid drop to the lows of 2583. After messing around at about -0.75% below the 29 Oct lows, ES had a bounce to within an overnight congestion area around 2627 and proceeded to make a daily high of 2648.75. Value area was 2606 to 2644 and the point of control (volume) was 2637.25. The RTH close was 2643.25. In the current overnight session, participants are again positioned mostly short. That is often viewed with healthy suspicion because of the more speculative low volume nature of the overnight session. The year to date break even for SPX and ES is around 2668. Bulls would need to get up and over that area with gusto to scare the bears much. ES futures profile.
The NDX/IXIC/NQ helped keep the market from testing the year to date lows today, and Treasury futures were essentially flat throughout the cash session. Treasury futures bulls would like to see that parabolic looking rise balance out in a sideways fashion. A/D lines -1038 and NYSE breath at -2.83:1 had an abysmal dip intraday to around -9:1 while NASD breadth at +1.16:1 was around neutral for most of the session. There was a moderately positive balance to NYSE MOC: +254M.
The bears are very bearish. Some short term traders who like to dabble in predictions outside their familiar time frames are calling for much lower prices in the near term. They are not always very specific with regard to time frames, though, which is understandable. Bears of the short and medium-term persuasion do have a point; all moving averages are pointing downward and the longer ones like the 50 would be difficult to get turned around, as you can see by last week's short lived attempt at doing so. The weekly candles have looked egregious, the NDX is in the middle of a down trending channel and the R2K is...I can't even look at it. In short, every bounce will be continued to be viewed with suspicion by practical souls who make their living swing trading technicals.
To be fair, the dignified bears will tell you it's a stair-step thing and the subdued VIX certainly backs that up. So now there are arguments over whether they would like to visit the 2550/2530 area and/or just stink things up real good and slobber all over the 2400 area. Meta-analyzing the collective mindset is very difficult and the market momentum is clearly down; but gee, consensus about the bigger picture as it pertains to this year's levels is worrisome sometimes... especially when it's all nicely fitted together and the deal is signed by so many unofficially recognized parties. Every one of them is salivating for that big volatility spike. Hmmmm. Our little opinions won't affect anyone's party, but shorting the hole outside of intraday trades can be nerve-racking when market dependent forces might be scheming - not that you'd imagine there is much left to scheme about. The intraday mavens, though, are having a blast.
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