Back from Bangor-Maine where I spend some great quality family time with my extended set of relatives and my mom. It was fantastic to get together. They are a hardy lot that live in the north country.
Now back to work.
The week closed mixed with the DOW down -1.36% and the Russell closing up 1.67%, the small caps showing relative strength is a good sign.
A look at the Charts:
The 10 Day High-Low chart has again swung to neutral from the previous days bearish state. The markets are getting very difficult to predict. Instead on nice swings of momentum change the charts are looking like they are in fibulation and need a break-out one way or another to get some type of rhythm back in the price action. Somebody bring out the paddles or call the market dead..
The 40 DMA % Index chart still is making a positive climb showing underlying strength in a broad base still exits. It scores a +6 today from yesterday's neutral scoring.
The 52 Week new highs recovered from the Thursday selloff with the Nasdaq composite and the Russell 2000 able to turn a one day bearish signal back to bullish. The NYSE did not have enough strength to do so. Monday's open will have to be quite strong to keep the momentum going and to get the NYSE join the stronger indices.
Watch for an opening 30 minute new high of around 200. Anything less will indicate a high probability that the NYSE 52 Week new high will stay bearish into the close. Above 200 tells us that the bulls have regained the momentum. Any sell offs in that case should be bought.
Overall the three charts score a +10 which is on the bullish side but they are swinging everyday here between bullish and bearish. I would like to see it put together a streak in here.
The week will bring lighter volume as the markets wind down for a Christmas weekend. Short term scalp and swing while we wait for the markets to decide on a definitive direction from what is turning into a two month consolidation.
News Next Week:
Looking ahead at economic news for the week. At midnight Sunday the Bank of Japan issues its monthly report and news positive or negative could impact the dollar overnight. The bulls need China, Japan and Eurozone to set the markets on the right course for Monday's open.
US news over the week starts on Tuesday with the revised GDP numbers for the 4th quarter. Expectations are that we will stick with the 2.8% number that was recently revised down from 3.2%. Also on Tuesday at 10am EST the Existing Home Sales Numbers are released. These should have a direct intraday effect on the market. At the same time the Richmond Manufacturing Index will be released and there is a high expectation of a +4 on the reading but recently these numbers have been disappointing. That is something to watch.
Moving to Wednesday at 8:30 am we get core PCE price Index, personal spending and income. At 9:55 am the Michigan Consumer Sentiment Index and at 10am New Home sales will be released. The Crude inventories are out at 10:30 am on the same day.
Christmas Eve the news continues at 8:30 am with Durable Goods and initial jobless claims at 8:30 and the Natural Gas Storage numbers at 10:30 am.
