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The support and resistance levels for the Major Indices noted in my post on January 10th still apply.
In that post, I also made reference to a 10-Day 30-Minute chartgrid of the YM, ES, NQ & TF and said that any repeated attempts to advance convincingly beyond the highs of the first week in January would need to be accompanied by higher volumes. The horizontal white line on the updated chartgrid below represents that week's high. We can see that:
+ the YM has struggled to stay above that level on building volumes, and today's advance took place in overnight trading on very low volumes…price fell back to the range high which is near-term support
+ the ES has managed to stay above this range high, for the most part, on building volumes, and today's advance also took place in overnight trading on very low volumes…price is trading just above the 200 sma (pink) and last week's Volume Profile POC (yellow horizontal line) on this timeframe
+ the NQ has also managed to stay above this range high, for the most part, on building volumes, and today's advance also took place in overnight trading on very low volumes…price is trading just below its 50 sma (red)
+ the TF has also managed to stay above this range high, for the most part, on building volumes, and today's advance also took place in overnight trading on very low volumes…price is trading below both moving averages, just above last week's Volume Profile POC, and just above the 10-day Volume Profile POC (red horizontal line) at the right edge of the chart
Numerous downgrades, more European woes, news of inevitable Greek default, financial sector struggles among other bearish news led to a lower, oops, higher open today? Yes, higher.
It has indeed been rather frustrating as a short-term bear since the gap open on 1/3. But, oftentimes when you are a contrarian and you make your livelihood on fading short to intermediate-term market extremes you often get into positions early. Any professional with any cred will tell you the same. It is to be expected. However, we are now nearing the area of max pain. While I thought we would see an immediate push lower after the first week of the year, I was willing to accept a push up to 1300 on the S&P or roughly $130.00 in SPY. We hit that level today and after the bulls pushed and pushed they failed miserably by the end of the day.
Squeeze … as I have mentioned in the past, squeezes are better if you can push the market lower first. Was Friday's gap lower that move? Was it big enough to really set-up a strong enough squeeze, or is this move going to fizzle out quickly?
I recently saw this posted by a friend; as an avid student of U.S. History myself, it had particular interest for me:
In 1825, the year before his death, Thomas Jefferson — the 3rd U.S. President and a Founding Father of the United States of America — was asked by a father to supply some words of wisdom to his young son, Thomas Jefferson Smith, who had recently been named after him. Jefferson graciously responded with a handwritten letter, at the end of which was the following 10-point list of advice for the youngster, titled, "A Decalogue of Canons for observation in practical life."
A Decalogue of Canons for observation in practical life.
1. Never put off till tomorrow what you can do to-day. 2. Never trouble another for what you can do yourself. 3. Never spend your money before you have it. 4. Never buy what you do not want, because it is cheap; it will be dear to you. 5. Pride costs us more than hunger, thirst and cold. 6. We never repent of having eaten too little. 7. Nothing is troublesome that we do willingly. 8. How much pain have cost us the evils which have never happened. 9. Take things always by their smooth handle. 10. When angry, count ten, before you speak; if very angry, an hundred.