Commentary: Paul Ebeling on Wall Street


The US major stock market will start this week again testing the bottom of the range formed with by the selling that began in October.

The S&P 500 cracked 2600 and supposedly that sets up more Southside action.

Sentiment is extreme as reported by the AAIA, outflows from stocks are at a record.

So, from the action in here, we have to look for a Key reversal.

Leadership remains weak, so any reversal expectations would be for a rebound within the range. 

Many participants are not willing play a rally.

Understandable given the selling, and more likely to come even if the Fed backs off Wednesday, almost everyone assumes a fed funds rate hike in here.

When you feel hammered that is just the time to consider playing some upside if stocks in quality patterns make solid moves. 

There are lots of stocks in position to move North if the sentiment drives a rally. If not, then play some Southside patterns.

Wednesday, people see at FOMC rate hike day, if one does not come it is said that would be a shock but maybe not. Friday is options expiration, and the Wednesday FOMC meeting and subsequent statement will be Fed Chairman Powell’s most important as backs away from his hawkish stance.

We wait, and we will see. 

Remember, always take what the market gives.

The Bulls Vs The Bears

Sentiment Indicators

VIX: 21.63; +0.98 
VXN: 27.62; +1.82 
VXO: 23.95; +1.43 

Put/Call Ratio (PCR) CBOE: 1.14; -0.02 

The Bulls Vs The Bears

The Bulls faded a bit after that surge the prior week from 38.3.

The Bears faded too after finally breaking over 20, and held 20. The Bears are still very low in here.

The Bulls are at: 45.5 Vs 46.7 last

The Bears are at: 20.4 Vs 21.5 last 

Support and Resistancs

HeffX-LTN’s US Major Stock Market Indexes Technical Analysis for the Week Ended 14 December 2018

Date             Symbol Price        Technical Analysis         Support & Resistance
14  December QQQ   161.08         Bearish (-0.38)                158.37 – 162.80
14 December DIA     241.42         Neutral (-0.24)                242.81 – 244.44
14 December SPY     260.47        Bearish (-0.30)                      NIL – 264.81

Have a terrific week.

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