Commentary: Paul Ebeling on Wall Street, Near Term

$DIA, $SPY, $QQQ, $RUTX, $VXX,

The US stock market was primed to rebound, it rebounded.

Earnings are just ahead and if stocks continue to the Northside as they have on this bounce then the lowered estimates might not be a plus.

So, for now savvy players will be playing the bounce, because the selloff was rejected, and giving a Northside move.

Some are saying Fed Chairman Powell may have changed the market’s character for now. That is something the Fed can do. Thursday Chairman Powell will speak again, and 8 other Key Fed officials will speak publicly this week too. Ears open for clues.

The market recently broke down from a long Topping pattern. This action is the test of the 1st break South. See this recent correction as enough to consolidate the entire move from early Y 2016 lows. But, there may come more selling to consolidate that huge move. 

That is nothing to complain about because we always take what the market gives, Yes?

Some Key players are saying that the Fed will signal and reverse policy, i.e. cut rates, stop sopping up the liquidity and perhaps add QE to turn things around.

My sources say that President Trump want’s a meeting this week with Chairman Powell and that it will happen. Like it or not Mr. Powell knows that President Trump is the Boss.

We are calling for no interest rate cuts this year, and the Fed will cut rates sooner rather than later. 

We will see soon enough, so again for now we are playing the bounce.

And remember, it is your money, so your responsibility.

The Bulls Vs The Bears

Sentiment Indicators

VIX: 21.38; -4.07 
VXN: 28.57; -3.61 
VXO: 24.38; -3.88 

Put/Call Ratio (PCR) CBOE: 0.91; -0.40 

The Bulls Vs The Bears

Last week the Bulls and Bears crossed-over now indicating a bottom in stocks sooner of later. This indicator is a longer term indicator. So, it suggests more than a bounce. So, will look for good patterns to support the bounce, that can happen over time. It was a very impressive move. 

The Bulls are at: 29.9 Vs 39.3 last

The Bears are at: 34.6 Vs 21.4 last

Support and Resistance

HeffX-LTN’s Support and Resistance indicators for the week ended 4 January 2019 are:

Date Sym Price Technical Analysis Support Resistance
4 January QQQ 156.23 Bearish (-0.32) 154.24 – 157.72
4 January DIA 234.28 Bearish (-0.36) 232.18 – 235.11
4 January SPY 252.39 Bearish (-0.36) 250.12 – 254.00

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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