Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street


DJIA at 18570.85 spent last week in pause within 18450-600, and may hit fresh new this week. Especially if there are a few encouraging words from the Fed to drive it to the resistance of 18900-19000 by the end of the week.

As of last week Friday YTD readings

  • Russell 2000 +6.8% YTD
  • DJIA +6.6% YTD
  • S&P 500 +6.4 YTD
  • NAS Comp +1.9%

Wall Street earnings season is in full bloom. Should the market continue North in here perhaps it is prudent to bank some of the gains fro the last 2 weeks’ run.

Once the reports are out and the stock has moved then the technicals come into play Vs the reactions to earnings and guidance.

Wall Street’s bigger picture

The indices that ran North off of the June Brexit low are overbought, but are consolidating the move without selling off, making lateral moves. The lateral moves are the best Northside indication now. Meaning, those that bought the stocks are not ready to sell.

Overall the volume has be light and the breadth showing a negative bias. Last Thursday did show some higher volume selling, but one such session does not indicate a major selloff ahead.

We could see some testing like we saw last week, but when the consolation is lateral, that puts stocks in position to move to the Northside using the earnings and guidance as the catalyst.

This week Wall Street focus will be on the 26-27 July FOMC meet, do not expect any monetary change in position. If there is a surprise all will suffer, as no one is forecasting it, including me. There is little chance of a Fed rate hike yet this year.

Central bank monetary policy has been a market distortion and I suspect Albert Einstein would agree that one fine day it will act as a force of gravity on stock and bond prices, either because of the attempt to unwind it or the market’s disavowal of it.

When that time comes, the gravitational pull will be tied to the market’s valuation (over valuation) at 18.5X. Scary, so be prepared.

The Bulls Vs The Bears


Sentiment Indicators

VIX: 12.02; -0.72
VXN: 14.59; -0.39
VXO: 10.55; +0.51

Put/Call Ratio (PCR) (CBOE): 0.82; -0.13; 10 of 10 below 1.0, 14 of last 28 over 1.0.; 23 of the last 40 below 1.0. 34 of 60 over 1.0.

The Bulls and The Bears:

The Bulls are at 54.4 Vs 52.5 last

Note: Around 60 is where an Nortside move has topped over the past 18 years.

The Bears are at 23.3 Vs 24.7 last

Note: The Walls Street Bears are losing some ground though over the 15 level where a lot of the fades have bottomed.


Support and Resistance




DJIA close: 18,570.85



The 10 Day EMA: 18,431
18,351 the May 2015 high
18,288 the Mar 2015 high
18,168 a Apr 2016 high
18,100 from Dec 2014
18,016 the Jun 2016 high
The 50-Day EMA: 17,980
17,978 the Nov 2015 high
The 200-Day SMA: 17,399


S&P 500 close: 2175.03



The 10-Day EMA: 2156
2135 the May 2015 high
2130 the Jun 2015 high
2126 the Apr 2015 high
2120 the Jun 2016 peak
2119 the Feb 2015 high
2116 the Nov 2015 high
2111 the Apr 2016 high
2104 the Dec 2015 high
The 50-Day EMA: 2104


NAS Comp: close: 5100.16

5100 the Apr 2016 high
5176 the Dec 2015 high

5042 the Mar 2015 high
The 10-Day EMA: 5032
5007 the 31 Dec 2015 upper Gap mark
4980 the Jun 2016 high
4969 the Apr 2016 high
4960 the Sept 2015 high
4916 a Nov 2015 low
The 50-Day EMA: 4904

Have a terrific week.

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