A Few More For The Road

Equities are holding steady as she goes in the last low volume pre-holiday trading session. The Zero has been flat as a flounder since Monday afternoon, thus suggesting very limited participation – and clearly there has been little resistance on the way up. I suggested last weekend that the current spot near the NLBL matters but I also suspected that we wouldn’t see true resolution until after the long holiday weekend.

It’s quite possible the VIX may register a third close outside the 2.o Bollinger today. Usually that would be bullish sign but I can’t give it too much weight just yet – let’s see what happens Monday or Tuesday when everyone who matters is back at the desk. In any case – if we close outside yet again then our VIX sell signal count resets back to 1.

Now despite the holiday churn the picture is actually rather clear right now as we have the benefit of inflection points across various charts and time intervals. Let’s start with the E-Mini profile which yet again shows us at right smack middle ‘thee ole’ volume hole’. Overcoming this once and for all will require a bit more energy than just one or two low volume candle paintings.

The Net-Lines and BB chart indicates that the 25-hour is still in the running. Looking positive right now but this may be retested early next week. Now I have drawn a green line at 1400 which pretty much exactly is where we are seeing a concentration of prior touches over the past few months. If we overcome the volume hole and push higher from here then 1400 would be the final bastion of resistance which, once overcome, would lead the way into a Santa rally.

Here’s a little zoomed in view showing the E-Mini seemingly having little problem overcoming the daily NLBL. Again we may see a retest next week as this one won’t expire until Monday. But it’s looking positive thus far.

Now let’s zoom all the way out – the final perspective I would like to share is the weekly chart, which elicits a much more significant hurdle at the 25-week SMA. We are right below it and this adds another layer of importance to what happens here at the volume hole and the daily NLBL.

Botom Line: After a predictable push off the lows equities are now facing overlapping resistance across various time frames, except for the monthly panel. What happens here and of course at the psychologically sensitive 1400 mark will be the gateway to what happens in the final weeks of this year. If the bulls fail this test then the much coveted annual Santa rally may turn into a write off. For the bears this is the last opportunity to take back the reigns but thus far I have not seen much selling interest.

Public Service Announcement: I am planning on finally taking a few days off, hence this will be my last post until my Monday morning briefing. Obviously Thanksgiving is not being observed over here in Spain but we’ll somehow try to dig up some pumpkin pie. Believe it or not  – much to my chagrin the all but ubiquitous turkey meat as we know it in the States is but impossible to find here on the Iberian peninsula. But rest assured that I’ll be enjoying my days off all the same – I’ll just have to do with tapas and a bottle of Rioja. Perhaps I’ll mix in a few spices and some cinnamon 😉

Which only leaves me to wish you a most relaxing and pleasant Thanksgiving holiday! I hope to welcome you all back safe and sound (and probably a few pounds heavier) next week!

Cheers,