Thursday, December 20, 2012

Morning Market Analysis

The top chart shows that the SPYs have broken through most upside resistance and are now in the middle of a simple sell-off during the rally as traders take profits.  The 60 minute chart (lower chart) shows that prices are currently in the middle of standard Fibonacci support.

The real issue for the market right now is the fiscal cliff. Assuming a deal emerges that the markets like, expect the 147 handle on the SPYs to be vulnerable to a strong breech.

The weekly charts of the long-end of the yield curve are showing increasing technical weakness.  The TLHs (10-10 years, top chart) have decreasing momentum and volume flow.  In addition, prices have broken support established during a rally earlier this year.   The TLTs have broken shorter them support, have decreasing momentum and a weakening CMF picture.

Yesterday, oil made a strong move higher on decent volume.  The next logical area of resistance is the 200 day EMA.