Today is January 16 and $ES is 300 handles above the December lows. Bears look like they could use a hug. Not a single retrace since the January 4 Powell “balance sheet flexible” speech. Hug away bears, but what’s really happening here are technical reconnects still. Over the past few days we’ve seen indices reconnect we key MA’s and today some of the laggards have caught up. Below some charts following up to Return to the Crime Scene.
The basic key MA I’m talking about is the 50 day moving average:
Mission accomplished as outlined in Imbalance and balance achieved.
But it’s not only the 50MAs, no Sir, as chance will have it we’re also seeing reconnects with the quarterly 5EMAs:
These were support during the rally phase in 2016-2018 before the breakdown in December.
Speaking of $DJIA it’s reaching key resistance:
None of this means the rally is over, only a reversal would confirm this, but it is of note that key reconnects have occurred and indices are approaching key resistance zones.
Don’t be surprised if bulls need some hugs soon as well.
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Categories: Market Analysis