Don Soubolsky / level3data.com
Much has been written in this post about the importance of the 1413 level on the SPX.
After several days above 1413, safely back from the 1413 ledge the SPX closed at 1409.52. Time is now for the bulls to buy this market to keep the SPX above the 1413 ledge. If the bulls fail the bears want to drive this market down to 1383 and then fill the gap at 1362.
This descending line’s origin is the 10/05/12 high of 1470. Ledges are slippery and stocks have been dropped from this 1413 ledge many times since 10/05.
LEVEL 3 DATA EXHAUSTION LEVELS: NEUTRAL on stocks (SPY) and bonds (TLT).
There are early signs of Buying Pressure Exhaustion on SPY. This means a disproportionate number of shares are trading at the ask side of the spread. This is NOT a Sell Signal but an early warning.
Last Week’s Quant Report: 6 / 6 trades were exited profitably week with an average gain of +2.32%.
RECAP: December 3rd: “Early signs of Buying Pressure Exhaustion on SPY”
Stocks were dropped off the 1413 ledge but are still hanging by a tether.
Prices declined just when the Level 3 Data Quant Report was showing early signs of Buying Pressure Exhaustion.
“Levels Recap” Nailed the high and low. The high of the day, 1423.78 (key level was 1423.75) was printed in the first 5 minutes. The low of the day was 1408.43 (key level was 1408.96). You can’t make this stuff up! See the 12/03/12 post for past levels.
LEVELS: Today December 4th: SPX S&P 500 Index:
Key resistance level for SPX: S&P 500 index December 4th – 1416.77, 1419.05
Key support level for SPX: S&P 500 index December 4th – 1403.40, 1399.70
SPY – S&P 500 ETF: Level 3 Data Quant Report signal is NEUTRAL: It appears the 0-line of $140.48 is safe for now. As long as this 0-line holds the new target for the SPY is $143.90. There are early signs of Buying Pressure Exhaustion as shown by the black artifact above the Buying Pressure Line on the chart for the past 3 days. This means a disproportionate number of shares are trading at the ask side of the spread. This is NOT a Sell Signal but a warning. The current rank is -0.49. Dips are to be bought as long as the $140.48 holds. A neutral rank on the SPY means higher volatility.
Level 3 Data Quant Report is neutral on the SPY.
THE MOST LIKELY TRADING SCENARIO is that we have seen the highs of the year of $148.11. The series of lower highs and lower lows will most likely continue. We rebounded off the $134.70 bottom to safely close above the 0-line of $140.48. Unless the fiscal cliff issue is resolved the $140.48 support will most likely break down to retest $134.70 low.
TLT – Long Term Bonds: Level 3 Data Quant Report signal is NEUTRAL: The TLT is trading in and around the 0-line of $124.69 and is now acting as support. The closing price yesterday was $124.66.
THE MOST LIKELY TRADING SCENARIO for TLT is to bounce around the 0-line and trade higher to print a new high in the $127.69 range. The TLT is a mirror image of the SPY.