Good morning and happy new year from Mr. B.
The NYMO cycle appears to be up.
I have a cycle low on 12/28 with a benchmark price of SPX 2249.11.
As year end can have a strong technical dynamic of its own, idiosyncratic to underlying trends, I would like to see a clearer higher low higher high sequence to confirm.
That said, yesterday's NYMO broke the 12/20 high and closed at a nice strong level. So, up until proven otherwise.
Price movement is interesting.
We opened the year with a gap giving us yet another possible downside target to add to our collection.
More importantly, the year-end close was down and below the 12/14 low.
In one of my posts last year, I noted that busting above the upper keltner band was normally followed by a series of price higher highs higher lows that kept the band rising.
We have not seen that, and in fact the 12/13 ATH still stands.
A review of prior such occurrences suggests that price should promptly recapture the upper keltner to keep the momentum ball rolling or else a deeper correction could ensue.
We shall see.
In any case, I am placing great importance on my single up target at the upper keltner band. I want to see it tagged soon... in a matter of days... and not with some bearish candle stick sort of thing.
If the bulls don't keep marching, that opening gap and the middle keltner could become magnetic.
I am long small from an opening day trade using a put/call setup I have in my toolkit.
I am looking to scale out a unit and move stop to breakeven if given the chance.
I may jam the stop next week if I don't like what I see.
It is early in the year. There will be plenty of opportunities ahead.
If Mr. Market is joggling a bit before showing the New Year vector here, I don't want to be stubborn with this one.