The market stabilized yesterday with an “inside” price bar (both the high and low within the range of the previous bar) and is up strongly pre-market this morning (at 1000GMT).A quick review of the monthly chart is due as we begin December. In the last few monthly reports I have been watching technical indicators to get an indication on whether the rally from March is complete. The first is the TD Demand Line (upward sloping dashed green line). The qualified break in October was not confirmed in November. The supply & demand lines do not indicate the rally is over as demand enters the market on every pullback on this time frame.
The second indicator is the TD REI oscillator (bottom pane). A sell signal was not generated in November since 1019.95 was not broken. Now, even though the oscillator has not persisted in overbought territory long enough to indicate that a persistent uptrend has been established, the higher monthly close rules out a sell signal from this indicator in December.
Finally, there is no sell signal between price and the RSI or between the RSI and Composite Index.
In summary, the monthly chart indicates that any move above the November high will signal a continued advance to at least the next TD Trend Factor target of 1145.47 if not the higher long and medium moving averages (green and blue lines).
Bottom Line: Still neutral but willing to consider a short-term long position if we either fail to make a new high and then continue the pullback OR if we qualify and confirm a break out above 1110.
*NEW* Technical Analysis of Chart positions for longer-term positions:
Dollar Index: Out. (0.65 point loss).
World Gold Index: Out on a close below 1169.40.
Waiting for initial signals on the following charts: 10 yr Bond Yield,
Cash SP500 and the CRB Index.
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