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16 December 2020 – Warning Bells are ringing on the indices!!

Summary (The Week Ahead)
$DJTUpTrend and downward momentum and in a preliminary Squeeze. /YMUpTrend and upward momentum and in a Squeeze. /RTYUpTrend and upward momentum. /NQUpTrend with upward momentum. /ESUpTrend with upward momentum.

The indices continued to make new all-time highs. The Russell 2000 is trending strongly. UpTrend remains.

/CLUpTrend and upward momentum. /GCUpTrend and Upward momentum. /ZB – DownTrend and sideward momentum and in a Squeeze. HYGUpTrend with upward momentum. DBCUpTrend with upward momentum.

Junk bond (HYG) and DBC are both in an upTrend with upward momentum. That is a good sign that we are in an UpTrend market.

$DXY – DownTrend with downward momentum. EUR/USDUpTrend with upward momentum. USD/JPYDownTrend with downward momentum and in a Squeeze.

Market Internals
Market Sentiment – Extremely Bullish. Put/Call ratio – 0.501. Market Breadth – sloping downwards showing more losers than gainers. Volume Acc/Dis – sloping downwards and showing distribution. Skew – 144.79. Vix – 22.50.

Market internals continue to show distribution. Skew is above 142 giving warning of a Fat-Tail event. UpTrend remains intact but warning bells are ringing.

Relative Strength – Sectors.

On a 3-monthly lookback, the relative strength order of the S&P ETF 500 sectors are SPY, XLY, XLK, /ES, XLF, XLE, XLI, XLB, XLP, XLV and XLU.

On a 12-monthly lookback, the relative strength order of the S&P 500 ETFs are XLY, SPY, SPX, XLK, /ES, XLB, XLP, XLI, XLV, XLF, XLU and XLE.   

To Your Wealth!
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