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Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.

Abraham Lincoln

The Christmas period is now over for another year and the markets will return to their business.

The last three weeks COT index number are: 55%, 69%, and this week’s 64%. Thus, this week, looking at the price action of the market, I would expect a weaker market in that the COT number as it strengthened at 69%, the market only moved marginally, and did not make new highs. This week, the index number weakens, and therefore I would be looking at a weaker market potentially.

Technical

The 10day and 15day charts correlate best with the current price action. There is support marginally above the $182.oo level on the 15day chart and the same on the 10day chart.

The area that causes concern is that on the 10day chart we have a downtrend channel, while on the 15day it remains an uptrend channel. There is no real way to predict which short-term trend will dominate, however adding the COT index number to the mix and I would be leaning to the bear case [for this week].

Starting next week, I’ll be [via the newsletter] be adding an overnight end-of-week-trade. I’ll be testing it live this week, and if all goes as it should, I’ll be adding an extra e-mail with the trade on Thursday prior to the close, to run to the close [or thereabouts] on Friday, so a very short-term trade. It is a refinement of the original “Weekly Trade” that I ran for the first half of last year.

Trade

Entered Trade

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