posted 08.55 a.m. est
pre-open comment Tuesday 26th February
On Monday I marked both Responsive (red-at-top) and Aggressive (red-at-bottom) Selling. Note that red-at bottom lows are tested 80% of the time within a day or two. Monday’s Value Area was overlapping so strictly speaking this is not Effective Selling. Even so this was a reversal day that closed near the low and with the Selling Imbalances new Long Trades are once again eliminated for me.
It is rare (and frustrating) to have both Significant Buyers and Sellers as active as they have been recently. This increases volatility and makes the ST direction more difficult to anticipate. We’ll rely on price location and if ES prints below 1495, as it does pre-open, then I will be more cautious than of late. Bulls would hope that Significant Buyers will respond here. I also note that the Supporting charts are now lining up with a negative bias for equities.
First Level Resistance = ES 1495 (poc) or possibly Support?
The %Stocks>50dyma numbers are falling quite quickly. More weakness this week and these numbers could fall below 50% which would be a negative. Nyse 60%, Nasdaq 56%. Numbers >50 are supportive.
My version of the Rydex Assets Ratio was up slightly at 3.97. Friday’s 3.86 was a 13 day low. The ratio reached 5.22 on 02/13 which was the highest reading since September. The highest reading in my database at 5.64 was in early April 2012. VIX: Spiked up more than 30% on Monday to 18.98. Last Tuesday’s close at 12.31 was the lowest since 2007.
Supporting Charts (+ or – or ? for equities). Momentum = daily PriceOsc
– Bonds TLT: had a very strong day and is now printing well above 117.15, the major poc, which is much stronger price location.
– Oil USO: Last Thursday broke below the 1/2R and poc Resistance around 34.17. This chart is now in a weak price location along with GLD and SLV.
– Gold GLD: has shown weakness since it broke below 161.0, the major poc, two weeks ago. Has now printed its lowest level since July last year.
– Silver SLV: Last week printed its lowest level since August last year.
– Dollar Index: Last printed its highest level since August last year. Now printing above 81.35, the 1/2R off 2012 high. Price printing time above this level would be a further indication of strength.
– EURUSD: now printing below 1.3117, the 24mn poc potential Support.
imo these charts have a negative bias for equities.
