Chartprofit eBook 22nd March
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Breadth is supportive although %Stocks>50dyma numbers are lower than they were at the February price peak so there is divergence here. Sentiment indicators showed an overall increase in Bearishness last week but some have recently been peaking in optimism. First sign of weakness on the longer timeframe would be Significant Selling marked below ES 1517.50, the 3mn poc.
*********** PRICE PERFORMANCE / LOCATION
Supporting Charts:
Bonds TLT: Price below the maj poc at 117.15 is weak location. KEY CHART
Oil USO: four weeks ago broke below the 1/2R and poc Resistance around 34.17. This chart is in a weak price location but Momentum is up and positive.
Gold GLD: showed weakness after it broke below 161.0, the major poc, six weeks ago but Momentum is positive now and up.
Silver SLV: Still in a weak price location.
Dollar Index: strong price location above 81.35, major 1/2R but Momentum (although positive) is down.
EURUSD: The 24mn poc has migrated to 1.3070. Chart is still in a weak price location below that level and last week printed its lowest level since November. Momentum (although negative) is up.
ES analysis:
Last week I marked Significant Selling once and Significant Buying twice including Aggressive Buying on Friday which means new short trades are once again eliminated for me at least until Significant Selling is marked again. As long as chart holds above 1547, the minor poc, it is in a strong price location. First sign of weakness in the ST would be Significant Selling marked below that level.
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*********** BREADTH
Breadth: Chartprofit Market Timing System remained positive for all Major Market Charts.
%Stocks>50dyma numbers: Nyse 67%, Nasdaq 68%, UK 71%. Numbers >50 are supportive. Numbers >80 usually considered overbought.
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*********** SENTIMENT
Consensus Polls:
03/22: AAII (public poll) reported Bulls% lower at 38.9% (from 45.4%). Highest Bulls% recently was 52.3% seven weeks ago. Bears% was slightly higher at 33.3% (from 32%).
03/22: Investors Intelligence reported Bears% at 18.6 which is the lowest since mid May 2011. Bulls% at 47.4% was lower (from 50%) with the recnt high at 54.7% in early February.
03/22: Market Vane (advisers) poll. Lower at 66. Down from previous week’s 69 which was the highest since 2007.
03/22: The NAAIM number (a measurement of average current equity exposure among active money managers) came in lower than last week at 79.77 (from 85.64). This is an eleven week low. The highest reading in the database being 104.25 seven weeks ago.
Mutual Fund Flow:
03/22: My version of the Rydex Assets Ratio ended the week at 3.87. The 48day low for this number is 3.49. This indicator usually peaks with the market but currently it is at 50% of its twelve month range.
03/22: lipperusfundflows reported Equity Fund outflows of -$195 Million in the week to 20th March. The four week flow number is at $15.87 Billion.
03/22: lipperusfundflows ex_ETFs reported Equity Fund inflows of $1.4 Billion in the week to 20th March.