posted 09.12 a.m. est
Pre-open comment Monday 3rd February
Strictly applying my rules I had to mark Responsive Buying (green-at-bottom) on Friday but there are too many negatives to consider this any kind of indication of strength. If time is spent around the 1780 area of price it is possible that the 4mn poc (currently at 1835.50) could migrate lower and imo that would most likely be a negative development. I’m watching levels on SPY and IWM as detailed below.
Stock index ETFs: All four ETFs have Momentum (PriceOsc) down and negative. Key charts are SPY which is printing below 179.39, its 4mn poc and IWM which is printing above 110.87, its 4mn poc. If IWM breaks below 110.87 it would signal further weakness.
First Level Resistance = 1835.50 (4mn poc)
First Level Support = 1758.00 (prev poc and Dec low)
Breadth: CP Market Timing System stayed negative for Nyse, turned negative for Nasdaq, remained neutral for R2000, and stayed negative for UK.
Stocks>50dyma numbers: Nyse 41%, Nasdaq 47%, R2000 40%, UK 54%. Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 6.51, historically still very high. Not much fear registering here yet. On 16th Jan the ratio reached 7.5 which is the highest ratio in my database, registering extreme optimism and a warning for the market.
Supporting Charts
Bonds TLT: printed a 3mn high on Friday. Technical Oscillators register overbought but Momentum is positive and up.
Gold GLD: Tested the June low late December and has rallied from there but remains in a weak price location.
Oil USO: Printing back above the 3yr poc (34.13) in a stronger price location.
Dollar Index: currently holding above the important 80.15 level with the maj poc at 79.76. Strong price location if it holds. Further positive would be Momentum turning up.
EURUSD: Recently broke out to a two year high but this was rejected and price reversed. On Friday chart broke below the Support at 1.3524 (9mn poc) and today prints below this level in a weaker price location.
