posted 09.05 a.m. est
Pre-open comment Friday 14th March
On Thursday Sellers Responded (red-at-top) immediately to an early probe above the minor poc at 1872. Aggressive Selling (red-at-bottom) was also marked later in the session. Once again new long trades are eliminated for me at least until Significant Buying is marked again. There is Support at 1835.50, the six month poc, and this looks likely to be tested. Effective Selling marked below this level would be a sign of weakness in the longer timeframe.
The three Key Supporting Charts we have been watching are now implying a negative bias for equities and the Rydex Ratio just hit a new extreme as equites sold off which is usually ST bearish, see below. Momentum for all four stock index ETFs (although positive) is still down.
First Level Support = 1835.50 (6mn poc)
Second Level Support = 1792.00
Stocks>50dyma numbers: Nyse 60% (from 68%), Nasdaq 57% (from 64%), R2000 59% (from 66%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio spiked higher to 8.39, which is the highest ratio in my database and the first above 8. The Rydex traders are extremely bullish and historically this has been a warning for the market.
Supporting Charts (+ or – shown as implied bias for equities)
– KEY Chart Financial Sector XLF: has now broken below its maj 1/2R level (22.04).
– KEY Chart EURJPY: has broken below 140.96, the 1/2R off Dec high. Now in a weak price location.
– KEY Chart Bonds TLT: up strong yesterday and printing above 106.34 (10mn poc) in a strong price location.
Dollar Index: yesterday printed its lowest level since October and in a weak price location below 79.76, the maj poc.
Gold GLD: pre-open today is holding its strong price location above 127.20, the 18mn poc and printing its highest level since September.
Oil USO: Printing below 36.11, the 1/2R off Sep high in a weak price location. Momentum is negative and down.
EURUSD: Printed a two year high yesterday.
