posted 09.12 a.m. est
Pre-open comment Wednesday 28th May
The four major stock index ETFs now print in strong price locations which is a sign of strength. Concerns are the strength in Bonds and Dollar and slow confirmation from Breadth, especially Nasdaq (see below).
Key charts are XLF (see below) and IWM which needs to hold above 111.48, its 12mn poc, to maintain its stronger price location. Chart approaches the next level of Resistance which is 114.0, the 1/2R off March high. Price above this level would be a further positive.
ES First Level Support = 1872.00 (maj poc)
ES Second Level Support = ES 1835.50 (previous poc)
Stocks>50dyma numbers: Nyse 62% (from 56%), Nasdaq 43% (from 36%), R2000 50% (from 41%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 6.65 (from 5.68). Bull fund assets that I follow increased by 15% yesterday. VIX closed at 11.55 on Tuesday and 11.36 on Friday which was the lowest since March 2013.
Supporting Charts (+ or – shown as implied bias for equities)
+ KEY Chart Financial Sector XLF: now printing above 22.04, its Major 1/2R level.
EURJPY: chart is printing below 140.96, the 1/2R off Dec high in a weak price location.
– Bonds TLT: strong price location and Momentum is positive.
Dollar Index: strong price location above 79.76, the maj poc and has printed a 36day high today.
Gold GLD: pre-open today has printed its lowest level since early February.
Oil USO: printing above 37.31, the 1/2R off 2011 high, and last week reached its highest level since September.
EURUSD: printing below the 1.3673 (12mn poc) in a weak price location.
