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A number of Sentiment indicators are at, or close to a Bullish extreme which is a concern but the sell-off mid-week worked off some of the “overboughtness”. Both the LT and ST analysis remain positive. First sign of weakness would be “Effective” Selling and that has not been marked since mid December.
*********** PRICE PERFORMANCE / LOCATION
Supporting Charts:
Bonds TLT: has spent the majority of the last four weeks printing time below 117.15, the major poc, which is weak price location.
Oil USO: On 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, ten days 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 week printed its highest level since early September. The next important Resistance is 81.35, the 1/2R off 2012 high. Price printing time above this level would be a further indication of strength.
EURUSD: Printed a six week low last week. Next Support is at 1.3117, the 24mn poc.
ES analysis:
Both Buyers and Sellers have been active over recent days. Last week I marked Significant Buying twice and Significant Selling once. ES found low at 1495, our exact First Level Support. This is now proven Support and ST Bulls would hope this level holds. The 45dy poc moved up to 1517.50 early last week and pre-open today ES has printed above this level. Price printing time above 1517.50 would be a further indication of strength. Friday’s Aggressive Buying means that new short trades are eliminated for me at least until Significant Buying is marked again.
*********** BREADTH
Chartprofit Market Timing System stayed positive for all Major Market Charts. %Stocks>50dyma numbers: Nyse 73% and Nasdaq 70%. UK 83%. Numbers >50 are supportive. Numbers>80 usually considered overbought.
*********** SENTIMENT
Consensus Polls:
02/22: AAII (public poll) reported Bulls% slightly lower at 41.8%. That’s the fourth week lower. And Bears% higher at 32.5%, which is a seven week high. The Nett (Bulls-Bears) at 9.3 is a four week low but the number four weeks ago was the highest since February last year.
02/22: Investor’s Intelligence Bulls% was lower at 48.4% which is a seven week low although the 54.7% recorded two weeks ago was the highest since February last year. Bears% was slightly higher at 22.1% although last week’s 21.1%, was the lowest since May last year. The 4wkma of nett was slightly lower but last week’s number at 32.00 was the highest since May 2011.
02/22: Market Vane (advisers) poll. Slightly higher at 69 which is the highest since 2007 . The 4wkma reached 68.75 which is also the highest since 2007.
02/22: The NAAIM number (a measurement of average current equity exposure among active money managers) came in higher than last week at 91.07. There have only been two readings higher than that. The highest being 104.25 three weeks ago.
Mutual Fund Flow:
02/22: My version of the Rydex Assets Ratio ended the week at 3.86, a 13day 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.
02/22: lipperusfundflows reported Equity Fund inflows of $2.9 Billion in the week to 20th February. The 4wk flow number unchanged at $22.30 Billion. Very high but lower than the extraordinary $34.19 Billion in the four weeks to w/e 1st February.
02/22: lipperusfundflows ex_ETFs reported Equity Fund inflows of $2.6 Billion in the week to 20th February. The 4wk flow number is down from the peak three weeks ago which was the highest in my database.
Volatility: VIX
02/22: Close on Tuesday was 12.31, the lowest since 2007