Chartprofit eBook 24th January 2014
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*********** PRICE PERFORMANCE / LOCATION
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Weekly structure: SPY closed on Friday below the Mon-Fri Hi-Lo range which indicates Sellers Active on this timeframe.
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Currently it is difficult to find positives. Buyers are absent in the ES analysis, Weekly Structure and daily Momentum indicators are down and Breadth numbers have deteriorated.
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ES Analysis: Friday’s session generated another Value Area below the 1835.50 poc. Aggressive Selling (red-at-bottom) was marked – these are usually tested within a day (or two). In the last seven days I have marked Significant Selling twice and no Significant Buying. At current levels, a positive could only develop for me if ES prints time around 1803 which would possibly migrate the 4mn poc lower and give us a refence level to work with but currently I’m very cautious.
*********** BREADTH
Breadth: The CP Market Timing system turned negative (from neutral) for Nyse, turned neutral (from positive) for Nasdaq and remained neutral for R2000. UK turned negative (from positive).
Stocks>50dyma numbers: Nyse 42%, Nasdaq 58%, R2000 51%, UK 59% Numbers >50 are considered supportive. Numbers >50 are considered supportive.
*********** SENTIMENT The majority of Sentiment indicators have registered extreme optimism recently. This usually a warning for the market.
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Consensus Polls:
01/24: AAII (public poll). Bulls% was slightly lower at 38.1%. Four weeks ago Bulls% reached 55.1% which was the highest Bulls% since January. Bears% was higher at 23.8%. The 4wk ma of net (Bulls-Bears) is at 16.05. It reached 25.05 ten weeks ago which was the highest since early 2012.
01/24: Investors Intelligence. Bulls% was slightly higher at 57.6%. Three week’s ago Bulls% reached 61.6% which was the highest since October 2007. Bears% was almost unchanged at 15.1%. Four week’s ago Bears% hit 14.1% which was the lowest Bears% in my database. The 4wkma of nett at 43.77 is now slightly lower than 45.3 which it reached two weeks ago – the highest in my database
01/24: Market Vane (advisers) poll was lower at 65. Three weeks ago the number reached 67 which was the highest reading since late May.
01/24: The NAAIM number (a measurement of average current equity exposure among active money managers) was lower at 95.13. There are only six readings in the database higher than this, the highest being 104.25 last February.
Mutual Fund Flow:
01/24: My version of the Rydex Assets Ratio ended the week at 6.84. On 16th Jan it reached 7.5 which is the highest ratio in my database, registering extreme optimism and a warning for the market.
01/24: lipperusfundflows reported Equity Fund inflows of $3.8 Billion in the week to 22nd January.
01/24: lipperusfundflows ex_ETFs reported Equity Fund inflows of $4 Billion in the week to 22nd January.
VIX
01/24: VIX closed sharply higher at 18.14 on Friday, a three month high.