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The following indicators are at or close to a Bullish extreme in Sentiment: Investor’s Intelligence poll, Market Vane poll, NAAIM, VIX and the mutual fund flow data from lipperusfundflows.com. However the more ST sensitive Sentiment numbers from the Rydex and Options data are not. If my version of the Rydex Assets ratio were nearer to 5 than it is it would be a stronger contrarian bearish indication than I’m currently seeing – the ratio can change quickly though, as we’ve seen before. The market is still overbought but LT and ST analysis remains positive
*********** PRICE PERFORMANCE / LOCATION
Unlike Equity Index/ETF charts, the following KEY Charts are printing very close to useful reference levels. Monitoring price relative to these levels should give us a good idea about the markets current appetite for risk; mixed at the moment but will hopefully give better indication soon.
Bonds TLT: Closed near the low of the week at 118.03 but above the major poc Support at 117.15. Pre-open today chart has made a new low for this decline and tested that Support. Time below this level is weak price location.
Commodities: Oil USO is now printing above the 1/2R and poc Resistance around 34.17. Price holding above this level indicates further strength. Gold GLD was Closed the week just below the 161.0 major poc. Chart below this level is weak price location.
EURUSD: on Friday chart cleared the Resistance at 1.3416 (1/2R off 2010 low). Time printed above this level would be a positive for this chart and equities.
Dollar Index: is printing just above 79.80, the 2yr poc. Price printing above 80.15 would be an even stronger price location and be a negative for equities.
ES analysis:
Last week I marked Significant Buying twice. Significant Sellers have not been marked for eighteen days. ES Closed above Mon-Wed Hi-Lo Range which is a positive weekly structure.
*********** BREADTH
Chartprofit Market Timing System is positive for all Major Market Charts.
%Stocks>50dyma numbers: Nyse 92% and Nasdaq 80%. UK 92%. Numbers >50 are supportive. Numbers>80 usually consideed overbought.
*********** SENTIMENT
Consensus Polls:
01/25: AAII (public poll) reported Bulls% sharply higher at 52.3%, the highest since January 2011. Bears% were lower at 24.3%. The nett (Bulls-Bears) at 28 is the highest since February last year.
01/25: Investor’s Intelligence Bulls% was unchanged at 53.2% an eighteen week high. Bears% was also unchanged at 23.4% which is the lowest since w/e 18th May 2012. The nett (Bulls-Bears) at 30.9 is the highest since 6th April 2012 which coincided with the price high. The 4wkma of nett is now at its highest level since April 2011.
01/25: Market Vane (advisers) poll was higher at 68. The 4wkma approaches the highest level since 2007.
01/25: The NAAIM number (a measurement of average current equity exposure among active money managers) was higher again at 86.38 which is a little below the reading of 88.1 w/e 28th Dec which was the highest since 2007
Mutual Fund Flow:
01/25: My version of the Rydex Assets Ratio ended the week at 3.73. The ratio has fallen since it reached a 69day high of 4.63 on 01/14 – meanwhile the market has been climbing. Usually, if the market is accelerating up into a top, the ratio nearly always follows it higher and hits a multi-week high itself.
01/25: lipperusfundflows reported Equity Fund inflows of $2.9 Billion in the week to 23rd January. The 4wk flow is around its highest level for years.
01/25: lipperusfundflows ex_ETFs reported Equity Fund inflows of $3.7 Billion in the week to 23rd January. The 4wk flow is the highest it has been since early 2011.
Volatility: VIX
01/25: VIX Closed at 12.43 on 01/22 which is the lowest since 2007.