Chartprofit eBook 3rd January 2014
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*********** PRICE PERFORMANCE / LOCATION
SPY closed on Friday below the Mon-Fri Hi-Lo range indicating Sellers Active. The weekly bar was overlapping/higher so this is Ineffective Selling.
Stock Index ETFs: Momentum for SPY, IWM and DIA now positive and up. QQQ is positive but turned down on Friday.
ES Analysis: Last week I marked Significant Buying once. Significant Selling has not been marked for sixteen days. Support is at the 4mn poc at 1803.50 and as long as ES holds above that level it is in a strong price location. There is minor Resistance at 1835.50, the 20dy poc but if ES prints time back above that level the distribution pattern would suggest a target of 1865.
*********** BREADTH
Breadth: The CP Market Timing system remained positive for Nyse, Nasdaq and R2000 and remained neutral for UK.
Stocks>50dyma numbers: Nyse 64%, Nasdaq 72%, R2000 70%, UK 74%. Numbers >50 are considered supportive.
*********** SENTIMENT The majority of Sentiment indicators have registered extreme optimism recently. This usually a warning for the market.
Consensus Polls:
01/03: AAII (public poll). Bulls% fell sharply to 43.1%. Down from 55.1% previous week which was the highest Bulls% since January 2011. Bears% jumped to 29.3% from 18.5% previous week. The 4wk ma of net (Bulls-Bears) is now at 22.28 slightly lower than the ratio seven weeks ago at 22.62 which was the highest since early 2012.
01/03: Investors Intelligence. Bulls% was higher at 61.6% which is the highest since October 2007. Bears% was higher at 15.2%. Previous week’s 14.1% is the lowest Bears% in my database. The nett (Bulls minus Bears) at 46.4 is the highest single reading in my database and the 4wkma of nett at 44.92 is also the highest in my database
01/03: Market Vane (advisers) poll was unchanged at 67- the highest reading since late May.
01/03: The NAAIM number (a measurement of average current equity exposure among active money managers) was lower at 95.03. There are only five readings higher than this, the highest being February’s 104.25.
Mutual Fund Flow:
01/03: My version of the Rydex Assets Ratio ended the week at 4.77, down sharply from Thursday’s ratio at 6.09. The ratio reached 6.65 the previous week which is the highest ratio in my database and registered extreme optimism which has historically been a warning for the market.
01/03: lipperusfundflows reported Equity Fund inflows of $3.5 Billion in the week to 1st January.
01/03: lipperusfundflows ex_ETFs reported Equity Fund inflows of $406 Million in the week to 1st January.