Today’s webcast is available to view
transcript below:
Hello this is Bob Debnam with the Chartprofit webcast, couple of hours in on Friday, 29 November.
This from the pre-open today: E-mini S&P – the minor 16 day point of control is first level short-term support at 1789 and all of this week’s value areas had been printed above that level. Last week on the Wednesday I marked Significant Selling but the low of that day was not tested the following day which is unusual, in fact the following day (Thursday) exceeded Wednesday’s high. None of the selling we have seen recently has been Effective Selling.
I said a week ago pre-open that until sellers can mark an Effective Response I have to assume Buyers remain in control of the dayframe and in any event only Significant Selling marked below 1758.50 would have negative implications for the longer timeframe
The breadth numbers are still pretty healthy here.
Bonds, precious metals, oil do not look that encouraging from the point of view of price location but most of the indications that we have for equities including the momentum indicators for stock index ETF’s (positive and heading up) look positive in the short term. We have our levels in place and the first concern comes with price below the ES 1789 level.
Sentiment indicators are pushing extremes and if the market pushes higher next week we could be looking at a number of them reaching levels that we would consider consistent historically with market tops so this could be some kind of blowoff phase we are entering here. When that starts to happen you look to see when Responsive Sellers are entering the market and simple things like Support trendlines breaking down and our percentage stock numbers falling below 50 – but currently strong price location and Buyers Active and in control.
Here’s the E-mini heading up to 1811 here. We will see more evidence of divergences as we go through this. We can see the price oscillator is heading back up but there is quite a divergence between the previous peak as price is heading out to a new high and the price oscillator is not which only becomes a problem if it starts heading down as I’ve said many times before.
SPY obviously a very similar looking chart.
Russell 2000 ETF, IWM, Long term Support down here at the two month point of control. Price below that would be a problem for the long-term trend but the last thing it did there recently was make a higher low on that level which is a bullish sign – as did the QQQ. If you remember we discussed the Support and then saw the Support hold. The trendlines I was talking about on these ETFs are here – I don’t use them apart from this kind of situation.
So what’s worrying us? where are these divergences? This is the Market Chart for NYSE and we are heading higher here to a new price high but the daily breadth indicators (although they are supportive in terms of these bottom two indicators) there are these divergences. Same thing on the NASDAQ Market Chart.
This is the UK FTSE 100 chart. You can see it reached its peak in May this year so far …we looked at this last week. FTSE close down this week about 19 points which is about a third of a percent. I look at these charts and something’s just not right with some of these. It seems the US is breaking out to new highs but other important indices are not following the lead and this is negative divergence.
The Bulls are in control of the dayframe, we are above First Level Support but let’s play devil’s advocate and look for things to worry us a little.
This is the public poll from AAI I – the Bulls percentage this week was sharply higher at 47.3% and that’s close to the 49.2% it reached five weeks ago which was the highest since January. Bears percent was slightly lower. We know the four-week moving average of nett, in yellow here recently took out the previous peak in July.
In the Investors Intelligence poll the Bulls percent was higher at 55.7%. That’s the highest since April 2011. Bears percent was lower at 14.4% and that’s the lowest Bears percentage for years. The net (Bulls minus Bears) at 41.3 is the highest single reading since April 2011 and the four-week moving average of net at 39.02 is an extreme reading – that’s the yellow line here – and that’s the highest reading for many years. This indicator will often hit an extreme or peak a few weeks before the market top if there is to be one – we should not ignore this
This is the ISEE equity only index, a good measure of public option buying sentiment. The 10 day moving average in yellow well below this peak it reached back here early last year so no real signs of irrational optimism here
My Rydex Ratio up around five currently which historically is very high. Extreme last week the ratio reached 5.2 and that was the highest since the market May high. I’m watching this level very closely.
If the market pushes higher next week we could suddenly see this spike higher. If we look here at the Bull fund assets that I follow they are really peaking here. If the Bear fund assets should suddenly see some outflows, this is the chart here, if they should fall sharply it would push the assets most likely up here above this previous peak and that would definitely have me looking for signs of weakness.
Here’s my Pulse chart for the S&P 500. You can see from this that since early October the NYSE daily breadth has been positive and supportive. The trend indicator…at the bottom here has remained above zero. We saw Momentum fall away as the market went into a consolidation but is now heading back up and the most recent imbalances we have seen have been Buying here – the green bars – imbalances from the S&P 500 E-mini profile that we looked at earlier. So we stay bullish but a little concerned about the sentiment.
I mentioned last week that I was following Forex charts more closely and I have major levels sorted out for all these charts here. This is not buy and sell indications but if you look across the rows (the top row being the Australian dollar) simply shows whether they are in strong or weak price locations and that’s from my subjective look at each of these charts relative to its major levels.
For instance – the Australian dollar. Most of the charts that are giving any indication are in a weak price location in contrast to something like the Euro where most of these charts are in a strong price location.
AUD weak. CAD weak. These charts historically move pretty closely with the equity market and again here I’m seeing divergence in terms of risk appetite.
AUDUSD – in the short term it’s in a weak price location. It fell back below its four-month point of control recently. We had a lower high at that four-month point of control, we talked about that at the time. As discussed last week, we’ve now broken back below the halfway point off the August low which puts it in a short term weak price location but in the longer term we have a more important point of control down here at 0.8954, a Support level which was Support in August and early September. If this is tested again, as I believe it will be, and we see price below that level the chart would be in an extremely weak price location.
Here’s the Euro FX chart. Above the 1/2Range off the 2010 low which has previously been Resistance in June and again in early August and we’ve just made a higher low in November at that puts the chart in a strong position and we are now breaking above the halfway point off the October high.
GBPUSD. We discussed this major point of control at 1.6090, long-term from the daily chart, a really important level. Chart has been oscillating around it but now pushing higher.
If we look at USDJPY, we’ve discussed these levels. The twelve month point of control, here at 98.14, and then price found itself back above the half way point off the May high and we’ve been talking about this chart in positive terms for a while, the Dollar is strong against the Yen.
And finally just to look at some of the supporting charts that we follow in the pre-open report each day. The T-bond ETF TLT – the eight month point of control at 106.31 and we’re below that level currently and it recently went down and tested the August low. Is this a double bottom? Don’t know. Wouldn’t even think about that until price is back above the eight month point of control. I would personally want to see price back above 106 31, even a higher low above that level. I haven’t given any positive comment on this chart for months and months; I still think this is weak price location. The halfway point of the August low is here around 105.43 and we need to be above both these levels. I still see this is week price location and bonds pretty weak here.
Precious metals This is GLD the gold ETF and again I’ve had nothing positive to say about this chart for many months. The twelve month point of control is quite a bit higher, the halfway point off the June low is at 126.14 and we’re below that so again weak price location. Silver, SLV – very similar chart, weak.
USO, the oil ETF. Major levels around 34.15. Has been consolidating below that level and broke lower a couple of days ago. If you are bullish on oil you’d really want to wait for a higher low above 3417.
okay that concludes