emini analysis 28th March 2018 – pre-open from Chartprofit
Following the failed probe above 2760, the major Value Area high, the 7month poc migrated to 2725.00 last week, see last Wednesday’s highlighted comments. I wrote “the migration of an important poc will often occur just before a new directional move begins so it is now important to monitor price relative to that level”. ES remains in a weak price location if prints below 2725, the 7month poc. The last four Value Areas have been printed below that level. It is possible that the poc could migrate and give us a new level to key from but currently ES is in a weak location.
Stocks>50dyma numbers: Nyse 24% (from 29%), Nasdaq 33% (from 41%), R2000 31% (from 38%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was only slightly lower at 18.19. I wrote early last week “a higher ratio on a notable down day is not usually an encouraging pattern in the ST”. A similar comment could be made about the whole of last week – a huge down week and an almost unchanged ratio. As I said in the video this week “the retail investor may have learned the lesson that every dip should be bought” and therefore they remain complacent. That’s concerning. The Ratio fell to 10.94 in February, a four month low, but ended last week at 19.86.
Bonds: TLT – closed above 119.00, the maj poc. There is little difference between the pocs at 119 and 121 in terms of time, so I would want to seee TLT printing above 121 to confirm strength and before assuming a change of trend higher.
Dollar Index: the 5mn poc has migrated slightly higher to 89.88. The Index is currently printing below that level in a weak price location. There is Support at 87.25 which is the 1/2R off 2008 low.
Gold – GLD: closed on Tuesday above 125.23, the 4mn poc, in a strong price location.
Oil: USO – on 01/25 the chart reached its highest level since November 2015. Chart fell but probed that high on Friday. Is in a strong LT price location as long as it prints above 11.41.
GBPUSD: has again probed 1.4212, the major Value Area High. In January a probe into the VAH was rejected but price acceptance would be bullish. Chart currently prints above 1.3965, the 5mn poc, in a strong price location.
EURUSD: the 3mn poc is now back at 1.2264, and chart currently prints above that level in a strong price location.
USDJPY: two failed probes into the 113.70 maj poc Resistance in December and has been printing below 111.30, the 2yr poc, in a weak price location since then. Last month the chart broke below the 1/2R off the 2016 low which further weakened the price location and on Monday closed at its weakest level since November 2016.
