posted 09.24 a.m. est
Pre-open comment Thursday 27th March
On Wednesday I marked both Responsive (red-at-top) and Aggressive (red-at-bottom) Selling. The Value Area was “outside” the previous Value Area so once again this is not Effective Selling on the daily time frame and can be considered Responsive Selling in the longer timeframe because it all took place above the 1835.50 poc. Even so it emphasises the idea that new long trades are still elimintaed for me, see yesterday’s comments. Bulls would want to see the 1835.50 Support hold (Significant Selling below that level would be a negative in the LT) and Momentum turn back up for the four stock index ETFs. Breadth numbers deteriorated yesterday and Rydex ratio is still in extreme territory, see below. Supporting charts could break down here.
Second Level Resistance = 1872 (2mn poc)
First Level Resistance = 1852 (minor 1/2R ES Jun)
First Level Support = 1835.50 (6mn poc)
Stocks>50dyma numbers: Nyse 56% ( from 65%), Nasdaq 44% (from 54%), R2000 49% (from 60%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was only slightly lower at 7.39. On 03/13 the ratio reached 8.39 which is the highest ratio in my database. The Rydex traders are extremely bullish and historically this has been a warning for the market.
Supporting Charts (+ or – shown as implied bias for equities)
? KEY Chart Financial Sector XLF: printing just slightly above its maj 1/2R level (22.04).
? KEY Chart EURJPY: chart is printing just slightly below 140.96, the 1/2R off Dec high.
– KEY Chart Bonds TLT: pre-open is printing above 107.24, the 2year poc at an eight month high.
Dollar Index: now printing back above 79.76, the maj poc.
Gold GLD: printing back below 127.20, the 18mn poc in a weaker price location. Momentum remains down. SLV printed a 35day low.
Oil USO: Pre-open is printing above 36.11, the 1/2R off Sep high in a stronger price location.
EURUSD: Printed a two year high earlier in the month but is off that high with Momentum down.
