Pre-open comment Friday 4th April
The ST analysis is positive with ES holding above 1872.50 (28dy poc), Breadth numbers picking up, Momentum (PriceOsc) up for all four stock index ETFs and although Sellers were active throughout March they were Ineffective on the longer timeframe. Potential problems in the LT could be the five year cycle off the 2009 low, Sentiment, divergences between the U.S. and International indices, and the possibilty of stronger bond and dollar charts developing. Key level is the Support on the TLT chart which is currently holding, see below.
First Level Support = ES 1872.50 (28dy poc)
Second Level Support = ES 1835.50 (6mn poc)
Stocks>50dyma numbers: Nyse 76% (from 78%), Nasdaq 56% (from 60%), R2000 64% (from 68%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was almost unchanged again at 7.39. The ratio reached 8.39 on 03/13 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 above its maj 1/2R level (22.04).
+ KEY Chart EURJPY: chart is printing above 140.96, the 1/2R off Dec high.
? KEY Chart Bonds TLT: Chart reached an eight month high last week but has declined from there back to the 2year poc at 107.24, where it has stalled.
Dollar Index: printing above 79.76, the maj poc in a strong price location.
Gold GLD: printing below 127.20, the 18mn poc in a weak price location. Momentum remains down. SLV printed a 35day low last week.
Oil USO: currently oscillating around 36.11, the 1/2R off Sep high.
EURUSD: Printed a two year high in March. Off that high with Momentum negative and down but still holding a strong price location above 1.3673, the 12mn poc Support.
