Pre-open comment Friday 7th February
Market has been technically oversold and is up from this week’s lows. Breadth and price momentum need to improve. In the near term ES and SPY have interesting levels of Resistance, i.e. the 1/2R off January high corresponds to the minor poc from the same point, i.e. ES 1789/90; SPY 179.37. IWM (smallcap) has been relatively underperforming broader indices recently which is usually not a healthy sign.
First Level Resistance = 1789 (1/2R off Jan high)
Stock index ETFs: Key poc levels are SPY 179.37, IWM 110.87, DIA 152.70, QQQ 85.25. I’m using price relative to these levels as a guide to market strength/weakness.
Stocks>50dyma numbers: Nyse 33% (from 28%), Nasdaq 35% (from 33%), R2000 27% (from 25%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 4.85. Some nervousness is registering from the Rydex traders here.
Supporting Charts
Bonds TLT: printed a 6mn high on Monday. Momentum (although positive) is down.
Gold GLD: Tested the June low late December and has rallied from there but remains in a weak price location.
Oil USO: Consolidating above the 3yr poc (34.13) in a stronger price location.
Dollar Index: currently holding above the important 80.15 level with the maj poc at 79.76. Strong price location if it holds.
EURUSD: Recently broke out to a two year high but this was rejected and price reversed. Currently prints just above the 9mn poc (1.3524).
