posted 09.15 a.m. est
Pre-open comment Monday 17th March
Last week I marked Significant Selling three times and Significant Buying once. Last week’s price bar was “inside” the previous week’s bar so on the weekly timeframe, although Sellers were active they were not Effective. Momentum for all four stock index ETFs (although positive) is still down. The Rydex Ratio hit a new extreme last week. Effective Selling marked below 1835.50l would be a sign of weakness in the longer timeframe.
Looking for positives I note that the ES Support at 1835.50, the six month poc, has held so far and Breadth numbers have deteriorated but have not yet broken down, see below.
First Level Support = 1835.50 (6mn poc)
Second Level Support = 1792.00
Breadth: The CP Market Timing System turned negative for Nyse, turned neutral for Nasdaq and R2000, and turned negative for U.K.
Stocks>50dyma numbers: Nyse 61%, Nasdaq 64%, R2000 61%, UK 40% . Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio reached 8.39 on Thursday 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: Closed the week below its maj 1/2R level (22.04).
+ KEY Chart EURJPY: currently holding above 140.96, the 1/2R off Dec high.
– KEY Chart Bonds TLT: printing above 106.34 (10mn poc) in a strong price location.
Dollar Index: In a weak price location below 79.76, the maj poc.
Gold GLD: holding a strong price location above 127.20, the 18mn poc and last week printed its highest level since September.
Oil USO: Printing below 36.11, the 1/2R off Sep high in a weak price location. Momentum is negative and down.
EURUSD: Printed a two year high last week.
