posted 09.02 a.m. est
pre-open comment Monday 25th February
A number of Sentiment indicators are at, or close to a Bullish extreme which is a concern but the sell-off mid-week worked off some of the “overboughtness” (see below). Both the LT and ST analysis remain positive. First sign of weakness would be “Effective” Selling and that has not been marked since mid December.
Both Buyers and Sellers have been active over recent days. Last week I marked Significant Buying twice and Significant Selling once. ES found low at 1495, our exact First Level Support. This is now proven Support and ST Bulls would hope this level holds. The 45dy poc moved up to 1517.50 early last week and pre-open today ES has printed above this level. Price printing time above 1517.50 would be a further indication of strength. Friday’s Aggressive Buying means that new short trades are eliminated for me at least until Significant Buying is marked again.
First Level S/R = 1517.50 (45dy poc)
Support = 1495 (prev poc)
Breadth: All Major Market Charts remained positive.
%Stocks>50dyma numbers: Nyse 73%, Nasdaq 70%. UK 83%. Numbers >50 are supportive. Numbers>80 usually considered overbought.
My version of the Rydex Assets Ratio ended the week at 3.86, a 13 day low. The ratio reached 5.22 on 02/13 which was the highest reading since September. The highest reading in my database at 5.64 was in early April 2012. VIX: Tuesday’s close at 12.31 was the lowest since 2007.
Supporting Charts (+ or – or ? for equities). Momentum = daily PriceOsc
+ Bonds TLT: has spent the majority of the last four weeks printing time below 117.15, the major poc, which is weak price location.
– Oil USO: On Thursday broke below the 1/2R and poc Resistance around 34.17. This chart is now in a weak price location along with GLD and SLV.
– Gold GLD: has shown weakness since it broke below 161.0, the major poc, ten days ago. Has now printed its lowest level since July last year.
– Silver SLV: Last week printed its lowest level since August last year.
– Dollar Index: Last printed its highest level since early September. The next important Resistance is 81.35, the 1/2R off 2012 high. Price printing time above this level would be a further indication of strength.
– EURUSD: Printed a six week low last week. Next Support is at 1.3117, the 24mn poc.
imo these charts have a negative bias for equities. Particularly watching Bonds ETF, TLT, relative to its maj poc at 117.15.
