Pre-open comment Wednesday 8th April
Since the 7mn poc migrated to 2045.00 on 04/01 we have had three consecutive Value Areas generated above that level and technical improvement in breadth numbers and Price momentum. See also Sentiment, below. As long as ES holds above 2045.00 it is in a strong price location. Next positive would be time printed above the 1/2R off Feb high): ES 2070.00 (dashed); SPY 208.18
First Level Support/Resistance = 2070.00 (1/2R off Feb high June contract)
Second Level Support = ES 2045.00 (7mn poc); SPY 205.00 (6mn poc)
Stocks>50dyma numbers: Nyse 62% (from 67%), Nasdaq 57% (from 58%), R2000 63% (from 67%). Numbers >50 are supportive.
Sentiment: See Tuesday’s highlighted comments. My version of the Rydex Assets Ratio fell sharply on Tuesday to 9.91 (from 11.47). This was largely due to a sharp spike in Bear fund assets that I follow. The ratio is now down 29.5% from 14.06 on 03/02 which was the the highest in the database . I have mentioned recently that if SPY corrects 3.5% or more the ratio usually falls by 30% so yesterday’s rise in fear is encouraging (this is a contrarian indicator).
Supporting Charts:
Bonds TLT: closed just above 130.75, the 1/2R off the Jan high. Stronger price location if it can print some time above that level.
Dollar Index: on 03/13 chart printed its highest level since 2003. Has corrected from there but there is Support at 94.67, the 12mn poc. Today DX is printing below 98.28, the 1/2R off the recent high, which is weaker price location in the ST.
Gold GLD: pre-open today is printing above 115.12, the 12mn poc. Time above this level would be a positive.
Oil USO: closed above 18.39, the 12mn poc which is stronger price location if it holds.
EURUSD: fell since May last year to major 1/2R Support at 1.1241. Chart held above that level through February but broke that Support in March.
