Pre-open comment Wednesday 22nd February
The LT analysis remains positive and until I mark Effective Selling below 1346 I am forced to assume higher but the negatives are stacking up.
1 I mentioned in Friday’s webcast that ES may struggle in the mid 1360’s which was the high of Tuesday’s day session.
2 We are approaching 91days up from November’s low (end of this week). This is a common low-to-high cycle for SP500.
3 The Rydex traders are as bullish as they’ve ever been (see below).
First Level Support = 1346 (min poc)
Major Support = 1307 (maj poc) SPY = 131.28
Sentiment: On Tuesday my version of the Rydex Assets Ratio reached 5.14 which is the highest ratio I have in my database. Also the assets in the Rydex Money Market fund are now approaching the lowest level I have in my database which was reached in May 2011. The Rydex traders are extremely bullish. Historically this has been a warning that the market has overheated.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
+ EURUSD: chart found Support last week at the 3mnth poc at 1.30 but daily momentum is down.
+ Dollar Index: chart found Resistance last week at the important 80.15 level but daily momentum is up.
+ TLT: Chart found Resistance last week at the 10month poc at 117.88.
imo these charts have a positive bias for equities for now. Important levels are close so this could change quickly.
