Assessments / Blog

ES #F Supply but no result

Supply dominated Yesterday, but the ES closed level with the previous day. On a daily basis Supply was stronger than the previous day, but the Sellers could not drove the price lower? Price could not close below the 2782.50 level and the possibility exists that absorption is taking place. Today’s price action will probably give more clues to where the market is going in the near term.

Selling pressure is still present, with the Comparative strength weakening. Support to the down side should come in at 2782.50, 2762.00, 2737.75. A greater sell off should find support in the 2696.75 to 2677.75 area.

Comparative Strength Watch list:

The first block on the watch list is the Daily chart. The $VIX Comparative Ratio and Average turned up and the Ratio “Crossed” the average up (Green one bar ago). The $TRAN which normally leads the market has turned down (pink) and the Ratio crossed the Average 4 bars (days) ago, whilst the ES weakened 2 days ago, with the Ratio and Average turning down and a Cross to the down side also 2 days ago.

The big question remains: Will there be follow through to the down side?

End of the day Signals March the 5th:   

S & D Dashboard Algorithm is still Bearish.

Daily Signals are mixed

These readings are an independent assessment of the one and only measureable fundamental market mover: SUPPLY and DEMAND. It does not matter if price is influenced by a geopolitical event, seasonality, fundamental economic data releases or sentiment driven news, etc. It all reflects in Supply and Demand, the “footprints” of the “Big Boys” or “Smart Money”.


Volatility picked up Yesterday. Link to article about volatility VIX setup.


Our ongoing efforts to dissect these markets and to help educated and inform traders has led us on an exploration path into the general market activities of two leading market indicators; Commodity prices and Transportation Prices.  These two core elements of any regional or global economy are usually about 3~6 months ahead of the general markets.  When viewing the Transportation Index, remember that transportation is key to any growing economy and a healthy economy.  When an economy is doing well, the transportation sector will be busy shipping and delivering consumer product and staples as well as manufacturing equipment and supplies.  When viewing the Commodity Index, remember the Supply and Demand equation where greater demand for commodities needed to manufacture, create, deliver or sell a product will drive prices higher as supply remains relatively constant, prices will increase.

Therefore, the theory of today’s research post is “are Transportation and Commodity prices telling us anything important about the future stock market valuations?”.  Let’s get into the research.

Click on this link to read more....


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