Pre-open comment Wednesday 3rd June
See previous, highlighted comments. The two levels we were monitoring coming in to this week were the 2117.50 Resistance and the 2095.50 Support. So far this week they have capped price action top and bottom, see chart. However, enough time has now been spent at the mid point between these two levels to migrate the 10mn poc up from 2095.50 (dashed) to 2107.00. But only just, so more time at 2095.50 would migrate it lower again. Even so, we now monitor 2107.00 as First Level Support and pre-open today ES has been probing the 2117.50 level again. Time below 2095.50 would be an indication of weakness but it is worth noting that since the 10mn poc migrated up to that level mid May, it has not been broken – this has to be taken as a positive indication. Bulls would want to see breadth measures improve, see below.
First Level Resistance = 2117.50 (minor poc)
First Level Support = 2107.00 (10mn poc)
Further Support = 2095.50
Stocks>50dyma numbers: Nyse 43% (from 41%), Nasdaq 50% (from 46%), R2000 43% (from 41%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was slightly lower at 11.58. Bear fund assets that I follow have fallen back and are close to the extreme low level of earlier in the year. Thta’s a concern. The highest ratio in the database was at 14.06 on 03/02
Supporting Charts:
Bonds TLT: in May probed the 12mn Support 119.26 and rallied but is currently printing close to that Support with further Support at 117.14, maj poc.
Dollar Index: printing back above 94.67, the 12mn poc which is LT strong price location. Dollar Bulls would want to see price printing back above 96.76, the 1/2R off March high – currently below that level.
Gold GLD: in May a probe into the Resistance at 117.60, the 1/2R off the November low, was rejected and last week broke below 115.12, the 12mn poc indicating further weakness.
Oil USO: in May printed its highest level since December and since early April has been printing above 18.39, the 12mn poc, in a stronger price location but Momentum (PriceOsc) is negative.
EURUSD: currently printing below the major 1/2R (1.1241) in a weak price location but close to that level today.
