posted 9.27 a.m. est
Pre-open Wednesday 4th August
ES held up well on Tuesday in a low volume, narrow Value Area session. We’re still waiting for Significant Sellers to respond at these higher levels. 1123 could continue to be resistance.
Dayframe: 1119 is very minor (2day) poc – dotted. If ES struggles to print above that level early in the session we could see ES lower.
I’m not interested in shorts until I mark Effective Selling below 1107/1108. This is a strong level of support combing a minor poc and 1/2R off the April high.
ST Sentiment: My version of the Rydex Assets Ratio jumped on Tuesday to 1.97 (from 1.53). That’s the highest level for three months and indicates that the Rydex timers are at last getting excited about this rally off the July low. Bull fund assets that I follow were up 17% and that’s the first time since the start off July that there has been a decent inflow into Bullsih funds. I take this as an added negative for the market – especially if the ratio continues higher, above 2.
VIX as well is indicating complacency.
Supporting Charts (technicals based on daily Price Oscillator)
– USDJPY: New low for 2010 today.
+ EURUSD: New 11wk high on Monday.
+ UDX: dollar index is in a weak price location. Next obvious support is 80.15 the 1/2R off the March08 low.
– IEF: the chart has a pattern of higher highs and higher lows and this is still intact.
imo the influence of these charts for equities is too mixed to be useful at the moment.
