posted 9.05 a.m. est
Pre-open Monday 9th August
At the start of last week ES gapped higher and spent Monday through Thursday consolidating the higher level which lifted the minor poc to 1119. Following the jobs report on Friday ES sold off but was auctioned back to that poc late in the session.
Longframe: The CP Market Timing System stayed negative for all U.S. indices for the fourteenth consecutive week.
ES 1119 is the most important level to monitor going in to this week. On Friday 1119 was intraday resistance (see Friday’s pre-open comments highlighted left) but pre-open today ES prints above that level which is a sign of ST strength if it holds.
Major support is still the Maj POC at 1094
At current levels I’m not interested in shorts above ES 1107 (dotted) – the 1/2R off the April high.
Sentiment: most indicators are not telling us much at the moment apart from:
The AAII (public) poll showed Bulls at 30.4% (down from 40%) and Bears at 38.2% (up from 33.3%). As we know it is very rare for a multi-week high to come in with more AAII Bears than Bulls and would therefore indicate higher at least in the short term…
.. and on Friday the VIX printed its lowest level for three months which is normally an indication that a high of some degree is not far away.
Supporting Charts
– USDJPY: New multi-year low last week.
+ EURUSD: New 3month high last week.
? Tested the 80.15 support on Friday (1/2R off the March08 low). Currently printing above.
– IEF: Last week IEF reached the highest level since March 09
imo the chart to watch is the Dollar Index. If the Major 1/2R at 80.15 provides support stock indices will consolidate or retrace – if 80.15 is broken this will help equities higher.
