posted 9.20 a.m. est
Pre-open comment Friday 20th May
The Support and Resistance given pre-open marked the extremes on Thursday apart from brief, rejected tests early in the session. Following Wedneday’s Aggressive Buying ES was higher yesterday but has yet to exceed the given Resistance at 1344.75. As I wrote “Time printed above that level would confirm the minor strength seen…and a new high would be expected”. Same levels today should give a guide to price direction in the ST.
Given that the Chartprofit Market Timing system was still negative as of 05/13 and the Nasdaq %Stocks>50ma number has not yet climbed back above 50 we can say that the market internals are not yet confirming but Market Sentiment numbers are looking more encouraging for contrarian Bulls (see below). Short Trades eliminated for me since Close 05/17.
Resistance = 1344.75 (minor 1/2R off May high)
First Level Support = 1336 (30day poc)
Major Support = 1327 (6month poc)
LT Sentiment: In the Investors Intelligence (newsletters) poll Bulls% was down at 45.6% which is the lowest since October 2010 and in the AAII (public) poll Bulls% at 26.7 is the lowest since August 20210 and Bears% at 41.3 is the highest since September 2010. Also lipperusfundflows.com reorted net Equity Fund outflows of -$6 Billion in the week ended 18th May, the largest net ouflow since August 2010.
ST Sentiment: My version of the Rydex Assets Ratio was down to a 20day low at 3.27 (from 3.7). Although that’s still historically high it is 19% down from the extreme of 4.57 recorded earlier this month. Also the ISEE (equity-only) Index_10dayma reached its lowest level this week since September last year.
Supporting Charts (+ or – or ? for equities).
– EURUSD: 30day low on Monday. Daily momentum (PriceOsc) is down. Support at the 1.3923 poc (12month).
– Dollar Index: 28day high on Monday. Daily momentum is up.
? TLT: 5month high earlier in the week but minor support trendline off April low was broken on Thursday and daily momentum is down.
imo these charts are mixed and bias for equities is currently unclear.
