posted 9.08 a.m. edt
Pre-open comment Thursday 25th August
Tuesday’s green-at-top high was comfortably exceeded in Wednesday’s session. ST analysis presented here suggests higher with LT analysis still negative.
This week’s low came in close to the 20dayVAL at1120 (dotted). Therefore, if ES does progress higher this week, the 20dayVAH at 1194 (dotted) may be a problem unless/until the STpoc at 1134 migrates higher.
First Level Support = 1134 (28dy poc) (SPY = 114.25)
Major Support = 1094 (MAJ LT poc) (SPY = 109.38)
LT Sentiment: Investor Intelligence (newsletters) reported Bears at 33.3% which is the highest number in almost a year. The Bears% increased by 9.6 (from last week’s 23.7) which is the largest increase in a single week that I have seen for years. The nett figure (i.e. Bulls – Bears) fell sharply to 7.6 which is the lowest number since Sep 2010. This poll is not a precise timing tool but we see a significant increase in pessimism here which is often present at or close to market lows. Adds weight to the idea that downside is limited at this point.
ST Sentiment: My version of the Rydex Assets Ratio was up slightly to 1.46. Monday’s ratio at 1.10 was the lowest reading since Sep 2010 (an extreme reading and would usually suggest that downside is limited).
Supporting Charts (+ or – or ? for equities).
+ EURUSD: prints above the band of maj LT support between 1.3920 to 1.3965 and currently, as I write, just above the 1/2R off May high at 1.44.
+ Dollar Index: Currently printing below the 74.96 poc.
– TLT: Sharply lower over last two days but still printing above the major 1/2R off the 2008 high at 105.22.
imo it is difficult to imply a bias for equities in the ST from these charts.
