posted 8.38 a.m.
Pre-open comment Monday 10th October
Chartprofit Market Timing system remained negative for the twelth consecutive week. %Stocks>50dyma numbers stayed well below 50. Breadth is not supportive.
Last week I marked Significant Buying twice and Significant Selling once. Value Area for the week as a whole was overlapping/lower so the Buying Activity cannot be called Effective on this timeframe.
On Friday the 40dypoc migrated up to 1158. This is now a major reference level. In Friday’s webcast I said we need to look for clues re which way ES is likely to break out of its 2month range. If the 40dypoc migrates higher again from here (most likely 1188) or lower (most likely back down to 1132) I believe the direction of the next intermediate move will be signalled.
1st Level Support = 1158 40dypoc (SPY 114.85 4mnthpoc)
1st Level Resistance = 1214.50 1/2R off May high (SPY 122.30)
ST Sentiment: As last week, my version of the Rydex Assets Ratio ended the week at 1.26. The recent extreme low for this indicator was 1.10 on 22nd Aug.
Supporting Charts (+ or – or ? for equities).
? EURUSD: Broke Major Support in early September but has recovered back above 1.3416 (1/2R Support off June 2010 low).
? Dollar Index: Last week printed its highest level since January but momentum (PriceOsc) has been lower for nine consecutive days.
– TLT: Last week printed a new high testing again the old high from December 2008. Currently printing back below that level.
imo these charts have a negative bias for equities in the LT but unclear in the ST.
