posted 9.26 a.m. ET
Pre-open comment Wedesday 26th October
I marked Significant Selling on Tuesday. Red-at-bottom lows are usually (80%) tested the following day. Pre-open ES is printing above the 1st Level S/R at 1230.50 (minor poc). First indication of weakness would be ES printing time below the Maj 1/2R Support at 1214.50. Long Trades eliminated for me until Significant Buying (green) is marked again. Yesterday’s Key levels to watch were the 1/2R Resistance IWM 73.45 and RUT 735.12. Neither of these levels were exceeded.
1st Level S/R = 1230.50 (this level may attract more time).
1st Level Support = 1214.50 1/2R off May high (SPY 122.30)
2nd Level Support = 1189 (4month poc) (SPY 119.44)
ST Sentiment: My version of the Rydex Assets Ratio jumped to 2.34 (from 1.65). Bear fund assets that I follow were down 19%. Pre-open 10/20 I said “If ES manages to break out above the Resistance, I would expect the ratio to increase strongly which would be interesting”. We’ve now had three Value Areas printed above that Resistance and the Ratio has just increased significantly. This indicates the Rydex traders are going with the breakout and that’s not usually supportive. I need to see Significant Buying marked above 1214.50 before joining them.
Supporting Charts (+ or – or ? for equities).
? EURUSD: has found Resistance at 1.3965 (1/2R off 2008 high) but has not yet sold off from here. If this level is exceeded there is further Resistance at 1.40 (1/2R off May high). Momentum (PriceOsc) has been higher for twenty two consecutive days.
+ Dollar Index: Prints below 76.27 (1/2R off the May low). Momentum has been lower for twenty one consecutive days.
? TLT: Hit a 5day high on Tuesday. Has so far held the 112.13 Support (4mnth poc). Possible turn here for the daily chart if that Support can hold.
imo these charts have an unclear bias for equities.
