posted 8.56 a.m. et
pre-open comment Wednesday 10th October
Tuesday’s session generated a lower, wider Value Area on increased Volume. Yesterday’s First Level Support at 1446 was broken early in the session (now First Level Resistance) and ES was auctioned lower to find low for the session at the 1435 poc. Bulls would want to see this level hold or be recovered quickly on a test. VAL of current range is 1428 and VAH is1454 (both dashed on chart).
The lagging relationship of Smallcaps (IWM) and Tech (XLK) relative to large caps (DIA, SPY) has become more pronounced this week both in the look of the charts and %decline. As I wrote yesterday this is a concern. Also Nasdaq %Stocks>50dyma number has fallen close to 50.
First Level Resistance = 1446.00 (min 1/2R off Sep high)
First Level Support = 1435.00 (35dy poc)
Key chart levels this week: still monitoring the Maj 1/2R (off 2000 high):
QQQ = 70.13 (Tue Close 67.25). Nasdaq Comp = 3120.50 (Tue Close 3065.02). Nasdaq 100 = 2805.60 (Tue Close 2741.9).
Sentiment: My version of the Rydex Assets Ratio was almost unchanged at 4.09 (from 4.13). Smart Bulls would have been happier if the ratio had fallen sharply yesterday with the SP500 down nearly 1%, but we didn’t get it. Down quite a way from the extreme high (5.51) on 09/18 which coincided with the recent price peak. ISEE (equity only) index came in at 112, a thirteen day low.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
? EURUSD: Has so far held the Major poc Support at 1.2777 since the high in September. Bulls would want to see that level hold. Momentum is still down.
? Dollar Index: Since the September low the chart rallied to exactly 80.15 (the major level) and found Resistance there. Currently chart prints just below this Resistance. Price above 80.15 or below 79.19 would be strong/weak price location.
+ TLT: has been printing below the 125.93 (5mn poc) Resistance since early September. Price relative to the 1/2R off the September low at 121.64 is worth monitoring at the start of this week – chart in weak price location below that level.
It is difficult to imply an ST bias for equities from these charts.
