posted 08.38 a.m. est
pre-open comment Monday 7th October
Strictly applying my rules I had to mark Significant Buying (green-at-top) on Friday but this dayframe activity needs to be put into a longer timeframe perspective.
Firstly, in the dayframe, ES was auctioned back to First Level Resistance at the 1685.50 poc on Friday but no higher and therefore this Aggressive dayframe Buying can be classified as Responsive in the longer timeframe. As I wrote pre-open Thursday “until I mark Significant Buying above the proven poc Resistance at 1689 I will definitely not consider new longs on any timeframe.”
Secondly, in the longer timeframe, Buyers were active twice last week (green) and yet price action was lower than the previous week. This indicates that the Buying Activity was Ineffective on the weekly timeframe suggesting that Sellers may be Resting and forcing a response from the Buyers. This can be a weak pattern if Sellers become Active again. I repeat Friday’s comment “Significant Selling marked below 1685.50 would suggest further weakness, Bulls of any timeframe would want to see ES recover that level asap.”
Stocks>50dyma numbers: Nyse 62%, Nasdaq 63%, R2000 59%, UK 48%. Numbers >50 are considered supportive.
First Level Resistance = 1685.50 poc
First Level Support = 1653.50 poc
Sentiment: My version of the Rydex Assets Ratio findished the week at 4.20. Tuesday’s ratio at 4.54 was the highest ratio since 06/11. This is a contrarian indicator. The ratio reached as high as 5.43 at the market May high and as low as 2.15 on 07/10 (which was the lowest ratio since January 2012).
Supporting Charts
Bonds TLT: Recently probed the 6mn poc at 107.22 but has not yet exceeded this level. Momentum (although postive) has turned down.
Oil USO: Closed the week at 37.31, the low of the Support/Resistance band. I’m not interested in considering the long side of this chart until price can print time above 37.93, the maj poc.
Gold GLD: Printed a 39dy low last week and remains below 134.17, the 12mn poc, in a weak price location.
Dollar Index: Is today printing below the important level at 80.15 (major 1/2R and poc). Dollar Bulls would want to see price printing back above this level asap.
EURUSD: Last week printed its highest level since February.
