posted 09.17 a.m. est
pre-open comment Tuesday 8th October
Monday’s session generated a lower Value Area, closing near the low of the day. Friday’s low was broken and this negates any ST positive implications of Friday’s Aggressive Buying imbalance (see Monday’s comments, highlighted). 1685.50 is the poc of the distribution that began in early July – more time printed around 1677 may cause that poc to migrate lower which would be a further negative but currently the VAL of this distribution is at 1656.00 (dashed) which is close to 1st Level Support.
Stocks>50dyma numbers: Nyse 54%, Nasdaq 56%, R2000 51%. 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 was almost unchanged at 4.26. Last week’s 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: Printing close to 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. Momentum (although negative) has turned up.
Gold GLD: Printed a 39dy low last week and remains below 134.17, the 12mn poc, in a weak price location.
Dollar Index: Is 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. Momentum (although negative) has turned up.
EURUSD: Last week printed its highest level since February.
