Late Buyers were punished

Late Buyers were punished

Aggressive Buying (green-at-top) was marked on Monday. Wednesday’s day-session close was below Monday’s low (dashed line) which was a first sign of weakness, see Tuesday’s highlighted comments. When Aggressive Buyers aren’t rewarded quickly it is often a warning that they will be punsihed. That happened here as ES fell sharply on Thursday, see fast deterioration in the breadth numbers, below. Now we have seen Aggressive Selling and these red-at-bottom lows are usually retested quickly. “If” that doesn’t happen we have a situation where Aggressive Buyers and Sellers are both proving Ineffective. That usually means that a controlling price of some degree will emerge between the most recent green and red. That’s probably the best that Bulls can hope for over the next few days. In any event, First Level Support is at 2926.0, the 2yr poc. The most important Support is at 2719, the maj poc. ES needs to hold this level to maintain a strong position in the longer timeframe. ES has rallied back a little and there is minor Support (1mn) at 3044.0.

Sentiment: My version of the Rydex Assets Ratio was lower at 10.69. Tuesday’s ratio at 12.88 was a three month high. The ratio fell to 3.35 on 03/17, the lowest since early 2016. The ratio reached 28.62 on 12/27, the highest reading in my database.

Stocks>50dyma numbers: Nyse 78% (from 94%), Nasdaq 71% (from 92%), R2000 70% (from 91%). Numbers >50 are supportive