Pre-open comment Friday 13th May
The activity of Significant Buyers and Sellers over the last few days has been unusually volatile but this tug-of-war has taken place entirely above 1327 so ES has stayed in a strong price location. I recently described the price area between 1327 and 1349.50 as “no mans land” and imo only Effective Buying above that price band or Effective Selling below will indicate a directional bias for this market right now. However, because I marked Aggressive Buying on Thursday my #1 Rule now eliminates Short Trades for me until Buyers are marked again.
First Level Resistance = 1354 (20day poc)
Major Support = 1327 (6month poc)
LT Sentiment: AAII (public) poll: Bulls at 30.8%. There has only been one lower Bulls% in the last eight months and that was at the market low in March. Likewise the net at -4.7 is the lowest in the last eight months apart from the net figure at the March low.
ST Sentiment: My version of the Rydex Assets Ratio fell slightly to 3.90 (from 4.40) and that is still a very high number. Earlier in the month the ratio reached 4.57 which is the highest I have in my database. The ISEE (equity-only) index came in at 141 which is the lowest single number since the market low in March.
Supporting Charts (+ or – or ? for equities).
– EURUSD: Has broken below the lower channel support (off January low). Next support is the 12month poc at 1.3923. New 25day low on Thursday and daily momentum (PriceOsc) is down.
? Dollar Index: Daily momentum is up but found Resistance at the old low from November.
? TLT: Last week chart printed its highest level since early December but daily momentum is down
imo these charts are mixed and do not have an obvious bias for equities.
