posted 09.10 a.m. est
Pre-open comment Friday 16th May
ES declined further on Thursday following the Significant Selling (red) marked the previous two days. Thursday’s Value Area was wider and generated entirely below 1872 which is now First Level Resistance. This puts ES in a weak price location. There is Support at 1835.00.
First Level Resistance = 1872.00 (4mn poc)
First Level Support = ES 1835.50 (maj poc)
Breadth deteriorated again, see below, and is not supportive. Supporting charts have a negative bias for equities, see below.
Index ETFs: Pre-open, SPY is printing below 187.73 (major poc), IWM is printing below 111.48 (12mn poc), QQQ is printing above 86.32, (8mn poc) and DIA is printing above 163.40 (2yr poc). Momentum (PriceOsc) is down for all four.
Stocks>50dyma numbers: Nyse 44% (from 51%), Nasdaq 22% (from 24%), R2000 25% (from 28%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 6.76 (from 7.36) but historically this is still a high reading. VIX closed at 12.13 on Tuesday which was the lowest close since August last year.
Supporting Charts (+ or – shown as implied bias for equities)
– KEY Chart Financial Sector XLF: is printing below its maj 1/2R level (22.04).
– KEY Chart EURJPY: chart is printing below 140.96, the 1/2R off Dec high.
– KEY Chart Bonds TLT: on Thursday printed its highest level since June last year.
Dollar Index: rallied strongly back above the maj poc at 79.76, having tested last year’s low (78.92). Printed a 27dy high on Thursday.
Gold GLD: still printing below 127.20, its 18mn poc in a LT weak price location.
Oil USO: Rallied off the 36.11 Support (1/2R off 2013 high) but has stalled just below 37.31, the 1/2R off 2011 high.
EURUSD: Last week the chart printed its highest level since November 2011. This test above the March high was rejected though and chart has fallen to the 1.3673 Support (12mn poc) where it has stalled.
