pre-open comment Friday 18th May
On Thursday I marked Aggressive Selling (red-at-bottom) for the third consecutive day. Red-at-bottom lows usually get tested quickly, as Tuesday’s and Wednesday’s were, but three days in a row will often mark at least a temporary exhaustion so maybe the test won’t happen today . However it would be rare to see a market low of any significance put in on a day where red-at-bottom is marked so until we see Buyers marked again I will assume that low will be tested. The 1313poc comes into play here and ES printing time below this level is very weak price location. Bulls would want to see time printed back above that level as soon as possible. Even if that happens there are still lots of negatives. I remain cautious on every timeframe.
Potential Support / Resistance = 1313 (poc)
Sentiment: I’ve been saying that my version of the Rydex Assets Ratio has shown no indication of panic. Yesterday we saw some nerves but I wouldn’t call it panic. Bull fund assets that I follow fell by more than 15% and the ratio fell to 3.81. The recent low was 3.44 on 27th April. The AAII (public) poll reported Bulls at 23.6% (down from 25.4) which is the lowest Bulls% since w/e 27th Aug 2010. Bears came in at 46% (up from 42.1) and this is the highest Bears% since w/e 30th Sept 2011. Following both these dates the market rallied. The nett at -22.4 is the lowest since w/e 23rd Sept 2011.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
– EURUSD: earlier today printed its lowest level since mid January.
– Dollar Index: on Thursday printed its highest level since January.
– TLT: on Thursday chart printed its highest level since October.
imo these charts have a negative bias for equities.
