posted 9.25 a.m. est
Pre-open Friday 19th March
Thursday’s session generated a narrower “inside” Value Area. Two days of consolidation centred around ES1161.50 has seen that level attract more time than any other over the last three weeks. It therefore becomes an important reference price (poc) and means the highlighted comments below from yesterday (see graphic) are very valid today.
LT sentiment: The AAI (public) poll showed %Bulls down from 45.29 to 35.4 and %Bears up from 25.29 to 29.9 and this is in a week when the SP500 index breaks out ??? I didn’t expect that. An up week on reduced public enthusiasm is not bearish and doesn’t concur with the latest Rydex data (see below).
ST sentiment: Rydex Bull Fund assets I follow were up 13% lifting my version of the Rydex Assets ratio from 2.47 to 2.90. Finally the Rydex timers appear to be “getting with” the rally – that could be ominous. Also note the VIX, once again, closed at its lowest level since May 08.
Supporting charts – levels discussed in webcast:
Dollar Index prints back above the 80.15 maj1/2 showing strength
EURUSD prints below 1.373 – maj1/2
USDJPY prints above 89.76 – maj1/2
GLD prints above 109.42 – poc
These charts are sending mixed signals for equities.
