pre-open comment Friday 20th April
ES tested the First Level Resistance 1386 early in the session and this was rejected. Subsequently ES fell sharply to test the major Support at the 1366 4mnth poc and found Support. As I mentioned in last Friday’s webcast, and repeated in Tuesday comments (highlighted) “if price is between 1366 and 1386 then making a call re ST direction will be difficult”. I also said that if price is printing between those levels there is likely to be volatility. Buying marked above 1386 or Selling marked below 1366 will likely determine the next directional move.
First Level Resistance = 1386 (1/2R off March high)
First Level Support = 1375 (15dy poc)
Second Level Support = 1366 (4month poc)
Sentiment: My version of the Rydex Assets Ratio was down at 3.71 (from 4.37). that’s a 25dy low. We can no longer regard the reading as contrarian bearish. Also, on Wednesday, the Rydex Money market assets that I follow were up 35% from the March low to a three month high.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
+ EURUSD: Chart appears to have Support at the four month poc Support at 1.3069.
? Dollar Index: Chart tested above/rejected 80.15 (the most important level) and currently UDX prints below that level.
– TLT: For the last four days chart has held above 116.22, the major poc, having rallied last week.
imo these charts are mixed and do not have an obvious bias for equities. This could change soon.
